Automation Insight.
June 2009
Summary of Smart Grid Grants
Editor’s Note: Amid much anticipation, the final versions of Funding Opportunity Announcement (FOA) 36 and 58 were released on June 25. This article provides a summary of the key differences between the final FOAs, as compared to the previously released version.
Applicants should also note that the deadlines for submission have also been extended slightly.
I. Summary of Smart Grid Demonstrations Grant (SGDG)Funding: DE-FOA-0000036 – A Short Summary
The final Demonstrations FOA clarifies the issue of multiple applications within or across opportunities, with particular focus on the Smart Grid Investment Grant Program: “Applicants can submit separate applications to both programs, or multiple applications to each program, but they must be for distinctly different projects and they cannot involve the use of federal funds from both programs in a single project.”
The purpose of the final FOA remains the same as for the draft FOA: “The goal of this FOA is to demonstrate technologies in regions across the States, Districts, and Territories of the United States of America that embody essential and salient characteristics of each region and present a suite of use cases for national implementation and replication.”
While the draft FOA provided little guidance on benefits estimation, the final FOA offers detailed instructions on how to estimate project benefits and costs. This is referred to as the “cost-benefit analysis (CBA) methodology,” and is identical to the methodology laid out for SGIG. (The CBA methodology is outlined in Appendix A.)
Significant changes have been made to program areas of interest. The original FOA identified three such areas, regional demonstrations, synchrophasor demonstrations, and utility-scale energy storage demonstrations. The final FOA recognizes only two program areas of interest:
Regional Demonstrations – This program area is similar to what was described in the draft FOA, including identical descriptions of smart grid domains, technology application areas, and smart grid metrics. An exception is that the final FOA does not divide the program area into subareas as the initial draft did (demonstrations with IOUs, demonstrations with publicly-owned utilities).
Grid-Scale Energy Storage Demonstrations – Although this program area refers to “grid-scale” demonstrations as opposed to “utility-scale” demonstrations, there are no substantive differences between the old and new program area descriptions. Subareas are the same in both cases.
The final FOA does not include a synchrophasor demonstrations program area.
There is no change in the estimated funding level ($615 million), and no award size ceilings or floors apply. However, the omission of funding for synchrophasor projects increases the support available to regional demonstration projects. Specifically, the same 8-12 regional projects are now anticipated to receive up to $100 million (compared to $5 million-$40 million in the original FOA). The original cost sharing level of 50 percent is retained in the new FOA.
The definition of eligible applicants provided in the new FOA differs from the original definition in specifying that only “domestic” entities may apply as prime applicants, although the types of eligible entities remain identical.
The application due date is 8/26/09. Awardees will be notified by early November 2009, and awards will be distributed beginning in December 2009/January 2010.
The original merit review criteria outlined in the draft FOA (technical merit, significance/impact, project plan, and project team) are revised as follows:
project approach (35 percent)
significance and impact (25 percent)
interoperability and cybersecurity (20 percent)
project team (20 percent)
Taken as a whole, the most important change embodied in the final opportunity announcement is the removal of synchrophasor demonstrations as a program area of interest. One effect of this removal is to increase the level of funding available for regional demonstration projects. Eligibility criteria are altered to prohibit foreign entities from serving as prime applicants. Merit review criteria are amended and described in greater detail, and a CBA methodology is provided to assist in the application process.
II. Summary of Smart Grid Investment Grant (SGIG)Funding: DE-FOA-0000058 – A Short Summary
The purpose of the opportunity is defined as “to accelerate the modernization of the nation’s electric transmission and distribution systems and promote investments in smart grid technologies, tools, and techniques which increase flexibility, functionality, interoperability, cyber-security, situational awareness, and operational efficiency.” This is an expanded definition compared to what was stated in the original NOI.
The draft metrics outlined in the NOI (coordination regimes, distributed energy, delivery infrastructure, information networks, and PMU deployment) are replaced with a more coherent and systematic set of metrics. These include:
customer-level metrics
distribution-level metrics
transmission-level metrics.
Each of these is specified in greater detail as a collection of distinct quantitative measures. The FOA is explicit in stating that applications should reflect these metrics: “These metrics are to be considered by applicants in responding to this FOA.”
