Now that the election's over, what's in the cards for the smart grid?
By: SGN Staff
By Doug Peeples
SGN News Editor
The election is finally over and it's time to get back to business, although we can't help wondering: What does the election outcome mean for the utility industry and the smart grid initiative? We set the stage here with some highlights (good and bad) of the past four years, then open it up for discussion through the Talk Back form below. Think of it as your turn at the microphone.
We don't claim the background we're providing is comprehensive. It's more like a quick jog down memory lane, a reminder of what we were most likely reading and talking about over the past few years.
Remember when all anyone in the industry could talk about were the American Recovery and Reinvestment Act of 2009 and the $3.4 billion for smart grid investment grants and demonstration projects?
Most will recall that of the total economic recovery and jobs creation package of about $831 billion, the energy industry benefitted from lots of other funding provisions (not just the $3.4 billion), including billions for energy efficiency, renewable energy, advanced batteries and vehicles, grid upgrades, expanded broadband access (a plus for AMI) and a lot more. And that doesn't include the loan guarantees and tax credit provisions. While the actual mechanics of picking stimulus projects to fund and delivering the dough got off to a fitful start, it did deliver and we've seen the results. It also made the Department of Energy, which distributed the bounty (and still is to a lesser degree), a household word in the industry and the smart grid's lead federal agency.
But we still don't have an energy policy. One of the most striking casualties of that omission is the U.S. wind industry. One of the fastest growing wind power markets in the world, the lack of a coherent energy policy is putting a real damper on its future. Many if not most of the major wind companies operating in the U.S. announced cutbacks, layoffs or both in recent months. The wind production tax credit, one of several incentives designed to help the industry, is among those that will expire at the end of this year. That and the overall renewable energy initiative were political targets during the campaign season. Will a second term for President Obama, who supports the tax credit, bring an extension? We don't know yet. The Democrat to Republican ratios in the House and Senate didn't change much after the election, so no reasonable person would think Republican opposition will stop just because the president won again.
Smart grid successes and failures
We're not going to spend a lot of time on the successes and failures of the past few years, just enough for a refresher. And as far as failures are concerned, you may have already heard more than you'd like so maybe we should get those out of the way first.
Flywheel energy storage company Beacon Power and solar panel maker Solyndra went bankrupt late last year. Beacon had been helped along with $43 million in DOE loan guarantees and Solyndra managed to snag $535 million. While there were other instances of companies self-destructing over the past few years, those two managed to become political ammo used against the Obama administration by critics in its early days and throughout the election campaign season. Another casualty, advanced battery and storage company A123 Systems, gave it up last month. But Johnson Controls announced at the time that it would buy the company's assets.
Pacific Gas & Electric taught us all some valuable lessons about customer engagement when its smart meter rollout backfired and the company found itself the target of a class action lawsuit in 2009. The utility somehow 'forgot' to tell its customers about the rollout, which had the effect of stepping on a wasp's nest. Other utilities learned the same lesson from their smart meter rollouts. In that respect, maybe we should call the PG&E suit and other customer resistance a success because we learned a new concept the electric utility industry seems to be taking to heart: customer engagement.
And last but not least, Xcel Energy's SmartGridCity project in Boulder, Colorado. What was once a prime example of the smart grid's biggest aspirations became mired in budget overruns and claims from residents that the benefits delivered were far less than what they were promised. At last glance, the cost recovery issue was far from settled for what was to have been the world's largest and shiniest smart grid project.
But there have been welcome surprises along the way, too. We learned about how important energy efficiency is to the ebb and flow of our power supply - and that cutting back on consumption is a lot cheaper than building new power plants. And despite the numerous political and financial/economic hits, renewable energy has grown so much the International Energy Agency expects it to be the second largest source of power by 2015, and nudge up to coal as the primary source 20 years later. Apparently, North America is getting good at renewables and efficiency.
And smart grid technology has probably grown faster than we would have anticipated four years ago. Grid optimization, smart grid communications, IT and OT, demand response, energy storage, meter data management and analytics and more have made strides. Smart buildings and building automation and energy management also seem to be growing legs. And while the electric vehicle market hasn't taken off with anything close to the flash and speed we were expecting, we're seeing steady advances in battery technologies that should bring lower EV prices and more range in the future.
Alright, now it's your turn. Based on what you've seen over the past four years, what do you expect to see in the next four? Will the U.S. get an energy policy? Will support for renewables and other smart grid initiatives continue? What new directions are we most likely to see? Please share your thoughts through the Talk Back form below.