The electric utility industry, specifically the power delivery side of the industry, will soon be responsible for creating tens of thousands of jobs and improving customer service and reliability in 49 states. At least that’s the purpose of the $3.4 billion the U.S. Department of Energy recently awarded to 100 companies to build the smart grid. Most press releases report the money will be used to install about 18 million smart meters, 700 automated substations and 200 advanced transformers.
Energy Secretary Dr. Steven Chu, told GridWeek attendees in September, that the $4.5 billion his department plans to distribute as part of the American Recovery and Reinvestment Act will be the down payment on the clean energy economy. These recent awards totaling $3.4 billion represent the first round of those funds.
In addition to the $3.4 billion in government stimulus grants, the 100 awardees must match the stimulus money they’re receiving with an equal amount of private funding. This will bring the total amount of money to be invested in the smart grid as a result of this announcement to about $7 billion. In addition, this money should begin to enter the market right away and must be spent in its entirety within the next 36 months. This is good news for the industry, especially for companies receiving the funding and their partners.
Investments of $7 billion in the next three years should certainly help stimulate the economy. But, how far will it go to transforming the current grid into the grid that will transport and distribute the green, sustainable energy Dr. Chu envisions? Several companies that applied for stimulus funding and have been planning large smart grid projects did not receive funding. Will they continue with those plans without help from the government? Clearly, that is what the DOE hopes for and that is what is needed.
In addition, many people are concerned about whether or not this investment will actually result in successful implementations, especially when questions about standards and DOE’s stipulations tied to the funding still exist. I too have these concerns, but I try to remember that the funding’s main purpose is to stimulate the economy, create jobs, and in the long run create a new clean energy economy. I hope the tax payer money and private investments lead to well-planned and executed projects that perform according to plan.
I congratulate the IOUs, municipalities, cooperatives and public utilities, as well as the few equipment manufacturers that received this first round of funding. Now, they must go forth, raise capital, create jobs and get started building the grid that will allow the industry, its customers and our nation to flourish.
Editor in chief