A massive climate bill introduced in the US House of Representatives this week includes billions of dollars in micro-grid funding.

micro-grid financing

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The CLEAN Future Act authorizes $ 565 billion in spending to reduce greenhouse gas emissions to net zero by 2050, with an interim target of reducing carbon pollution by 50% from 2005 levels by the end of this decade.

The law project, HR 1512, introduced on March 2, requires utilities to sell increasing amounts of carbon-free electricity until the electricity sector is fossil-fuel-free by 2035. This is in line with the target set by President Joe Biden.

The legislation is based on a House Democrats’ bill released in January 2020.

The 981-page bill creates a zero-emission credit trading program, aims to boost transmission development, supports electric vehicles, and promotes energy efficiency measures. It also contains specific provisions focusing on micro-grids.

Microgrid $ 1.5 billion grant program

For example, the bill requires the Department of Energy (DOE) to set up a program to fund technical assistance, community outreach and project development for energy micro-grid projects. that increase resilience to the risks of climate change.

The bill authorizes $ 1.5 billion per year for grants for 10-year clean energy micro-grid projects as well as $ 50 million per year for technical assistance and outreach. If the bill becomes law, Congress will need to approve authorized spending through the appropriation process.

The energy sources eligible for clean energy micro-grids are solar, wind, geothermal, existing hydro, micro-hydro, hydrokinetic, and hydrogen fuel cells.

The bill prioritizes granting aid grants to environmental justice communities and at least 10% of the funding will go to municipal and other community-owned utilities.

Hybrid microgrids

Another provision requires the DOE to establish a program to help develop hybrid microgrids for isolated communities and to improve the resilience of critical infrastructure.

Hybrid microgrids, which would be eligible for federal cost sharing, must include at least one type of clean energy source.

The bill directs the DOE to develop a strategy to use hybrid microgrids to replace conventional generation.

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Opportunities for indirect financing of micro-grids

The climate bill contains various measures that could indirectly benefit microgrids.

A section of the bill directs the DOE to establish a $ 250 million loan program for distributed energy systems, including microgrids. States, tribes and utilities can receive the loans.

The bill authorizes $ 100 billion in funding for a clean energy and sustainability ‘accelerator’, which would partner with private investors to finance, among other things, low-emission, zero-emission energy technologies, modernization of the network and climate-resilient infrastructure.

The accelerator, essentially a green bank, could help states and local governments set up their own lending programs with private investors to finance green energy projects.

The bill also requires state regulators to consider “wireless solutions,” such as microgrids and energy storage, as alternatives to traditional investments in power line installations.

Major lawmakers plan hearings on climate bill

The climate bill was introduced by Representative Frank Pallone Jr., D-NJ, Chairman of the Energy and Trade Committee. He was joined in sponsoring the bill by Environment and Climate Change Subcommittee Chairman Paul Tonko, D-NY, and Energy Subcommittee Chairman Bobby Rush, D- HE.

Lawmakers plan to hold hearings on the bill and hope to gain Republicans’ support for the legislation.

Majority Leader Sen. Chuck Schumer, D-NY, has made climate change legislation a top priority, but no similar bill has been introduced in the Senate this year.

In December 2020, energy legislation was included in a pandemic relief bill that became law. The bill included provisions benefiting micro-grid developers.

A bill that would provide $ 1.5 billion in funding for microgrids is on hold in the House.

Learn more about Microgrid Funding at Microgrid 2021: The World is Awakening to Microgrids, which will feature a special two-day session on the economics of microgrids, May 18 and 20. The conference is free for those who register in advance. Space on the platform is limited and Microgrid Knowledge virtual conferences attract thousands of participants. We encourage you to register today.

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