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US announces funding of USD8 billion for power grid improvement [free access]

April 28, 2021

The Biden Administration has recently announced that USD8.25 billion in funding will be provided to modernise the nation’s grid, owing to its ambitious clean energy and climate targets. In its announcement, the Administration cited the historic power grid failure of mid-February that occurred in the state of Texas, leaving millions of people without electricity and plunging the state in crisis. The power failure had highlighted the vulnerabilities of the grid, including the unweatherised equipment, on being exposed to climate change-related risks.

 

Realising the need to further invest in the grid, the funding is expected to facilitate the construction of high voltage power lines to improve the reliability and resilience of the country’s electricity system. The Department of Energy (DoE) will launch two programmes to finance the construction of high voltage transmission lines. Of the total USD8.25 billion, about USD5 billion will go towards federal loans for projects focused on high voltage transmission and connection to offshore wind facilities whereas the remaining USD3.25 billion worth of project loans would be made available by the DoE through a federal initiative focused on energy infrastructure in Western states.

 

The move is part of a broader effort to help achieve the new climate target, recently set by the country, to cut carbon dioxide emissions by 50 per cent (up from 38 per cent earlier) from its 2005 levels, in 2030. The new commitment is equivalent to 41-43 per cent below its 1990 levels.