The U.S. Department of Energy on Feb. 28 announced a Request for Proposals for up to $200 million for transmission projects to connect remote and isolated microgrids to existing infrastructure corridors in Alaska, Hawaii, and the territories of the United States.
The projects are funded by President Biden’s Bipartisan Infrastructure Law through the Transmission Facilitation Program, a $2.5 billion revolving fund that helps overcome financial hurdles facing new and upgraded transmission lines.
One of three unique funding mechanisms within the TFP, the public private partnerships developed through this RFP “will be designed to address the unique electric grid configurations and challenges faced by residents in these remote and often isolated communities,” DOE said.
“Strategic interconnection of existing microgrids to each other and to a larger operating transmission system will enhance grid reliability and resilience and expand access to clean, diverse, and more affordable energy to lower electricity costs in these communities,” it said.
Electric consumers in Alaska, Hawaii, and the U.S. territories “have unique electric grid configurations, and many communities meet their electricity needs through isolated microgrids. An isolated microgrid is a group of interconnected loads, transformers, distribution lines, protective devices, and distributed energy resources that acts as a single controllable power system and does not have a sustained or reliable connection to a larger-scale utility electric grid,” DOE said.
Leveraging public private partnerships created through the TFP, projects developed under this RFP will help build transmission infrastructure to connect microgrids to local transmission systems or interconnect microgrids to each other in order improve electric reliability.
Alaska, Hawaii, and the U.S. territories “experience diverse challenges related to the electric grid and connecting isolated microgrids to infrastructure corridors can support community needs in many ways, including enhancing grid resilience and enabling access to clean, diverse, and lower cost energy.”
The TFP is covered under President Biden’s Justice40 Initiative, "which aims to deliver 40 percent of the overall benefits of certain Federal climate, clean energy, affordable and sustainable housing, and other investments to disadvantaged communities that are marginalized by underinvestment and overburdened by pollution," DOE said.
Through this program, DOE would be an equity partner in eligible projects alongside the project’s existing owners, providing both technical assistance and capital. DOE may assist projects at an early stage of project development in, for example, facilitating negotiations with relevant authorities or providing TFP funding for surveys or studies necessary for project development. For projects closer to the start of construction, DOE may, for example, assist in reviewing the terms of materials contracts necessary to achieve financial close, in addition to funding a repayable portion of the construction costs.
Funds under this program can only be used for transmission facilities that connect an isolated microgrid to an existing infrastructure corridor. Funds cannot be used to construct electric generation nor be used for distribution system facilities.
The TFP is not a grant program and proposed projects must demonstrate the ability for DOE to recover any program investment. DOE will work with applicants to develop a successful repayment method, which could include, for example, project revenues, debt financing, or replacement equity.
The deadline for applications is May 31, 2024. DOE expects to notify selected applicants in October 2024.
The Grid and Transmission Program Conductor provides more information on programs administered by DOE, as well as questions concerning the ability to pair different funding opportunities offered across DOE.
