The Three Best Things About Today's Smart Grid Demonstration Grants

Energy Secretary Steven Chu today announced the winners in the $620 million Smart Grid technologies demonstration project grant sweepstakes. The good news is that unlike the $3.4 billion in Smart Grid investment grants awarded in late October, this round of funding is largely dedicated to projects that push the frontiers.

The bulk of the investment grants awarded in October went to smart meter projects that use existing technologies. Although the total amount of this round of awards was only $620 million (plus $1 billion in matching money from the private sector), the industry crowd should be happier with today's news.

The American Recovery and Reinvestment Act (ARRA) money is being awarded to a varied array of 32 projects ranging from large-scale energy storage to smart meters.

"These demonstration projects will further our knowledge and understanding of what works best and delivers the best results for the Smart Grid, setting the course for a modern grid that is critical to achieving our energy goals," Secretary Chu said during his announcement, which was made in Columbus, Ohio. "This funding will be used to show how Smart Grid technologies can be applied to whole systems to promote energy savings for consumers, increase energy efficiency, and foster the growth of renewable energy sources like wind and solar power."

Here at SGN, we are especially pleased that much of the money went to projects that, in Chu's words, "show how Smart Grid technologies can be applied to whole systems." For too long, we've been relying on small pilots that test a single technology in isolation. What we need instead are projects that test entire systems at scale. With these grants, we now have many such projects that will be underway soon. (See below for links to Modern Grid initiative white papers that lay out the importance of a systems view).

The awards were divided into two groups. One group includes 16 awards that total $435 million, which will be used to support fully integrated regional Smart Grid demonstrations in 21 states and represents more than 50 utilities and electricity industry organizations with a combined customer base of almost 100 million consumers. Projects include improved communications technologies that will make Smart Grid components capable of communicating with each other in real time.

Such components include: sensing and control devices that help grid operators monitor and control the flow of electricity to avoid service disruptions and power outages; smart meters and in-home monitoring systems that allow consumers to better manage their energy use and save money; energy storage options, and on-site and renewable energy sources that can be integrated into the grid.

The second group of 16 projects was awarded a total of $185 million. These projects involve large-scale energy storage demonstration projects. Federal and utility officials hope large-scale energy storage technology can be developed to the point that it will enhance the reliability and efficiency of the Smart Grid, while reducing the need to build new power plants.

Improved storage capabilities will allow much more efficient use of intermittent renewable energy sources, such as wind and solar. Large-scale storage could hold electricity produced at off-peak times for later use as needed. That storage would provide the ability to more fully integrate power generated from wind and photovoltaic systems into the grid, which would contribute to improved frequency regulation and peak energy management. The technologies in these projects include advanced battery systems which include flow batteries, flywheels and compressed air storage systems.

We're also happy (and you should be too) that roughly 30% of the money went to utility-scale energy storage. We're long overdue to take grid storage more seriously; these projects will provide enough real-life lessons that even conservative utilities will have enough data to consider storage-cased solutions.

The Electric Power Research Institute (EPRI) has issued an estimate that adopting and implementing Smart Grid technologies could cut electricity use by over 4% by 2030. That translates into total savings for businesses and consumers of about $20.4 billion.

   Demonstration grant complete list of awards (pdf)

   A Systems View of the Smart Grid

   Smart Grid Stimulus Awards & Projects

   Smart Grid Technologies resources on SGN

   Energy storage resources on SGN

   Faces of the Recovery Act: The Impact of Smart Grid (video)