DOE Advances Funding to Boost Power Grid And EV Battery Supply Chain

May 10, 2022 by Shannon Cuthrell

The Department of Energy announced billions in investment to modernize the power grid and build a domestic supply base for EV-critical materials, among other initiatives.

Over the last few weeks, the U.S. Department of Energy (DOE) has launched or advanced several investment initiatives to improve the power grid and expand battery supply chains for domestic EV development.

The new programs primarily draw from the $62 billion sum allocated to the DOE as part of the Bipartisan Infrastructure Law, signed last November. The law pumps billions into battery supply chains through 2026, focusing on mining and sourcing raw materials domestically or recycling used materials. It also funds projects to make the power grid more resilient to extreme weather events. 

In total, the Bipartisan Infrastructure Law will set 70 DOE programs in motion—57 of which are entirely new, while 13 expand on existing programs—over the next five years. 

We delve into the details below.


Strengthening the Power Grid

In late April, the DOE announced it would be seeking public input on a $2.3 billion grant to modernize the power grid to mitigate the effects of wildfires, extreme weather events, and other natural disasters. Grants will be divided among states, five territories and over 500 Tribal nations for activities ranging from removing trees and relocating power lines, to moving electrical equipment underground and installing weather/fire-resistant components, to implementing distributed energy and real-time monitoring systems. 


The DOE will invest to mitigate the effects of devastating wildfires. Image used courtesy of Mike Newbry/Unsplash 


The DOE noted in its announcement that weather-induced power outages have doubled over the last two decades, with the frequency and duration of power failures reaching record highs in recent years. In 2015, the DOE reported that 70% of the nation’s transmission lines and power transformers were 25 years old, but more recent analyst estimates say the average age is 40, with more than 25% of the grid being 50 years or older. 

The DOE is seeking comments, due June 2, from states on structuring the newly-announced grants, which will be based on population size, land area, weather patterns, and historical spending on mitigation efforts, among others. 


Boosting Domestic Battery Supply Chains 

A new tranche of funding announced on May 2 earmarks $3.1 billion to build commercial-scale battery material processing plants and retool, retrofit, or expand existing facilities. It also funds new development in battery recycling applications. 

In its funding opportunity announcement (FOA), the DOE said it expects to grant 17 to 34 awards. The agency’s top three areas of interest, slated to receive the majority of funding, are facilities for separating cathode battery materials, domestic production of battery-grade graphite from synthetic and natural feedstocks, and production and separation of battery-grade precursor materials—all areas facing growing demand in manufacturing. 


The U.S. has several robust deposits of graphite, but little capacity to harvest it. Image used courtesy of the U.S. Geological Survey


While visiting Detroit to announce the funding last week, U.S. Energy Secretary Jennifer Granholm noted that the $3.1 billion in funding would actually be doubled to more than $6 billion thanks to matching private-sector funds, “creating a windfall for the sector.” 

The program’s goals are informed by a 2021 analysis from the Federal Consortium for Advanced Batteries (FCAB) on the U.S.’s position in global battery manufacturing. The report identified several weak points, such as lack of integration in national/regional supply chains, easy access of competing nations to the U.S. market, predatory pricing from foreign competition, and vulnerability to price hikes and supply disruption. 

Crucially, the U.S.’s limited number of domestic cell manufacturers sets it back significantly in the market: The country’s cell manufacturing capacity is only 59 GWh, compared to 567 GWh in China.


The U.S. accounts for only 8% of global battery cell manufacturing capacity. Image used courtesy of the FCAB


To apply to this latest FOA, interested parties must submit letters of intent by May 27, while the full submission deadline is July 1. 


New Loan for Syrah’s Vidalia Plant

The DOE’s Advanced Technology Vehicles Manufacturing (ATVM) program, an arm of the Loan Programs Office, has been quiet for over a decade, but it’s coming back online with a $107 million loan to expand Syrah Technologies’ graphite processing plant in Vidalia, Louisiana. 

The plant is already undergoing a $176 million expansion that was announced earlier this year. And with the new funding, it’s projected to produce enough natural graphite-based active anode material (AAM) for around 2.5 million electric vehicles (EVs) by 2040.


Syrah Resources’ plant in Vidalia, Louisiana. Image used courtesy of Syrah Resources


Syrah sources its natural graphite from its mining and processing operation in Balama, Mozambique, in Southeast Africa. In December, the Australia-based mining company landed a deal with Tesla to supply the EV giant with 80% of the AAM produced at its Vidalia facility. The rest is expected to be sold to other carmakers. 

The Vidalia funding marks a restart of the ATVM loan program, which previously provided over $7 billion in direct loans to Ford, Nissan and Tesla in 2009 and 2010. The LPO’s press release on April 18 hinted at the agency picking up momentum to finance more energy infrastructure projects. With heavy interest from storage, biofuels and advanced nuclear sectors, the office averaged 1.3 new loan applications per week in April, totaling 77 active applications requesting $79.6 billion. 


Feature image used courtesy of Marco Bicca/Unsplash