The American Recovery and Reinvestment Act (ARRA) just loves the smart grid. Having already doled out $3.4 billion in investment grants for technology development last month, U.S. Energy Secretary Steven Chu just added another $620 million for 32 smart grid projects.
These will run the gamut from energy storage to smart meters to more sophisticated projects, such as the "Project Boeing SGS: Demonstrating a Cyber Secure, Scalable, Interoperable, and Cost-Effective Smart Selection for Optimizing Regional Transmission System Operation."
This should be taken as great news for the smart grid industry as a whole, and for all those looking to the smart grid as fertile ground for deployment of communications technologies, network security solutions, next-generation batteries, and a whole raft of new intelligent energy applications floating on top of this new infrastructure.
This latest round, bringing the total smart grid stimulus to $4 billion this year, puts its focus on projects, rather than point technologies, and gives the whole industry a needed boost toward demonstrating that the smart grid is a real infrastructure that can modernize our aging electricity grid.
Instead of just tech companies and startups, now the big utilities are “stimulated” as well: ConEd will test interoperability and security in a smart grid in New York and New Jersey; Southern California Edison will test lithium-ion batteries for storage of wind power; PG&E will try out compressed air energy storage in a “saline porous rock formation located near Bakersfield, CA”; and Kansas City Power & Light will demo an end-to-end smart grid with “in-home customer systems and digital technologies, and innovative rate structures.” Combined, all these beneficiaries of this latest stimulus are expected to contribute $1 billion of their own private capital to bring these projects forward.
Within this round of stimulus, the variety shows just how much ground there is to cover. Half of the projects focus on energy management, harnessing sensors and software to monitor and control energy delivery and usage. This sets the stage for consumers, not just big industry, to start monitoring their energy usage in real time.
This is where Internet companies jump to attention. Google (Nasdaq: GOOG) is stepping into the fray with PowerMeter, an app that takes data from a Powermeter-enabled smart meter and displays it on a Webpage or iGoogle.
Pure-play companies like Tendril Networks , Gridpoint Systems Inc. , Control4, and others are attacking this space and will play within the utility grid, or inside the consumer's home or both, making energy consumption a real-time interaction.
The other half of the projects focus on energy storage, which is often overlooked but immensely important in moving utilities away from coal and fossil fuels. Because renewable energy sources like wind and solar don’t reliably generate power on demand or during peak usage times, their value can be greatly increased if their output can be stored and used when needed most.
There is no clear technology leader in the utility-scale storage market today, so it’s critical that utilities spend the time testing all the options, from batteries to compressed air to large-scale rechargeable flow-batteries.
While the smart grid has conceptually been around for at least 20 years, if not longer, depending on your definition, it plodded along because utilities never really had the proper incentives to actually sell less power to their customers or invest in modernization that offered difficult-to-quantify benefits of efficient operation or brownout reduction.
It’s a new world now, and the stars have aligned for the smart grid: Blackouts and brownouts have become a major public safety issue; climate change has forced policy makers to look hard at fossil-fueled furnaces within most utilities and mandate adoption of renewable energy; and technology has matured enough to offer utilities smart grid solutions that don’t cost a fortune and have at least a chance at interoperability and security.
Four billion dollars may sound like a lot of money, but when you consider the electricity grid is more ubiquitous than the telephone network and as digital as a rotary phone, then you see the opportunities ahead for companies offering solutions to what is essentially a whole new 'Net.
— Scott Clavenna, President & CEO, Greentech Media Inc.