DOE Releases FAQs on Smart Grid Stimulus Projects
Energy Secretary Steven Chu announced June 25 that the agency is ready to accept applications for about $4 billion in grants to support Smart Grid projects. The DOE subsequently released a comprehensive set of FAQs that provide additional insight into the differences between the initial funding announcements and the final FOAs, plus responses to questions and concerns the agency received during the public comment period.
The biggest chunk of money designated for Smart Grid projects - approximately $3.4 billion - will provide grants of up to one-half of qualifying Smart Grid investments to support the manufacturing, purchasing and installation of Smart Grid devices and related technologies, tools, and techniques for immediate commercial use in electric system and customer-side applications including electric transmission systems, electric distribution systems, building systems, advanced metering, appliances, and equipment. The ultimate aim, DOE indicates, is to enable Smart Grid functions on the electric system as soon as possible.
Alternately, the $615 million designated for Smart Grid Demonstrations will support projects that demonstrate how a suite of existing and emerging Smart Grid technologies can be innovatively applied and integrated to prove technical, operational and business-model feasibility. The objective here, says the DOE, is to demonstrate new and more cost-effective Smart Grid technologies, tools, techniques, and system configurations that significantly improve upon the ones that are either in common practice today or are likely to be proposed in the SGIG Program.
Below are highlights and key details from the two FOAs:
Smart Grid Investment Grants (SGIGs)
The federal funds for this program have been divided into two categories:
Â· Smaller projects in which the federal share would be in the range of $300,000 to $20,000,000.
Â· Larger projects in which the federal cost share would be in the range of $20,000,000 to $200,000,000.
Approximately 40% of SGIG funding will be allocated for smaller projects, while approximately 60% will be allocated for larger projects, although DOE says it may revise the allocations depending on the quantity and quality of the applications received.
APPLICATION DUE DATES - Applications will be evaluated in three phases: Phase 1 applications are due Aug. 6, 2009; Phase 2 applications are due Nov. 4, 2009, and Phase 3 applications are due March 03, 2010, not later than 8 p.m. Eastern Time. However, DOE notes it cannot predict whether funds will remain available beyond awards provided after the first due date. In other words, you stand a better chance if you apply by Aug. 6.
Â· Go to http://www.management.energy.gov/business_doe/business_forms.htmto download all the forms necessary to complete an application.
LETTERS OF INTENT - Applicants are requested to submit a letter of intent for each phase they intend to submit an application: Phase 1 by July 16 2009; Phase 2 by Oct. 23, 2009; and Phase 3 by March 03, 2010.
NOTIFICATION -- DOE anticipates notifying applicants selected for award within 90 days after the applicable application due date.
TOPIC AREAS - The Smart Grid projects are expected to fit into one of six topic areas identified by DOE. These are:
Â· Equipment manufacturing
Â· Customer systems
Â· Advanced metering infrastructure
Â· Electric distribution systems
Â· Electric transmission systems
Â· Integrated and/or crosscutting systems
ELIGIBILITY - Eligible applicants include individual entities (lead organizations or "primes”) or teams of entities (lead and supporting organizations or "lower tier” applicants). Organizations eligible for both lead and/or supporting roles include, but are not limited to:
- Electric power companies
- investor-owned utilities
- municipal utilities and public utility districts
- electric cooperatives
- other types of load serving entities
- regional organizations such as independent system operators, transmission organizations, and coordinating councils
- national-level utility organizations
- State, county, local, or municipal government agencies
- Universities and colleges
- Electricity consumers singly or aggregated together, including residential, commercial, industrial, and agricultural customer classes
- Appliance manufacturers, electrical equipment manufacturers, software providers, and communications and information services providers
- Other private companies including but not limited to retail electricity suppliers, energy services companies, independent power producers, demand response services providers, metering services providers, project developers, electricity marketers, and consultants
COST-SHARING - The FOA states that the cost share or match must be at least 50% of the total allowable costs of the project.
TIME FRAME - The stated period of performance is three years, but the DOE indicates it prefers a shorter period.
AWARD CRITERIA - DOE indicates it will use the following technical merit review criteria to evaluate applications and determine SGIG project awards. The relative importance of the four criteria is provided in percentages in parentheses.
1. Adequacy of the Technical Approach for Enabling Smart Grid Functions (40%)
2. Adequacy of the Plan for Project Tasks, Schedule, Management, Qualifications, and Risks (25%)
3. Adequacy of the Technical Approach for Addressing Interoperability and Cyber Security (20%)
4. Adequacy of the Plan for Data Collection and Analysis of Project Costs and Benefits (15%)
INTEROPERABILITY AND CYBER SECURITY - The DOE calls out these two key issues relating to the future of the Smart Grid and requires applicants to address each of them in their submitted materials. The FOA states:
Â· Submitted project plans are required to include a section on the technical approach to addressing interoperability with respect to the integration of Smart Grid devices covering the application of procedures and practices involving interface identification, specification, testing, and lifecycle management.
