Renewable Energy and Smart Grids Spurred by Economic Stimulus Act

February 18, 2009

The American Recovery and Reinvestment Act of 2009, which President Barack Obama signed on February 17, includes $6 billion to support loan guarantees for renewable energy and electric transmission technologies. The funds are expected to guarantee more than $60 billion in loans. The act requires the DOE Loan Guarantee Program to only make loan guarantees to projects that will start construction by September 30, 2011, and that involve renewable energy, electric transmission, or leading-edge biofuel technologies. See pages 63 and 76-78 of the American Recovery and Reinvestment Act of 2009 (PDF 13.4 MB), as well as pages 26-27 of the accompanying joint explanatory statement of the conference committee (PDF 10.3 MB). Download Adobe Reader.

The act also directs DOE to analyze the nation's electrical grid to determine if significant potential sources of renewable energy are locked out of the electrical market by a lack of adequate transmission capacity. DOE must then provide recommendations for achieving adequate transmission capacity. To help achieve those recommendations, the act includes a provision allowing the Western Area Power Administration to borrow up to $3.25 billion from the U.S. Treasury for transmission system upgrades, particularly for facilitating the delivery of power from renewable energy facilities, and it also gives equivalent borrowing authority to the Bonneville Power Administration for transmission systems upgrades. See pages 65-71 and 80-81 of the act and page 28 of the joint explanatory statement of the conference committee.

In addition, the act provides $4.5 billion for the DOE Office of Electricity Delivery and Energy Reliability for activities to modernize the nation's electrical grid, integrate demand-response equipment, and analyze, develop, and implement smart grid technologies. The funds will also support research in energy storage technologies, efforts to facilitate recovery from energy supply disruptions, and efforts to enhance the security and reliability of the nation's energy infrastructure. A complementary section of the act opens smart grid demonstration projects to electric systems in all areas of the country and establishes a smart grid information clearinghouse to share data from the demonstration projects. See pages 60-62 and 72-76 of the act, as well as pages 25 and 28 of the joint explanatory statement of the conference committee.

The U.S. Department of Defense (DOD) will also be getting into the act, as it will receive $300 million to research, develop, test, and evaluate energy technologies, including improvements in energy generation and efficiency, transmission, regulation, and storage. The DOD efforts will apply both to military bases and deployed forces, and will include research and development of energy from fuel cells, wind, solar, biomass energy and biofuels, and other renewable energy sources. See pages 48-49 of the act and page 19 of the joint explanatory statement of the conference committee.