By Maddie Lee
Maddie Lee is a Policy Analyst at Enel North America. She is responsible for facilitating the implementation of federal policies at Enel, such as the Inflation Reduction Act and the Bipartisan Infrastructure Law (Infrastructure Investment and Jobs Act), across a wide range of technologies including renewable energy, green hydrogen, and EV charging infrastructure.
The Bipartisan Infrastructure Law (BIL), also known as the Infrastructure Investment and Jobs Act (IIJA), was signed into law by President Biden on November 15, 2021. The law is historic in magnitude and breadth – it authorizes $1.2 trillion for transportation and infrastructure spending, with $550 billion of that going toward new investments and programs. For organizations considering decarbonization investments, the law unlocks significant rebates. In the overview below, we identify a few programs related to decarbonizing the energy and transport sectors that may interest organizations looking to advance their clean energy strategies.
An Overview of Bipartisan Infrastructure Law Funding
BIL funding is expansive in scope, covering investments in sectors including broadband internet, rail, transit, clean energy, and water infrastructure. All programs under the BIL must also align with the Justice40 Initiative, which seeks to reserve 40% of all funds for disadvantaged communities. These communities have historically been marginalized, underserved, and overburdened with pollution.
Organizations working to decarbonize should turn their attention to the funding related to energy and transportation. The BIL provides approximately $350 billion to the U.S. Department of Transportation (DOT) and $62 billion to the U.S. Department of Energy (DOE), including funds to offset the costs of installing electric charging infrastructure, replacing school bus fleets, building smart grids, and producing clean hydrogen. While there is a distinction between “formula grants” (which are distributed to states and territories based on formulas as specified in federal law) and “competitive grants” (which are administered by the federal government), grants are ultimately disbursed on a competitive basis, just selected by different entities.
To maximize your organization’s chances at receiving funding for your decarbonization projects, you need to first understand the various programs’ goals – by doing this, you can design a solution that both fits your organization’s needs and aligns with your state/territory’s objectives. Below we provide a summary of the key facts you need to know about your potential investments related to EV and fueling infrastructure, clean school buses, smart grids, and clean hydrogen production. Where relevant, we indicate the most immediate actions required to apply to these programs. You can also download our summary document.
Funding for EV and Fueling Infrastructure
27% of U.S. GHG emissions come from transportation, making transport electrification a significant step toward deep decarbonization. High price tags have long hindered the mass adoption of electric or alternative fuel vehicles – however, costs have been steadily declining. In addition, there is a lack of a robust national charging network, leading to range anxiety and concerns about charging availability.
The National Electric Vehicle Infrastructure (NEVI) Formula Program addresses this gap by allocating $5 billion toward building a robust nationwide electric vehicle (EV) charging network, focusing on deployment along highway corridors and interstates. The funding is disbursed in increments of $1 billion per year over five years (FY 2022 – 2026). As this is a formula grant program, the funds will first be disbursed to the states, who will each determine how to strategically deploy EV charging infrastructure across their communities.
Recognizing that EVs may not fit all situations, there’s another $2.5 billion of Charging and Fueling Infrastructure Grants. This competitive grant program will invest in charging and fueling infrastructure (hydrogen, propane, and natural gas) both along corridors and in communities. The funding supports innovative approaches to ensuring clean transportation infrastructure is deployed in rural, disadvantaged, and other hard-to-reach communities.
If you’re a building owner or landowner located by highway corridors and interstates:
- Key takeaway: Know that there is funding for your EV charging or alternative fueling infrastructure project (up to 80%).
- Considerations: Adding fast chargers is complex because infrastructure upgrades may be needed to accommodate the large load increase. As you plan out your public charging solution, you may encounter challenges to grid connection, like interconnection delays or capacity constraints. This will be a good opportunity to evaluate non-wires alternatives like on-site solar and energy storage to see what the most cost-effective solution would be. Beyond their ability to avoid grid infrastructure upgrades, on-site energy solutions can also help you mitigate high demand charges, boost your site sustainability, and earn additional revenues through energy programs.
- Next milestone: At the time of this writing, applications for NEVI are already underway. Know your state or territory’s application guidelines – and get your application in before the deadline.
Funding for Clean School Buses
School buses in the United States shuttle more than 25 million children to and from school daily, translating to over four billion miles traveled each year. While new buses meet the EPA’s stricter emissions standards, many older diesel buses continue to emit pollutants at a higher rate – pollutants linked to health risks in children, like asthma and other respiratory illnesses. As a result, schools are turning to electric school buses to improve air quality, reduce health risks, and lower greenhouse gas emissions.
To accelerate these efforts, the EPA’s Clean School Bus Program allocates $5 billion over five years (FY 2022 – 2026) to replace existing diesel school buses with clean ones. Clean school buses can be either of the following:
- Electric buses, which are zero-emission, or
- Low-emission buses, which are operated in part using alternative fuels, like propane and clean natural gas
Half of the funds are reserved for electric school buses, while the other half remains technology neutral.
