What the US Infrastructure Deal Does for Microgrids

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Last week’s passage of a $1 trillion infrastructure bill by the US House of Representatives paves the way for a range of new funding opportunities for microgrids.

microgrids

Photo of the White House by Vacclav/Shutterstock.com

Pushed by President Biden, and already approved by the Senate in August, H.R. 3684 is now cleared to become law after a 228-206 vote Friday night by the House. 

UPDATE! President Joe Biden signed H.R. 3684, the Bipartisan Infrastructure Deal, into law on Nov. 15, 2021

Known as the Bipartisan Infrastructure Deal, the bill names microgrids as eligible for funding within programs to improve transmission, electrify transportation and improve rural and remote areas of the US. 

Microgrids are also singled out for funding in resilience programs to help states and tribes adapt to climate disruption and for connection to transmission, transportation or telecommunications infrastructure corridors in Alaska, Hawaii or a territory of the US.

In all, the bill pegs $50 billion for programs and technologies that improve resilience, $65 billion for grid improvements and $7.5 billion to build a national network of EV chargers. 

Opportunity may also open up for microgrids from $17 billion slated for ports and $25 billion for airports, which is offered, in part, to reduce emissions and drive electrification and low-carbon technologies. 

Details to come

Exactly how much money microgrids will be eligible for — and how to secure it — will become clearer as programs are put in place according to the provisions of the act. 

“Now that the first infrastructure bill has passed, the process of developing proposals for being awarded funds to be overseen by innumerable state and federal governmental agencies will commence,” said Joseph Lynyak, a partner at the international law firm Dorsey & Whitney. “While there will be “shovel-ready” projects, the planning and approval process will stretch over the next decade. This may require project financing by banks and other lenders — with funds ultimately being reimbursed from federal monies awarded as proposals move from the planning to the approval stages.”

For example, the new law calls for creation of a Joint Office of Energy and Transportation, which would consider microgrids and other technologies as it studies, plans and coordinates issues related to the electrification of transportation. The new joint office also will create a program to “promote renewable energy generation, storage and grid integration, including microgrids, in transportation rights-of-way.”

No vote yet on microgrid tax credit

Described in Washington as the “hard” infrastructure bill — the one that deals with bridges, roads and other traditional infrastructure — the Bipartisan Infrastructure Deal represents half of President Biden’s infrastructure agenda. 

The “soft” half — the Build Back Better bill — encompasses social programs, climate efforts and tax credits for clean energy technology, including microgrids. That bill has yet to pass, and its fate remains uncertain.

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The microgrid industry has been carefully following both bills, given the one-two punch they would offer — grants plus tax credits.

“Taken together, the infrastructure funding coupled by the potential new tax credits can result in market transformation for microgrid controllers, electric transmission and energy storage technology. These are complementary policies that will spark investment into new projects nationally over the next decade, adding many new jobs to the economy,” said Michael Bakas, executive vice president at Ameresco, an energy efficiency and renewable energy company that has developed several microgrids.

Microgrids already in play

While the Bipartisan Infrastructure Deal puts microgrids in the money as part of the nation’s $1 trillion rebuild, the technology already is being used to improve electrical infrastructure in communities and at ports, airports and other critical facilities.  

Ameresco, for example, recently cut the ribbon on a microgrid for the McKinleyville Community Service District in California. Ameresco designed and built the integrated microgrid at the community’s Hiller Park wastewater treatment plant. The microgrid incorporates existing generation along with new solar photovoltaics and battery energy storage assets to optimize electrical grid resiliency, delivering both financial and environmental benefits to the community.

“As more communities are facing the extreme effects of climate change, we hope this infrastructure funding will enable us to work with these communities to secure grid resiliency,” Bakas said.

Tom Poteet, vice president of corporate development for Mesa Solutions, which specializes in mobile and stationary generator sets and microgrids, said that the bill indicates microgrids are reaching mainstream thought.

Not much detail is provided on how microgrids can qualify for funds or receive funding, but it is clear that microgrids as a class of solutions have attained a high level of acceptance as a useful option to provide capacity and resilience for critical load,” he said. “Investment to the grid in general can improve system reliability, but true resilience is achieved at the edge; by site, by campus, by neighborhood. Microgrids are the way to get the most resilience at the edge, and it’s great to see the concept reaching mainstream consideration.”

The White House described the Bipartisan Infrastructure Deal as a critical step toward reaching President Biden’s goal of a net-zero emissions economy by 2050. 

Other provisions in the bill
  • $66 billion to modernize and expand transit and rail networks across the country.
  • $5 billion for zero- and low-emission school buses.
  • $55 billion to expand access to clean drinking water.
  • $21 billion to clean up Superfund and brownfield sites, reclaim abandoned mine land and cap orphaned oil and gas wells.

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About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Comments

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