President Obama, speaking at Florida Power and Light’s (FPL) DeSoto Next Generation Solar Energy Center, announced the largest single energy grid modernization investment in U.S. history. The newly announced funding is designed to help the nation transition to a smarter, stronger, more efficient and reliable electric system i.e. the Smart Grid, which will provide energy-saving opportunities, increase efficiency, and help grow renewable energy sources like wind and solar.
The $3.4 billion in grant awards are part of the American Reinvestment and Recovery Act, and will be matched by industry funding for a total public-private investment worth over $8 billion. These investments will create tens of thousands of jobs, save energy and empower consumers to cut their electric bills.
An analysis by the Electric Power Research Institute estimates that the implementation of smart grid technologies could reduce electricity use by more than 4 percent by 2030. That would mean a savings of $20.4 billion for businesses and consumers around the country. In addition, these energy savings will lead to significant reductions in greenhouse gas emissions.
One-hundred private companies, utilities, manufacturers, cities and other partners received the Smart Grid Investment Grant awards today, including FPL, which will use its $200 million in funding to install over 2.5 million smart meters and other technologies that will cut energy costs for its customers. The awards announced today represent the largest group of Recovery Act awards ever made in a single day and the largest batch of Recovery Act clean energy grant awards to-date.
Today’s announcement includes:
Investments to Help Consumers Save Energy and Cut Utility Bills — $1 billion. This large funding stream is designed to help spur the creation of the underlying infrastructure and expand access to smart meters. This will provide consumers with access to dynamic pricing information and the ability to save money by programming smart appliances and equipment to run when rates are lowest as well as help reduce energy bills for everyone by helping lower “peak demand” (or peak shaving)and thus limiting the need for “stand-by” power plants – the most expensive power generation there is.
Making the Electricity Distribution and Transmission Systems More Efficient — $400 million. The Administration is funding several grid modernization projects across the country that will reduce the amount of power wasted in transmission loss and increase the efficiency, reliability and security of the grid by deploying digital monitoring devices and increasing grid automation. This will also help link up renewable energy resources with the electric grid.
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 investments will help expand our manufacturing base of companies that can produce the smart meters, smart appliances, synchrophasors, 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.
Will Create Many Tens of Thousands of New Green Jobs Across the Country Save Energy and Make the Grid More Reliable
When these projects are fully implemented they will create tens of thousands of jobs across the country, include many 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.
The new funding announced will help make the grid more reliable, reducing power outages that currently cost American consumers $150 billion a year — about $500 for every man, woman and child in the United States. It will accomplish this by installing 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. This monitoring ability will also help the grid to incorporate large blocks of intermittent renewable energy, like wind and solar power, to take advantage of clean energy resources when they are available and make adjustments when they’re not.
In addition, more than 200,000 smart transformers will also be installed making it possible for power companies to replace units before they fail thus saving money and reducing power outages. Around 700 automated substations, representing about 5 percent of the nation’s total will be added. This 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.
In addition to adding critical redundancy to the network the funding will help add intelligence to the grid itself by adding a network of real time networked smart sensing devices that will provide grid operators with a situational awareness that they currently do not enjoy. In fact, power companies today typically do not know there has been a power outage until a customer calls to report it. With these smart grid devices, power companies will have the tools they need for better outage prevention and a much faster response to make repairs when outages do occur.
Help People Cut Their Energy Bills
The Recovery Act combined with private investment will put us on pace to deploy more than 40 million smart meters in American homes and businesses over the next few years that will help consumers cut their utility bills. In addition, more than 1 million in-home displays, 170,000 smart thermostats, and 175,000 other load control devices to enable consumers to reduce their energy use will be installed. Funding will also help expand the market for smart washers, dryers, and dishwashers, so that American consumers can further control their energy use and lower their electricity bills.
These technologies will help people spread their load as well reducing peak demand. This is critical. 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. Since peak electricity is the most expensive energy – and requires the use of standby power generation plants – the economic and environmental savings for even a small reduction are significant. In fact, some of the power plants for meeting peak demand operate for only a few hundred hours a year, which means the power they generate can be 5-10 times more expensive than the average price per kilowatt hour paid by most consumers.
The funding is also designed to put us on a path to get 20 percent or more of our energy from renewable sources by 2020.
© 2009, Chris de Morsella. All rights reserved. Do not republish.