Â· Submitted project plans are also required to include a section on the technical approach to cyber security. Cyber security should be addressed in every phase of the engineering lifecycle of the project, including design and procurement, installation and commissioning, and the ability to provide ongoing maintenance and support.
Smart Grid Demonstrations
There are two program areas of interest covered by this funding opportunity:
Â· SMART GRID - Regionally unique demonstration projects to quantify Smart Grid costs, benefits and cost-effectiveness, verify Smart Grid technology viability, and validate new Smart Grid business models, at a scale that can be readily adapted and replicated around the country. Smart grid technologies of interest include advanced digital technologies for use in planning and operations of the electric power system and the electricity markets such as microprocessor-based measurement and control, communications, computing, and information.
Utility involvement. Each regional demonstration project should be carried out in cooperation and collaboration with the electric utility that owns the grid facilities in electricity control areas, or the electric utility that is a rural cooperative or publicly owned. The electric utility may be either the proposing applicant or a team member. DOE strongly encourages an integrated team approach that includes members of utilities, product and service suppliers, end users, state and municipal governments, ISOs or RTOs, the financial community, and others.
Â· ENERGY STORAGE - Demonstration projects for major, utility-scale, energy storage installations. The projects will help to establish costs and benefits, verify technical performance, and validate system reliability and durability, at scales that can be readily adapted and replicated across the U.S. Energy storage systems include the following technologies:
o Advanced battery systems (including flow batteries)
o Compressed air energy systems
Application areas include wind and photovoltaic (PV) integration with the grid, upgrade deferral of transmission and distribution assets, congestion relief, and system regulation.
Applications are also sought to demonstrate promising utility-scale storage technologies in order to rapidly advance their market readiness in the U.S.
Utility involvement. Demonstration projects should be carried out in cooperation and collaboration with the electric utility or ISO/RTO that controls the grid facilities in which the energy storage system is being installed. Electric utilities may propose as applicants or team members. An integrated team approach that includes, as appropriate, system operators, utilities, prospective merchant plants, product and service manufacturers and suppliers, end users, state and municipal governments, the financial community, etc. is also strongly encouraged in this topic area.
INTEROPERABILITY -- All applications should include a section on the technical approach to addressing interoperability with respect to the integration of smart grid devices covering the application of procedures and practices involving interface identification, specification, testing, and lifecycle management.
CYBER SECURITYâ€" Applicants must provide clear documentation that demonstrates that their proposed approach to cyber security will prevent broad based systemic failures in the electric grid in the event of a cyber security breach.
TYPE OF AWARD - Cooperative agreements
ESTIMATED FUNDING - $615 million
NUMBER OF AWARDS -
Â· Smart Grid demonstrations: 8-12 total
Â· Energy storage: 12-19 total
o Battery Storage for Utility Load Shifting or for Wind Farm Diurnal Operations and Ramping Control: 1-2
o Frequency Regulation Ancillary Services: 1-2
o Distributed Energy Storage for Grid Support: 4-5
o Compressed Air Energy Storage (CAES): 1-4
o Demonstration of Promising Energy Storage Technologies: 5-6
AWARD SIZES -
Â· Smart Grid demonstrations: Up to $100 million
Â· Energy storage:
o Battery Storage for Utility Load Shifting or for Wind Farm Diurnal Operations and Ramping Control: $40M to $50M total
o Frequency Regulation Ancillary Services: $40M to $50M total
o Distributed Energy Storage for Grid Support: $25M total
o Compressed Air Energy Storage (CAES): $50M to $60M total
o Demonstration of Promising Energy Storage Technologies: $25M total
TIME FRAME - DOE anticipates making awards with project periods of three to five years.
TYPE OF APPLICATION - DOE will accept only new applications under this FOA.
ELIGIBILITY - All types of domestic entities are eligible to apply as a prime applicant; see FOA for specifics.
COST SHARING -- The cost share must be at least 50% of the total allowable costs for demonstration and commercial application projects.
Note: At the time of application submission, the applicant must have a plan to obtain the funding for the entire non-DOE share of the total project cost.
APPLICATION DUE DATE -- Aug. 26, 2009, 3 p.m. Eastern Time
APPLICATION PROCESS - No letter of intent or pre-application is required; acquire application materials at grants.gov.
NOTIFICATION - DOE anticipates notifying applicants selected for award by early November 2009 and making awards beginning in December 2009/January 2010.