Infrastructure Bill Charges Up Energy Storage

Energy Storage Playing an Increasingly Critical Role
Published On
Nov 19, 2021

Storage is a vital component in the expansion of renewable power and other clean energy technologies, all of which are essential to the Biden administration’s broader efforts to combat climate change. With that in mind, the $1.2 trillion infrastructure bill signed into law by President Biden on Nov. 15, 2021, invests heavily in efforts to expand energy storage.

Specifically, the infrastructure package allocates more than $7 billion toward various projects and improvements that either directly or indirectly support the energy storage industry.

According to the U.S. Department of Energy, this funding is an investment in the “supply chain for batteries.” It will support the production of critical minerals, sourcing of materials for manufacturing and recycling critical materials to reduce the need for mining and extraction, which have their own environmental impacts.

The $7 billion can be broken down in several ways. It includes $3 billion for battery materials processing grants, and another $3 billion in grants will be made available for battery manufacturing and recycling.

Lesser, but still large, amounts will be allocated to other related investments. For example, $355 million will be allocated over four years to support energy storage demonstration projects. Another $125 million will fund grants for battery recycling research and development and demonstration projects. The bill also allocates $150 million over four years for a Department of Energy (DOE) program to jointly showcase long-duration demonstration projects with the Department of Defense.

In addition, other funding will be made available by provisions in the legislation that expand the authority of the DOE’s Loan Program Office. These provisions will allow the LPO to invest in projects that increase the domestic supply of critical minerals, which are needed for batteries.

The storage industry could also benefit indirectly from other provisions. For example, $8 billion is allocated for a 30% manufacturing tax credit for investments in facilities that make or recycle energy-related products or reduce their greenhouse gas emissions. This could be applied to battery manufacturing.

More than $25 billion is being allocated to grants and programs to advance resiliency on the electric grid, of which storage is an integral component.

Additionally, in relation to enhancing the grid, the plan includes $200 million to support work on the use of second-life electric vehicle batteries for use in stationary grid storage.

About the Author

Rick Laezman

Freelance Writer

Rick Laezman is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at richardlaezman@msn.com.

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