Overall funding is estimated at $3.4 billion (the NOI did not provide a funding estimate). Two award categories are specified, “smaller projects” and “larger projects” (compared to “smart grid technology deployment grants” and “PMU deployment grants” in the NOI). Smaller project award sizes range from $300,000 to $20 million, and larger project award sizes range from $20 million to $200 million. This maintains the $200 million ceiling announced after release of the NOI. Approximately 40 percent of funding will be for smaller projects, and 60 percent for larger projects. The period of performance for projects is identified as three years and must be invoiced and paid by September 30, 2015. The original cost sharing/matching level of a maximum of 50 percent is retained in the new FOA.
An expanded roster of eligible applicants is identified. Both the original NOI and the final FOA recognize electric power companies (including utilities, other LSEs, and regional organizations) as well as manufacturers and retail suppliers as eligible entities. The final FOA adds government agencies, universities and colleges, DR and consultant companies, and consumers (singly or aggregated together) to the list.
The FOA requires that eligible projects support the same eight smart grid functions noted in the NOI (and derived from EISA, Section 1306(d)). Similarly, the same list of eight eligible investments (previously known as “qualifying investments”) contained in the original NOI is contained in the final FOA (derived from EISA Section 1306(b)), as is the same list of eight non-eligible investments (“non-qualifying investments,” derived from EISA Section 1306(c)).
The new FOA clarifies the issue of multiple applications within or across opportunities, with particular focus on Smart Grid Demonstrations: “applicants can submit separate applications to both programs, or multiple applications to each program, but they must be for distinctly different projects and they cannot involve the use of federal funds from both programs in a single project.”
Three funding rounds or “phases” are specified. Applicants are asked to submit a letter of intent for each phase for which they intend to submit an application. This is new and not compulsory rather intended to help DOE plan workflow and budgets. The submission and award schedule is as follows:
Phase 1 – letter of intent due 7/16/09, application due 8/06/09, awards anticipated October 2009
Phase 2 – letter of intent due 10/23/09, application due 11/04/09, awards anticipated March 2010
Phase 3 – letter of intent due 2/10/10, application due 3/3/10, awards anticipated June 2010
Awards will be announced within 90 days after the applicable application due date.
The FOA specifies six topic areas into which applications must fall:
Equipment manufacturing
customer systems
AMI
electric distribution systems
electric transmission systems (PMU’s now embedded here)
integrated and/or crosscutting systems.
Each application must be submitted under a single topic area.
While the NOI provided little guidance on benefits estimation, the final FOA offers detailed instructions on how to estimate project benefits and costs. This is referred to as the “cost-benefit analysis (CBA) methodology” and all benefits are summarized in a table no.6 (available via download).
The original merit review criteria outlined in the NOI (technical merit, significance/impact, project plan, and project team) are replaced by the following four criteria, which are described in more detail:
adequacy of the technical approach for enabling smart grid functions (40 percent)
adequacy of the plan for project tasks, schedule, management, qualifications, and risks (25 percent)
adequacy of the technical approach for addressing interoperability and cyber security (20 percent)
adequacy of the plan for data collection and analysis of project costs and benefits (15 percent).
In general, the final FOA represents an elaboration and refinement of the original NOI, with no radical changes. Revisions to project metrics and metric review criteria offer improvements in terms of clarity, coherence, and specificity. New award categories and sizes pertain solely to project size and do not differentiate by technology. New topic areas help bring conceptual order to the funding opportunity. And the inclusion of the CBA methodology should ease the application process. The anticipated job creation metrics are not defined in this new FOA
The new FOA lays out the application process and required forms in detail. The Discussion of Award section implies an automated selection process in which the Selection Official will engage in discussions on an exception basis to clarify:
the budget is not appropriate or reasonable for the requirement;
only a portion of the application is selected for award;
the Government needs additional information to determine that the recipient is capable of complying with the requirements in 10 CFR 600;
data collection for the DOE estimation of project impacts (metrics), costs and benefits, and/or (5) cyber security assurances
special terms and conditions are required.
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