Why Obama's $3.4 Billion Smart Grid Investment Matters

The DeSoto Next Generation Solar Energy Center: needs a smart grid. (Florida Power & Light rendering)

The DeSoto Next Generation Solar Energy Center in Florida will be large enough to serve the entire city of Arcadia, whose very name suggests some kind of modern-day post-oil paradise. Here's what the 25-megawatt facility, the largest solar installation in the U.S. with 90,000 solar panels, looks like on video:

But there are clouds in the solar sky, and its name is the electric grid.

Obama: Plugged in.

President Obama, in Arcadia October 27, was only too happy to align himself with hopeful symbols like Arcadia and its promise of 100 percent clean utilities producing renewable electricity. But he also used it as the backdrop for the announcement of $3.4 billion in stimulus funding for the smart grid. It's desperately needed.

As Obama pointed out, "To realize the full potential of this plant and others like it, we've got to do more than just add extra solar megawatts to our electrical grid. That's because this grid-which is made up of everything from power lines to generators to the meters in your home-still runs on century-old technology. It wastes too much energy, it costs us too much money, and it's too susceptible to outages and blackouts."

Obama made an appropriate analogy - to the tangle of roads that existed in the U.S. before the interstates were announced (as a defense measure!) by President Eisenhower in the 1950s. "It was a tangled maze of poorly maintained back roads that were rarely the fastest or the most efficient way to get from point A to point B," he said, and that is the grid today: local power plants and small regional networks, barely capable of communicating with other grids or even with their own customers.

This is a huge challenge if we truly want to switch to renewable energy, because the wind and sun are located in inconvenient places such as east Texas and North Dakota. One of the reasons T. Boone Pickens killed his massive Texas wind farm was because the grid just couldn't deliver his plentiful energy.

The smart grid is also crucial to make the switch from gas-guzzlers to electric cars because plugging millions of EVs into the peak usage times in the current infrastructure is a recipe for melted transformers and blackouts. But electricity is use it or lose it, and we're currently wasting billions of kilowatt-hours at night when there's low demand. With a smart grid, customers will have pricing incentives to charge only in late evening, and touch-screens in their cars (as well as cell phone apps) to make setting up a charge as easy as programming a VCR (well, easier than that).

The Obama Administration outlined how the money will be spent:

• $1 billion for empowering consumers to cut bills and use off-peak electricity through giving them access to smart meters and dynamic pricing schemes;
• $400 million for improving electricity distribution, transmission and stability with digital monitoring and increased grid automation;
• $2 billion for enabling the optimum use of smart meters, appliances and thermostats, all in the interest of helping components of the Smart Grid to play better with other parts. This fund, the bulk of the stimulus package, will also help communications with plug-in hybrid cars and battery-electric vehicles, as well as with renewable energy sources.
• $25 million for expanding a manufacturing base for smart meters, transformers and appliances-though such a small amount of money is unlikely to go all that far.

 The $3.4 billion includes funding for a million in-home smart meters, 170,000 smart thermostats and 175,000 other "load control devices. It's also supposed to jump-start a market for smart appliances, though just how isn't spelled out.

The Obama administration said this project will leverage $4.7 billion in private investment and, of course, create tens of thousands of green jobs. The administration has gotten quite adept at that claim, and with our current dismal job prospects such employment is sorely needed. Where is Van Jones when we need him?