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Smart Grid Stimulus money comes in many forms... Money to flow by April... Smart Grid a better 2009 investment than alternative energy... By SGN Staff Feb 24, 2009 - 10:37:21 AM
Stimulus law provides multiple paths to Smart Grid funding. News sources are reporting that the recently signed American Recovery and Reinvestment Act (ARRA) contains $4.5 billion for Smart Grid projects. While that is true, the law also contains other funding provisions that could support smart upgrades to the electrical grid. SSTI Weekly Digest identifies several of these in its current (February 19) issue: · $16.8 billion to DOE for energy efficiency and renewable energy, including block grants for energy efficiency and conservation, Weatherization Assistance Program, State Energy Program, grants for advanced battery manufacturing, grants for alternative-fueled vehicle pilot programs, transportation electrification, Energy Efficient Appliance rebate and Energy Star programs, and more. · $3.4 billion to fossil energy projects including Carbon Capture and Energy Efficiency Competitive Grants, Fossil Energy R&D, Clean Coal Power Initiative, and more. · $1.6 billion to DOE Office of Science. · $400 million to Advanced Energy Projects Agency – Energy. · $10 million to the Western Area Power Administration for upgrading the grid following a review of the effect of transmission issues on renewable energy sources, as well as another $3.25 billion in borrowing authority to both WAPA and the Bonneville Power Administration · $6.1 billion to the DOE for various environmental cleanup projects, uranium enrichment decontamination and decommissioning, and money for the Office of the Inspector General. · $300 million to the Department of Defense to assist in developing energy efficiency technology. · $6 billion to the DOE to cover the cost of guaranteeing loans through the new Innovative Technology Guarantee Program for supporting renewable energy and transmission technologies and to the existing Advanced Technology Vehicles Manufacturing Loan program. According to SSTI, DOE anticipates guaranteeing more than $60 billion in loans to renewable energy projects. In addition, the income tax credit for renewable electricity production will be extended for three years for qualified facilities. Quick Take: SSTI has the best summary we've seen identifying those clauses of the new stimulus act that affect technology, with many specific references to the Smart Grid.
SSTI Weekly Digest special stimulus issue (if necessary, click February 19, 2009, on the left)
DOE promises stimulus money will start in April. The passage of the stimulus bill means DOE will soon have a flood of money. But it’s not clear whether the bureaucracy is in place to handle disbursement in a quick and efficient way. Among the holes in staffing are three unfilled seats in the president’s cabinet and fifteen deputy secretaries still awaiting confirmation. Even so, officials are determined to get the money out the door sooner rather than later. For example, Energy Secretary Steven Chu, whose DOE has control over some 40 billion stimulus dollars, has assembled a team to ensure the money gets spent, “wisely but also quickly.” Chu claims to have drastically reduced the loan-guarantee paperwork and has set a goal for the department to start cutting checks by the end of April. At the 2009 National Electricity Delivery Forum last week, DOE Secretary Chu said he was hiring McKinsey & Co. to assist. QuickTake: Though we want to give Secretary Chu the benefit of the doubt, we’d like to see him filling the many vacant slots at DOE before turning to consultants. To the extent he uses consulting firms, it would be wise to include firms with smart grid credentials.
EE News report on Chu’s stimulus money team (requires subscription) New York Times report on the spending challenges faced by the administration 2009 National Electricity Delivery Forum Web site
Smart Grid investments will outpace alternative energy in 2009, says cleantech guru. In an article in Seeking Alpha, cleantech investor Charles Morand predicts Smart Grid companies will outperform alternative energy investments this year. In the past, trendy technologies like solar power outpaced Smart Grid, partly because of their growth rate and party because of Smart Grid’s cryptic business model. But things began to change when President Obama made updating the grid a key part of his presidential campaign and now in his stimulus package. Canada is also getting on board, with the province of Ontario recently recommending C$1.6 billion be spent on grid upgrades over the next five years. And the stimulus package is already starting to make a difference, according to Michael Ware Managing Director of Good Energies, a leading global investor in clean energy. Addressing the National Electricity Delivery Forum, he said his investors were looking at renewable investments differently since the stimulus package’s investment tax credits allowed an increased return. Quick Take: Morand’s article is a good primer to help people understand why the sector is gaining interest with institutional investors. However, the author gets it wrong when he says only $4.3B of stimulus will go to Smart Grid. There are several other pots of money in the stimulus that could help pay for smart gear, including those for transmission and energy efficiency, as explained in the previous story.
