The bipartisan Infrastructure Investment and Jobs Act was passed by the US Senate, calling for $550 billion in new spending over the next five years. For utility companies, some of the highlights are $73 billion for Grid Modernization and $7.5 billion for EV Charging Infrastructure. Another interesting inclusion is the $65 billion for high-speed internet infrastructure – required for connected homes etc. – and digital equity. The graph below provides an overview of how the bill matches up with the ambitions set by President Biden in the American Jobs Plan.

The following sections in the Bill pertain specifically to Distributed Energy Resources:

• Sec. 40101 - Grid Infrastructure Resilience and Reliability: A grant program is to be established so that an entities - such as States, grid operators, generators and distribution providers - can receive economical support to lower the impact of events in which operations of the electric grid are disrupted, preventively shut off, or cannot operate safely due to extreme weather, wildfire, or a natural disaster. These grants are supplemental to existing hardening efforts planned for any given year and target (1) weatherization technologies and equipment and (2) the use or construction of distributed energy resources for enhancing system adaptive capacity during disruptive events including microgrids, among others. The authorized amount for the program includes $5,000,000,000 for the period of fiscal years 2022 through 2026 with half going for states and tribes and the other half to other entities such as utilities.
• Sec. 40107 - Deployment of Technologies to Enhance Grid Flexibility: Amendments to the Security Act of 2007 further including the use of data analytics and software-as-service to provide flexibility by improving the visibility of the electrical system to grid operators that can help quickly rebalance the electrical system with autonomous controls. The ability to facilitate the aggregation or integration of distributed energy resources to serve as assets for the grid and the ability to provide energy storage to meet fluctuating electricity demand, provide voltage support. The authorized amount for the program includes $3,000,000,000 for the fiscal year 2022, to remain available through 2026.
• Sec. 40412 - Data Collection in the Electricity Sector: Not later than 90 days after the date of enactment of this Act, the Administrator shall establish an online database to track the operation of the bulk power system in the contiguous 48 States. This section seeks to improve the temporal and spatial resolution of data regarding classical generators and utility-scale storage but also including load response and aggregations of distributed energy resources at the distribution system level giving these resources further relevance and status.
• Sec. 40556 Model Guidance for Combined Heat and Power Systems and Waste Heat To Power Systems: CHPs, which can be part of microgrids and efficient sources of energy are mentioned specifically in this section. The Energy Department and the Federal Energy Regulatory Commission are set to review within 180 days barriers to interconnecting CHPs facilities of up to 150 MW to the grid.

In addition to the mentioned sections, several others modify, clarify or expand on past regulations such as the Public Utility Regulatory Policies Act, Fire Management Assistance Grants, Disaster Relief and Emergency Assistance Act and Security Act, among others, giving DERs a renewed focus as potential vehicles of enhanced grid resiliency and cost-effective grid upgrade deferrals.

A significant number of sections are targeted at weatherization and energy efficiency (EE) - which is mentioned 57 times trough out the bill - as well. Below you can find a summary of these:

• Sec. 40502 - Energy Efficiency and Building Infrastructure: Capitalization grants and loans focused on the residential and commercial sector to increase energy efficiency for commercial and residential facilities and to improve compliance with energy-efficient building codes. Residential and commercial energy audits, an overall analysis of energy consumption in the building or facility and identification of lifecycle cost-effective opportunities to reduce energy consumption are included targeting equipment such as lighting, HVAC systems, windows and general insulation. These efforts are aimed to identify potential solutions and recommend controls and management systems to reduce or redistribute peak energy consumption. Authorized amount for the program includes $250,000,000 for the fiscal year 2022, to remain available until expended.
• Sec. 40521 - Future of industry program and industrial research assessment: Amendments to Energy Independence and Security Act of 2007 targeting industrial research and assessment centers with the provision of grants to provide in-depth analysis of manufacturing plants to identify opportunities for optimization including the implementation of energy management systems (EMS), waste management, IoT technology for monitoring, logistics and others. The overall program includes $550,000,000 for the fiscal year 2022 through 2026.
• Sec. 40541 - Grants for energy efficiency improvements and renewable energy improvements at public school facilities: Grants for improvements, repairs, or renovations that result in a direct reduction of school energy costs. Targeted equipment includes HVAC systems, hot water systems, compressed air, lighting and building controls, among others. The overall program includes $500,000,000 for the fiscal year 2022 through 2026.
• Sec. 40551 - Weatherization assistance program: Authorized amount of $3,500,000,000 for the fiscal year 2022, to remain available until expended, regarding the weatherization assistance program established under the Energy Conservation and Production Act for projects assisted in whole or in part.
• Sec. 40552 - Energy Efficiency and conservation block grant program: Rebates, grants or other incentives for the purchase and installation of energy efficiency measures, renewable energy and zero-emissions transportation with overall spending of $550,000,000 for the fiscal year 2022 to remain available until expended.

These sections focused on EE complement and completely dwarf the announcement from the DOE from a couple of weeks ago on extra spending for building energy efficiency. These multi-dimension efforts are aligned with projections done by Guidehouse on the North American Energy Efficiency Market which at the beginning of 2019 estimated total spending of 11.3B in 2028 with CAGR of 4.6% over that period. If we are really aiming to reach net-zero in 2050, the current pace only has room to accelerate until the mid of the century leaving projections aside and working on large-scale, nation-wide programs.

Nonetheless, the current bill as a whole includes a cut of 27% when compared with the American Jobs Plan regarding grid infrastructure spending. Even though this is significant, other sectors such as transportation electrification have suffered at a greater scale with cuts of over 50% for EV charging infrastructure as an example. More action is expected as the Democrats are planning additional funding through the Budget Reconciliation Bill that has a framework agreement of $3.5 trillion which should be fully offset by new tax revenues (prohibiting new taxes on families making <$400.000), health care savings, and long-term economic growth. The framework includes the following instructions for the different Senate committees involved:

• $198 billion for the Committee on Energy and Natural Resources for activities including “Clean Electricity Payment Program, Consumer rebates to weatherize and electrify homes and Federal procurement of energy-efficient materials.”
• $67 billion for the Committee on Environment and Public Works which includes “Clean Energy Technology Accelerator that would fund low-income solar, Federal investments in energy-efficient buildings.”
• $37 billion for the Committee on Homeland Security and Governmental Affairs for “Electrifying and rehabilitating federal buildings and resilience.”

Most of these topics have been addressed in the past on the Darcy DERs research vertical including the Energy Efficiency Forum where we highlighted BlocPower, the DERMS Forum where we highlighted mPrest, the Aggregators Forum where we highlighted Swell and our last forum on Virtual Power Plants where we highlighted Next Kraftwerke.

In a couple of upcoming forums, we will be covering another topic mentioned several times in the Bill which has gained relevant focus and triggered heated debate: Microgrids. In our first microgrid forum on September 9th we will be covering the first segments of the value chain regarding opportunity identification and system design with Xendee as our presenting innovator. I hope to see you at the Forum, and I would love to hear your thoughts on the DERs policy/funding landscape or any other questions about the Infrastructure Bill in the comments below!

If you are interested in further coverage of the Bill please follow these links:

• Transportation Electrification
• Carbon Capture, Utilization, and Storage (CCUS)
• Renewable Energies & Energy Storage