On June 25, 2009, the Department of Energy issued Funding Opportunity Announcements for the Smart Grid Investment Grant (SGIG) Program and the Smart Grid Demonstration Program (SGDP).

Almost all types of transmitters, distributors, and users of electricity (including, for example, utilities, independent system operators, municipalities, universities, and hospitals) are eligible to access, through the SGIG, a significant source of funding ($3.4 billion) for a broad range of smart grid projects. Virtually all types of domestic entities are eligible to apply for funding (totaling $615 million) through the SGDP for innovative smart grid projects. Entities receiving funding from the SGDP cannot also obtain funding for the same project from the SGIG.

Smart Grid Investment Grants Program

Approximately $3.4 billion is expected to be available for new awards under this announcement.  Federal financial assistance will be available for up to 50 percent of eligible project costs.  Approximately 40 percent of SGIG funding will be allocated for smaller projects (with a federal cost share from $300,000 to $20 million), while approximately 60 percent will be allocated for larger projects (federal cost share from $20 million to $200 million). Applications for funds will be accepted in three rounds. Letters of intent to submit applications are due on July 16, 2009, October 23, 2009, or February 10, 2010; corresponding applications are due on August 6, 2009, November 4, 2009, and March 3, 2010; and the awards are expected to be granted in October 2009, March 2010, and June 2010, respectively. DOE anticipates granting the awards within 90 days from the application due date.

DOE expects to complete the awarding of all projects funded under this announcement by September 30, 2010. All costs for these awards must be invoiced and paid by September 30, 2015. The maximum project period of performance is three years.  The American Recovery and Reinvestment Act of 2009 (ARRA) gives preference to activities that can be started and completed expeditiously, and accordingly, special consideration will be given to projects that promote and enhance the ARRA objectives, especially job creation and preservation and economic recovery, in an expeditious manner. 

Eligible projects must support or advance one or more smart grid functions, including

  • to develop, store, send, and receive digital information concerning electricity use, costs, prices, time of use, nature of use, storage, or other information relevant to device, grid, or utility operations, to or from a computer or other control device, or by means of the electric utility system, through one or a combination of devices and technologies;

  • to measure or monitor electricity use as a function of time of day, power quality characteristics (such as voltage level, current, cycles per second, or source or type of generation) and to store, synthesize, or report that information by digital means;

  • to sense and localize disruptions or power flow changes on the grid and communicate such information instantaneously and automatically to enable automatic protective responses to sustain reliability and security of grid operations;

  • to detect, prevent, communicate with regard to, respond to, or recover from system security threats, including cybersecurity threats and terrorism, using digital information, media, and devices;

  • to enable any appliance or machine to respond to such signals, measurements, or communications automatically or in a manner programmed by its owner or operator without independent human intervention;

  • to use digital information to operate functionalities on the electric utility grid that were previously electro-mechanical or manual; and

  • to use digital controls to manage and modify electricity demand, enable congestion management, assist in voltage control, provide operating reserves, and provide frequency regulation.

SGIG applicants must designate a topic area1 into which the proposed project best fits and submit a comprehensive project plan, including an abstract, tasks and schedules, a management plan, technical approach to enabling smart grid functions, technical approach to interoperability and cybersecurity, and a detailed analysis of project costs and benefits. Projects are subject to Buy American requirements.

Smart Grid Demonstration Program

The difference between the SGIG and the SGDP is that the SGDP is intended to provide financial support for demonstrations of how existing and emerging smart grid technologies can be innovatively applied and integrated to prove technical, operational, and business-model feasibility. The SGDP aims at demonstrating new and more cost-effective smart grid technologies that serve as models for other entities to readily adapt and replicate. The SGDP application due date is August 26, 2009, with $615 million expected to be available for new awards under this announcement. The performance period for eligible projects is expected to be between three and five years. Award selection is expected by early November 2009, and awards will be made beginning in December 2009 or January 2010.

The SGDP projects are in two "areas of interest": (1) regional demonstrations (preferably using an integrated team approach including all industry sectors and, where applicable, independent system operators or regional transmission operators) of advanced digital technologies for use in planning and operations of the electric power system and the electricity markets, such as microprocessor-based measurement and control, communications, computing, and information, and (2) grid-scale energy storage demonstrations, which include (i) battery storage for utility load shifting or for wind farm diurnal operations and ramping control, (ii) frequency regulation ancillary service, (iii) distributed energy storage for grid support, (iv) compressed air energy storage, and (v) demonstration of promising energy storage technologies.

The anticipated size of award for smart grid demonstrations is up to $100 million. DOE anticipates making 8 to 12 awards. For energy storage projects, a typical award ranges from $25 million to $60 million, depending on the type of project. DOE anticipates making 12 to 19 awards. As does the SGIG, the SGDP includes a preference for activities that can be started and completed expeditiously and reflects a requirement for a cost share of at least 50 percent of the total allowable costs from nonfederal funds.

SGDP applicants must file detailed applications, including a summary, project narrative (including project objectives, bibliographies, equipment appendix, etc.), project management plan, funding plan, commitment letters from third parties, budget, and environmental questionnaire. Key personnel must be identified.


These funding opportunities are significant. Successful projects will require intensive preparation and highly coherent proposals.

The Ballard Spahr Energy and Project Finance Group is ready to answer questions about, or provide you with counsel in developing, applications for SGIG and SGDP project funding.  For more information, please contact Howard H. Shafferman (hhs@ballardspahr.com; 202.661.2205) or Daniel R. Simon (simond@ballardspahr.com; 202.661.2212).


  1. The topic areas are equipment manufacturing, customer systems, advanced metering infrastructure, electric distribution systems, electric transmission systems, and integrated and/or crosscutting systems.


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