Seeking Alpha story on Smart Grid investment
Google-GE press conference disappoints. Over 400 people attended a GE-Google press conference on February 17 in Washington, DC, and hundreds more joined the Webcast. They came because of curiosity about Google, but were underwhelmed with the information provided. Instead of giving any new information on PowerMeter, Google’s in-home “dashboard,” the event was dominated by an uninformed discussion. It has the flavor of a GE event unfortunately, not what we would expect from Google. Quick Take: As Jesse Berst pointed out in a recent SGN article, Google is so new to the sector that it does not yet know what it does not know. It was clear at this event that they do not yet know that GE is a Smart Grid laggard not a leader. Google would have been better off to go it alone.
Google, GE Conference on YouTube SGN article on the Google announcement
Consumer advocates could slow Smart Grid progress. A session at the recent National Electricity Delivery Forum could be a preview of debates that will be taking place at the state level over the next few years. Like many consumer advocates, Mark Cooper, the Director of Research for the Consumer Federation of America, wants the grid funded on a "least cost" basis – by which he means the lowest first cost. Others, such as Linda Stuntz, the Chair of the DOE Electricity Advisory Committee, want the lowest lifetime cost, even if the upfront cost is a little more. They both agreed that Smart Grid benefits have been proven on the supply side, but not yet adequately proven on the demand response side. This lack of "proof" may also raise its head at state regulatory hearings when utilities attempt to justify demand response deployments. Europeans at work on next-generation grid standards and technologies. By some estimates, the European Commission spends as much as 10 times as much on Smart Grid research as the U.S. federal government. Under an EU-funded project called S-TEN, a team of researchers from Germany’s FGH Institute have announced progress in applying so-called “semantic Web” techniques to the electric power network. The work proposes a framework to allow components to self-describe themselves to the network. This does away with the need to maintain a massive database of every device – something that will be increasingly difficult as we move into an era where the grid will be attached to tens of millions of meters, monitors, sensors, thermostats, load control devices, distributed generators, solar panels, windmills, and so on. The project uses the OWL (Ontology Web Language) defined by the W3C, the committee that oversees international Internet standards. Quick Take: We wish the European Commission would consult closely with the American standards efforts from the GridWise Architecture Council and the National Institute of Standards and Technology (NIST).
ElectriNet article on the semantic Web for Smart Grid GridWise Architecture Council home page GridWise Architecture Council and NIST Working Group
Top-level national leaders dive into Smart Grid issues. First, President Obama called for a newer, smarter electrical grid and more money for renewable sources of energy. He’s even taken that message to the Canadian government to get them on board. Now other federal leaders are jumping on the bandwagon. At a Clean Energy Conference held in Washington, DC, on February 23, Senate Majority Leader Harry Reid (D-Nev.) announced plans to introduce legislation to give the feds the power to override states authority in siting and building transmission lines, in order to clear away one roadblock to alternative energy sources. At the same conference, House Speaker Nancy Pelosi (D-Calif.) also called for an expanded transmission grid and Smart Grid construction to allow for increased access to wind and solar power. Other prominent conference attendees included former President Bill Clinton and former Vice President and Nobel prize winner Al Gore. Quick Take: When it rains, it pours. The number of national leaders touting the Smart Grid reinforces our previous statements that when it comes to building the Smart Grid, the U.S. has past the tipping point and is moving forward at speeds that were unthinkable just a year ago. Report on Obama’s energy message to Canadian leaders Reuters story on stimulus bill money for Smart Grid and renewable energy CNet article on Senator Reid’s plan for energy infrastructure AP report on Clean Energy Conference
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