‘Smart grid’ gets big stimulus from US recovery plan

The more than $38 billion in economic stimulus money appropriated to the US Department of Energy (DOE) from the American Recovery and Reinvestment Act (ARRA) includes $4.5 billion to begin building a new “smart grid,” considered a prerequisite to major expansion of wind, solar, and geothermal energy facilities. A new transmission system will be needed to collect green energy generated at scattered points across sparsely populated areas and transport it to high-consumption metropolitan areas.

“The investment we’re making today will create a newer, smarter electric grid that will allow for broader use of alternative energy,” President Obama said in remarks at the signing of ARRA on 17 February.

According to a report issued by DOE’s Electricity Advisory Committee in December, smart features will enable consumers to lower their bills by programming appliances to turn on at times of the day when power is in less demand and less expensive. Such load-leveling will lessen the need for utilities to build new plants and transmission lines that are only switched on when electric demand peaks—in some cases for just a few hours each year. Fewer power outages and the capability to remotely pinpoint the cause of such problems are other smart-grid features.

The new system will be self-healing, continuously monitoring itself to detect and respond to problems that occur too quickly or are too large for human intervention, according to a DOE vision plan. That will also make the grid more secure and capable of withstanding physical and cyber attacks. New generating capacity or electric storage facilities could be plugged into the smart grid with the same ease as plug-and-play peripherals for computers.

Clinton, Gore among supporters

An unusual coalition of government officials, business and labor leaders, and environmentalists convened in Washington, DC, in February to drum up political support for a new grid. Former president Bill Clinton and former vice president Al Gore attended the round-table session organized by John Podesta, the well-connected former White House chief of staff who now heads the liberal think tank Center for American Progress. Among the other participants were Secretary of Energy Steven Chu, Senate majority leader Harry Reid (D-NV), House speaker Nancy Pelosi (D-CA), and several hundred reporters. Gore spoke of a smart-grid-enabled future where rooftops covered by photovoltaics will feed the grid, displacing an electricity industry now dominated by carbon-belching, coal-burning stations.

Plenty of hurdles obstruct the path to a smart grid, not the least being finding someone who will pay for a system that legendary oilman-turned-energy-independence-crusader T. Boone Pickens estimates will cost $200 billion. Utilities by and large are risk-averse, and their business model generally does not provide economic rewards for cutting-edge technologies, the DOE advisory committee noted. Determining exactly where to string the new high-voltage transmission lines will be arduous and contentious. State public utility commissions will decide whether utilities can add the cost of smart-grid technologies to their rates; it’s likely that those decisions will vary from one state to the next, the committee report cautioned. As Pelosi put it, “It’s always in someone’s interest to not get this done.”

In March DOE’s electricity delivery and reliability office, which will administer the ARRA funds, announced that it will soon solicit proposals from industry for an unspecified number of regional smart-grid demonstration projects. The agency will pay up to half the cost of the winning proposals, which will help to better pin down smart-grid costs and benefits, verify the viability of the technologies, and validate new business models. According to DOE’s electricity office, the more than 3000 miles of needed new or modernized transmission lines will create jobs immediately.

Standards are needed

Among its other features, the smart grid will provide an integrated digital communications system to replace the slow and localized ones now used by the power industry. But because standards don’t yet exist to ensure the interoperability of smart-grid components, there is some concern that the short-term stimulus funds could wind up paying for components that will become white elephants.

“I’m concerned about obsolescence,” Senator Lisa Murkowski (R-AK), the ranking minority member of the Committee on Energy and Natural Resources, said at a hearing on 3 March. Murkowski recalled that Chu had previously described the lack of standards as the biggest impediment to modernization. She suggested that the disbursal of the ARRA grid funding be made contingent on development of the necessary standards.

“Before we can create a common language, we must assemble a common alphabet,” agreed Evan Gaddis, president of the National Electrical Manufacturers Association, lamenting the slow pace of progress on standards. “NIST is our navigator, and the industry is ready to row.”

NIST was instructed by Congress in 2007 to coordinate development of new grid standards, and ARRA provides $10 million for the agency to do that. Patrick Gallagher, NIST’s deputy director, told the Senate committee that due to the complexity of the existing US grid, suites of standards will need to be developed to cover multiple types of grid components. But Gallagher assured Murkowski that the potential for obsolescence will be minimal due to the open-architecture approach.

Utilities throughout the country are in the midst of installing smart meters in 40 million homes; the meters are expected to provide consumers with a new awareness of their energy usage at any given time. Edward Lu, advanced projects manager at Google Inc, told the Senate hearing that studies indicate that when consumers can see in real time how much energy they are using, they save 5%–15% on their usage by making simple behavioral changes.

Lu said the internet giant is developing a free software tool, PowerMeter, that will work in conjunction with the smart meters to provide consumers remote access to their home electricity consumption data from their computers or cell phones on a near-real-time basis. Other third parties also can be expected to offer energy management applications that will be smart-meter-based, he said.