If you are a government or nonprofit school transportation association that is responsible for providing school bus services or purchasing school buses:
- Key takeaway: Know that there is funding for your school bus replacement project (up to 100%) – especially if you meet one or more of the following prioritization criteria, for which you may be offered more funding per bus or receive preference in the selection process. Prioritized areas include:
- High-need school districts and low-income areas
- Rural districts
- School districts funded by the Bureau of Indian Affairs, or that receive support payments for children who reside on Indian land
- Considerations: Be strategic about your grant applications. In the first round of rebate applications, the EPA received around 2,000 applications from all over the United States, requesting nearly $4 billion for over 12,000 buses. The 390 selected winners proposed replacing over 2,500 school buses – 95% were electric buses and 99% were in prioritized areas.
- Next milestone: At the time of this writing, the second round of rebate applications is expected in Spring 2023. To maximize your chances of obtaining funding, get in touch with an energy expert like Enel North America to select the best solution and manage your rebate application and grant management process on your behalf.
Funding for Grid Resilience and Innovations
Today’s power grid was neither designed for the variability and intermittency of renewable energy nor to accommodate the type of two-way communications required for customer-sited distributed energy resources (DERs). It is also aging quickly, with some components much older than their 50-year life expectancy. While this presents a challenge requiring expensive upgrades to grid infrastructure (“wires,” in simplified terminology), it is also an opportunity for innovative uses of DERs to defer or replace the need for wires investment.
As part of the BIL, the Grid Deployment Office in the U.S. Department of Energy is administering a $10.5 billion Grid Resilience and Innovation Partnerships (GRIP) Program to enhance grid flexibility and improve the resilience of the power system against growing threats of extreme weather and climate change. Under this funding opportunity, there are three separate programs:
- Utility & Industry Grid Resilience Grants ($2.5 billion)
- Smart Grid Grants ($3 billion)
- Grid Innovation Program ($5 billion)
Enel North America is particularly excited about the class of projects focused on increasing the connectivity and integration of distributed energy resources like EVs and buildings (classified under the Smart Grid Grants). Projects funded under this program will demonstrate a pathway to wider adoption of decentralized, grid-interactive technologies and solutions.
This grant program has broad eligibility. If you’re a commercial or industrial company, higher education institution, government, or nonprofit entity:
- Key takeaway: Know that there is funding for your grid resilience and innovation project (50% to 100% depending on the program). This program offers a great opportunity to make progress on your sustainability goals while bolstering grid resilience for the community you live and work in.
- Next milestone: At the time of this writing, the deadline for the submission of concept papers for the first funding opportunity has already passed. Interested applicants should get an early start and begin discussions with partners ahead of the second round of applications. Partnering with an energy expert like Enel North America will make it easier to evaluate your options and get support for building a stronger grant application.
Funding for Clean Hydrogen Production
Hydrogen is an energy carrier like fossil fuels and electricity, but it can now be produced with lower emissions than traditional fossil fuel-based methods. Hydrogen produced in this low-emissions way is termed “clean hydrogen.”
Clean hydrogen can provide fuel for energy-intensive sectors such as fertilizer, steel, and shipping, where electrification is not a viable decarbonization option. Thus, clean hydrogen production, processing, delivery, storage, and end-use are of utmost importance in industries looking to decarbonize. The BIL contains various grant programs targeting clean hydrogen production, including $7 billion to establish a Regional Clean Hydrogen Hubs (“H2Hubs”) program. The H2Hubs loosely correspond to the regions of: Pacific Northwest, California, Southwest, Central United States, Alaska, Hawaii, Great Lakes, New England, Appalachia, and Gulf Coast. Applications for the selection of the H2Hubs ended on April 7, 2023, with the H2Hubs to be announced in Q3 2023.
If you are an industrial company, utility, or higher education institution interested in using clean hydrogen to decarbonize your operations:
- Key takeaway: Know that there are currently many incentive programs targeting clean hydrogen production and infrastructure development, and these will ultimately drive hydrogen prices down. In addition to the Regional Clean Hydrogen Hubs program above, the BIL also provides innovation incentives, like $1 billion in funding for the Clean Hydrogen Electrolysis Program and $500 million for the Clean Hydrogen Manufacturing and Recycling Initiatives. In combination with the new clean hydrogen Production Tax Credit, introduced under the Inflation Reduction Act of 2022, all these initiatives serve to reduce the costs of producing clean hydrogen. For organizations looking to replace their fuel usage with clean hydrogen, this means a faster path to economic viability.
- Next milestone: While there’s no immediate to-do for a hydrogen consumer, it is never too early to start the conversation with an energy expert like Enel North America. We can help you assess and optimize clean hydrogen utilization into the rest of your energy and sustainability strategy.