The Infrastructure Investment And Jobs Act And The Future Of The Electrical Grid

In the past 11 months, President Biden and his administration have set out to make the U.S. a global leader in renewable energy and clean technology. Biden has designated this clean energy future as an "economic imperative and a national security imperative."

This comes with lofty goals.

A 50% reduction in greenhouse gas emissions by 2030 and a 100% carbon-free national power grid by 2050 are both part of his intention to make the U.S. a leader on the global stage.

Reaching these goals will take a lot of innovation and investment in a short amount of time. It's estimated that between 700 and 800GW of new renewable energy generation would be required to decarbonize the U.S electric grid in the next 15 years. Such an increase in renewable generation will require more transmission lines, storage and other costly upgrades. Price estimates on this acceleration of renewables vary but some experts put the cost at $4.5 trillion dollars.

While there's still a long way to go and lots of investments to be made, Biden took a stride towards realizing this clean energy future by signing the recently passed Infrastructure Investment and Jobs Act.

What's in the bill?

The $1.2 trillion Bill passed by the U.S. House of Representatives and signed by President Biden contains more than $80 billion to advance the clean energy transition and fight climate change. Funding is earmarked for innovations ranging from electric vehicles (EVs) to grid technology and grid reliability purposes. This includes $5 billion in grants for states to deploy public EV chargers, in addition to another $2.5 billion to support stations for EV charging or for fueling vehicles with hydrogen, propane, or natural gas.

The bill also directs $3 billion to the Department of Energy's Smart Grid Investment Grant Program, which was created in 2007 and funded billions of dollars of grid technology investments after the 2008 recession. The intention here is to increase the flexibility of the electrical grid to support the incoming wave of renewable energy. Distributed Energy Resources (DERs) such as rooftop solar panels on homes and EV charging equipment are existing parts of this equation, with the hope that these grants spur more innovation that allows for the grid to become modernized.

Making the grid modern

The U.S. electric grid is a complicated ecosystem.

It's made up of interconnected consumers, electrical suppliers, utilities, and government agencies. A modernized grid involves consumers who capture and store their own energy behind-the-meter through DERs (again, think rooftop solar panels and EV charging). Then, in times of excess, upload energy back to the grid for utilities to store and redistribute.

In the type of grid the U.S. and the Biden administration is envisioning, consumers will serve as manufacturers, to the benefit of the electrical grid's reliability and performance, under the direction of government oversight.

How do we get there, though?

The Smart Grid Investment Grant program fueled innovations like smart appliances, building energy management systems, and demand response and load control equipment. Two-way communications networks allowed for better Automated Metering Infrastructure (AMI), and a total of 99 projects received federal financial assistance. These projects were funded by $3.4 billion worth of Smart Grid Investment Grant money.

With almost the same amount of money set to return to the Smart Grid Investment Grant, it'll be imperative that the next round of innovative projects allow us to compound these investments. Lower cost of DERs, heightened consumer interest in these technologies and a supportive regulatory environment have sent DER deployment skyrocketing, even before the infrastructure bill emerged to boost these programs further. Yet many utilities have been slow to integrate systems that will give them the necessary awareness and analysis of DERs to accommodate for a more digital grid.

The Infrastructure Investment and Jobs Act should serve to accelerate these technologies on a broader scale. More intelligence in the grid equals more control, and more control means more efficiency and reliability. That's where Distributed Energy Management Resource Systems (DERMS) come into play. This management technology allows the grid to balance demand with supply while lowering stress on distribution, transmission and control operators and creating opportunities for new utility business models. In the industry, we often call this approach a "non-wires" alternative, meaning you can get many of the benefits without having to replace existing and aged infrastructure (like transformers etc.) or invest increased CAPEX to build new infrastructure.

DERMSallow utility grid operators to make real-time adjustments to move power across the grid. Many DERMS also deploy AI-based technologies to enable load forecasting and DER plan creation. This allows rooftop solar systems, EV charging, and energy storage to meet in the intersection of supply and demand. It's a logical progression. The 2007 Smart Grid Investment Grant laid the foundation by creating innovative grid resources designed to make the grid more intelligent and automated.

The next round of funding over the next 10 years will transform the grid to provide not only more digitization and intelligence but also address carbon footprint reduction and the democratization of energy service.

In 2007, the investment and innovation brought about a smart grid. Now, we must continue the evolution of our grid and leverage the internet of energy to drive results for this next round of investment.

What will the results be?

A more resilient grid will take full advantage of renewable energy. The outcomes from the steps along the way will be impactful as well.

Cleantech workers, such as solar panel installers and wind turbine technicians, currently account for 19% of all construction occupations and more than 4% of all manufacturing jobs. The purpose of the cleantech earmarks within the Bipartisan Infrastructure Bill is to fuel necessary innovation. This innovation won’t be possible without more jobs. Further growth opportunities are imminent for cleantech companies and American workers in an already bustling industry.

As the U.S. government and the players within the renewable energy and cleantech spaces race towards their lofty goals, the global economy will feel a surge in impacts. America is looking to reap the benefits of a cleaner future, and the Infrastructure Investment and Jobs Act aims to make it happen quickly and intelligently.

(Andy Bennett is the CEO of mPrest. He previously ran global sales for the AI applications business unit at IBM. Bennett also served as the SVP of Energy for Schneider Electric North America​)