green2The American Recovery and Reinvestment Act (ARRA) provides $3.4 billion to the Department of Energy (DOE) for the purpose of funding initiatives focused on research, development and deployment of technologies to use coal more cleanly and efficiently. The DOE is anticipating issuing Funding Opportunity Announcements (FOA’s) in March 2009 for the following initiatives:

  • $800 million for funding the Clean Coal Power Initiative – Round 3 (CCPI-3) for carbon capture and sequestration from coal-fueled power plants. The CCPI-3 is seeking coal-based projects that have progressed beyond the research and development stage to a point of readiness for operation at a scale that, once demonstrated, can be readily replicated and deployed into commercial practice within the electric power industry.

  • $1.52 billion in competitive solicitation for large-scale industrial carbon capture and sequestration (CCS) from industrial sources and for innovative concepts for beneficial CO2 reuse. Unfortunately with regard to this CCS solicitation, utility fossil fuel generation plants are essentially prohibited from participating due to the exclusion of plants with electric power output greater than 50% of total energy output that operate on more than 55% coal as feedstock.

  • $50 million in funding support for a minimum of ten (10) “high potential” geologic formations for CO2 storage.

  • $20 million in grants for University Training and Research to be awarded to approximately 42 applicants for geologic sequestration training and research.

Additionally, the DOE has been provided $1.0 billion for the establishment of other fossil energy research and development programs yet to be defined.

Smart Grid – Electricity Delivery & Energy Reliability

Another $4.5 billion is provided to support the development and implementation of Smart Grid technology. The ARRA makes several substantive changes to the Energy Independence and Security Act (EISA) of 2007 that include:

  • The broadening of support to help fund Smart Grid demonstration projects by removing the language limiting the number of demonstration projects to five (5)
  • Expanding the base of potential applicants from “electric utilities” to “electric utilities and other parties”
  • Data from Smart Grid demonstration projects are to be made available to the public
  • Increase the level of grants from the Smart Grid Investment Matching Grant Program from 20 percent to “up to 50 percent.”
Weatherization and Energy Efficiency Grants

The ARRA makes available to local and state governments a total of $6.3 billion for energy efficiency and conservation upgrades and improvements. Additionally, it makes available another $5 billion for low income household Weatherization programs. Utilities, particularly utilities with existing Demand Side Management (DSM) or Energy Efficiency programs, are uniquely positioned to leverage to support their state/local governments in applying and obtaining these funds. This will not only boost the utilities meeting its DSM goals but will have long-term benefits for the utility in meeting Renewable Portfolio Standards (RPS). Moreover, it could potentially impact a utilities’ ability to operate effectively within a future Carbon Cap and Trade system, if enacted.

Next Steps

The American Recovery and Reinvestment Act of 2009 presents the energy industry with a number of opportunities to invest and improve its infrastructure and in the development and improvement of technologies. With this potentially once in a life-time opportunity, utilities should invest time and resources to understand the impact, benefits and risks involved in leveraging these federal funds.

For more information on any of the areas discussed in this article, contact Greg Lormand at [email protected].

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