Regulatory incentives in the United States and California specifically designed to promote grid infrastructure technologies primarily focus on enhancing grid reliability, integrating renewable energy sources, and encouraging technological innovation. These incentives are manifested through various regulatory policies, tax incentives, and directives. According to the DOE's Liftoff report, the current grid infrastructure is outdated and facing increasing demand. The report describes the adoption of advanced technologies as a process ‘private sector led, government enabled’. Here’s a detailed look at some of the key regulatory incentives:
United States
- Federal Energy Regulatory Commission (FERC)
- Order No. 841 : It facilitates the integration of electric storage resources into the regional and national electricity markets. This order mandates that electric storage resources, such as battery storage systems, must have the same access to wholesale market services as other energy resources.
- Read more: Order No. 841
- Order No. 893: FERC’s Order No. 893 provides incentive-based rate treatments for utilities making voluntary cybersecurity investments, as part of enhancing the resilience of the energy infrastructure.
- Read more: FERC Again Aims to Enhance Grid Reliability with Order Approving Incentive Rate Treatment for Cybersecurity Investments
- Order No. 1000: FERC’s Order No. 1000 is crucial for grid infrastructure as it reforms the electric transmission planning and cost allocation processes. This order requires that public utility transmission providers improve their transmission planning processes and allocate costs for new transmission facilities to benefit from those facilities.
- Read more: FERC Order No. 1000
- Order No. 2222: The main goal is to better enable distributed energy resources (DERs) to participate in the electricity markets run by regional grid operators.
- Read more: FERC Order No. 2222 Explainer
- Department of Energy (DOE)
- Grid Modernization Initiative: The DOE has funded this initiative to develop innovative tools and technologies to modernize and enhance the reliability and resilience of the nation’s grid infrastructure.
- Read more: DOE Grid Modernization Initiative
- Grid Resilience and Innovation Partnerships (GRIP) Program: DOE has funded this program to bolster the resilience and innovation of the nation's electrical grid infrastructure.
- Read more: DOE Grid Resilience and Innovation Partnerships (GRIP) Program
- Smart Grid Grants: Direct funding opportunities provided by the Department of Energy (DOE) for the development and deployment of smart grid technologies.
- Read more: Smart Grid Grants
- Energy Infrastructure Reinvestment (EIR) program: The EIR program specifically supports projects that either modernize or transform existing energy infrastructure to reduce air pollutants and greenhouse gas emissions, which aligns with grid infrastructure enhancements. This program aims to retool, repower, repurpose, or replace energy infrastructure that has ceased operations or upgrade operating energy infrastructure to mitigate environmental impacts.
- Read more: Title 17 Clean Energy Financing
- Investment Tax Credit (ITC) for Energy Storage
- The Infrastructure Investment and Jobs Act (IIJA)
- Inflation Reduction Act (IRA)
- Primarily targets climate change and energy policy, offering extensive incentives for clean energy, including investments in energy storage, grid enhancements to support renewables, and improvements in energy efficiency and transmission.
- Read more: Infrastructure Investment and Jobs Act – Power and Energy
- Public Utility Regulatory Policies Act (PURPA) of 1978
California
- California Public Utilities Commission (CPUC)
- Rule 21: This regulation pertains to the interconnection of distributed generation and energy storage, offering clear guidelines and incentives for grid-tied systems, thereby encouraging more grid-responsive technologies.
- Read more: Rule 21
- Self-Generation Incentive Program (SGIP) provides financial incentives for the installation of energy storage systems that can provide grid support during peak hours, enhancing grid stability and reducing dependency on traditional power plants.
- Read more: California SGIP
- Demand Response (DR) : Demand response involves adjusting the demand for power rather than adjusting the supply. By encouraging or requiring consumers to reduce their electricity use at peak times, these programs help manage the load on the electrical grid, thus enhancing its stability and efficiency.
- Read more: Demand Response (DR)
- Senate Bill 100 (SB 100)
- Known as "The 100 Percent Clean Energy Act of 2018," SB 100 sets ambitious renewable energy and zero-carbon resources procurement targets for California’s electricity sector by 2045, indirectly incentivizing technologies that can integrate and manage renewable resources effectively within the grid.
- Read more: SB 100 Joint Agency Report
- Net Energy Metering (NEM) Policies
- These policies allow consumers who generate their own electricity from solar power to feed electricity they do not use back into the grid. This is both a regulatory incentive and a technical enabler for smart grid technologies.
- Read more: NEM 3.0 in California: What you need to know
- California Energy Commission (CEC) Programs
- The California Energy Commission’s research, development and demonstration programs provide more than $200 million each year to accelerate new scientific and technology solutions that will result in a cleaner, safer, more affordable, and more resilient energy system for California.
- Read more: Energy Research and Development
These regulatory frameworks and incentives are pivotal in fostering an environment conducive to innovation and development in grid infrastructure technologies. They not only provide financial incentives but also set the regulatory groundwork necessary for integrating advanced technological solutions into the energy grid.