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Obama Announces $3.4 Billion For Transition To 'Smart Energy Grid'

Applicants say investments will create tens of thousands of jobs, save energy

By James Limbach
ConsumerAffairs.com

October 27, 2009

Speaking at Florida Power and Light's DeSoto Next Generation Solar Energy Center, Obama outlined $3.4 billion in grant awards to fund a broad range of technologies that proponents say will "spur the nation's transition to a smarter, stronger, more efficient and reliable electric system." The end result, they say, "will promote energy-saving choices for consumers, increase efficiency, and foster the growth of renewable energy sources like wind and solar."

The grant awards are part of the economic stimulus and will be matched by industry funding for a total public-private investment worth over $8 billion. Applicants claim the projects will create tens of thousands of jobs, and consumers in 49 states will benefit from these investments in a stronger, more reliable grid.

An analysis by the Electric Power Research Institute estimates that the implementation of smart grid technologies could reduce electricity use by more than four percent by 2030. That would mean a savings of $20.4 billion for businesses and consumers around the country.

One-hundred private companies, utilities, manufacturers, cities and other partners received the Smart Grid Investment Grant awards. In the coming days, cabinet members and administration officials will fan out to awardee sites across the country to discuss how this investment will create jobs, improve the reliability and efficiency of the electrical grid, and help bring clean energy sources from high-production states to those with less renewable generating capacity.

The president's announcement includes:

• Empowering Consumers to Save Energy and Cut Utility Bills -- $1 billion. This money is designed to create the infrastructure and expand access to smart meters and customer systems so that consumers will be able to access dynamic pricing information and have the ability to save money by programming smart appliances and equipment to run when rates are lowest. This will help reduce energy bills for everyone by helping drive down "peak demand" and limiting the need for "stand-by" power plants -- the most expensive power generation there is.

• Making Electricity Distribution and Transmission More Efficient -- $400 million. The Administration is funding several grid modernization projects across the country that it says will significantly reduce the amount of power that is wasted from the time it is produced at a power plant to the time it gets to your house. By deploying digital monitoring devices and increasing grid automation, these awards will increase the efficiency, reliability and security of the system, and will help link up renewable energy resources with the electric grid. This would make it easier for a wind farm in Montana to instantaneously pick up the slack when the wind stops blowing in Missouri or a cloud rolls over a solar array in Arizona.

• Integrating and Crosscutting Across Different "Smart" Components of a Smart Grid -- $2 billion. Much like electronic banking, the Smart Grid is not the sum total of its components but how those components work together. The Administration is funding a range of projects that will incorporate these various components into one system or cut across various project areas -- including smart meters, smart thermostats and appliances, syncrophasors, automated substations, plug in hybrid electric vehicles, renewable energy sources, etc.

• Building a Smart Grid Manufacturing Industry -- $25 million. These outlays will help expand the manufacturing base of companies that can produce the smart meters, smart appliances, syncrophasors, smart transformers, and other components for smart grid systems in the United States and around the world -- representing a significant and growing export opportunity for our country and new jobs for American workers.

When fully implemented, the projects are expected to:

• create tens of thousands of jobs across the country, including high paying career opportunities for smart meter manufacturing workers; engineering technicians, electricians and equipment installers; IT system designers and cyber security specialists; data entry clerks and database administrators; business and power system analysts; and others.

• leverage more than $4.7 billion in private investment to match the federal investment.

• make the grid more reliable, reducing power outages that cost American consumers $150 billion a year -- about $500 for every man, woman and child in the United States.

• install more than 850 sensors called 'Phasor Measurement Units' that will cover 100 percent of the U.S. electric grid and make it possible for grid operators to better monitor grid conditions and prevent minor disturbances in the electrical system from cascading into local or regional power outages or blackouts.

• install more than 200,000 smart transformers that will make it possible for power companies to replace units before they fail thus saving money and reducing power outages.

• install almost 700 automated substations, representing about five percent of the nation's total that will make it possible for power companies to respond faster and more effectively to restore service when bad weather knocks down power lines or causes electricity disruptions.

• reduce peak electricity demand by more than 1400 MW, which is the equivalent of several larger power plants and can save ratepayers more than $1.5 billion in capital costs and help lower utility bills.

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