The Smart Grid Is On Its Way - Slowly

Oct 27, 2009 - Marc Gunther - Reuters

Today, President Obama travels to Arcadia, Florida, home to one of the nation’s biggest solar power plants, to announced 100 grants providing a total of $3.4 billion in recovery-act funding for the smart grid.

The federal money will unleash $4.1 billion of private investment that, according to the government, that will bring smart meters to about 18 million American homes, or 13 percent of homes.

It’s a big deal.

What would a smart grid mean to you?

In theory, you could save money by running appliances like dishwashers or dryers at night when electricity is cheaper. You’d know how much it costs you to watch that big-screen TV. (Care to take a guess? Read on.) If you installed solar panels on the roof, you could sell electricity back to the grid. Or recharge that electric car you may buy in 2010 or 2011.

The laudable goal is to empower consumers to buy electricity the way we buy groceries or gasoline or airplane tickets -- where we know what we are getting and what it costs when we make purchasing decisions.

Right now, we consume electricity without knowing how much we are using, understanding where it’s going or knowing the price until an unintelligible utility bill arrives in the mailbox once a month.

The trouble is, layering intelligence and transparency into the electricity grid requires action by two of the slowest-moving entities in all of America -- the federal government and the regulated utilities. So you can be certain this won’t be an overnight transformation.

In fact -- irony of ironies -- the news that Uncle Sam was going to be subsidizing smart-grid rollouts has inadvertently slowed down the process, albeit temporarily. About 570 applications were filed seeking a total of $14 billion in grants. While waiting to see who got the grants and who didn’t, some utilities put their plans on hold.

Last night, Carol Browner, the White House climate czar, Jared Bernstein, an economic advisor to Vice President Joe Biden and Matt Rogers, a senior advisor to Energy Secretary Chu and brainy alum of McKinsey & Co., held a conference call to talk about the smart-grid grants.

Browner and Bernstein said spending stimulus money on smart grid projects would “create or save” tens of thousands of jobs, and enable the growth of domestic renewable energy -- claims that may well be true but weren’t backed up with either data or logic. Of course, giving the electricity industry billions in subsidies will help create or save jobs; the more important question is how many of those  jobs would have been saved or created anyway had the government chosen to sit on the sidelines.

The DOE won’t release a list of all the grant recipients until today, but Rogers offered these examples on the media call. They went by in a hurry so don’t hold me to every specific:

Baltimore Gas & Electric will get a $200 million grant, to be matched with $251 million from the utility, to deploy 1.1 million smart meters. They will include displays in customers’ homes showing real-time energy use, which will be accompanied by time-of-day pricing. That’s key to enabling people to shift their discretionary energy consumption away from times of peak demands. That, in turn, will smooth out peaks in the demand curve, reducing the need for additional, costly power generation.

Cobb Electric Membership Corp., based in Marietta, Georgia, will get a $16.9 million grant, to be matched by the nonprofit cooperative, to deploy 190,000 across its network, to all of its customers. Deployments like this one should help determine whether the smart grid can deliver on its promises.

San Diego Gas & Electric will get a $21 million grant, matched by $31 million from the utility, to deploy an advanced wireless communications project, making it possible for two-way data exchange between customers and the utility. SDG&E is working with a variety of partners, including GE, Cisco and Google; it’s one of eight utilities in the U.S., India and Canada that is enabling customers to access their daily energy use online by using Google’s PowerMeter. 

While all of this activity will speed up deployment of the smart grid, most consumers will have to wait some time before the glories of the smart grid are revealed.

One problem will be breaking utility companies of old habits -- in many states, the more more power they sell, the more money they make -- so conservation is not in their economic interests. For another, deployment of the smart grid depends upon a patchwork of state regulatory schemes. (To learn more, read this excellent overview from ClimateWire on The New York Times website.)

But a lot of smart and powerful companies are pushing hard for the smart grid, so it’s on its way. You can see what GE is up to here, you can read Google’s view here, you can see what IBM is doing here. Just yesterday, I visited Best Buy, where key execs told me they think that networking the smart home to communicate with the smart grid will become a good business for them.

And if you’re wondering what’s driving your utility bill, check out the chart below, from the IBM website, citing DOE statistics. It’s not the typical TV, but the clothes dryer -- good reason to invest in a clothesline, at least until the grid gets smarter.

GreenBiz.com Senior Writer Marc Gunther maintains a blog at MarcGunther.com.

Image CC licensed by Flickr user ChazWags.

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