Many are Committed to Smart Grid

Editor in chief

During the past several months, the Department of Energy (DOE) announced some $35 billion in contract and grant funds to companies for sustainable and green energy projects. This is the United States’ largest energy program in dollars and technology, said Matt Rogers, Energy Secretary Steven Chu’s senior adviser who was hired to oversee the funds selection, disbursement and management. The $35 billion will support about $100 billion in combined government funds and private investment in technology development and project implementation, he said.

Of this $35 billion, $3.4 billion was awarded for smart grid projects, from large investor-owned utilities down to small municipals. Although the projects were identified in October, the first funding contract was not signed until March 4. Glendale (Calif.) Water and Power entered into an agreement with the DOE on that day to receive $20 million. On March 10, the U.S. Department of the Treasury announced that it will not tax smart grid stimulus funds, removing the uncertainty that was keeping many utilities from accepting the funds and moving forward.

This is good news for utilities, the companies that collaborate with them and their customers, but it does not mean that challenges to smart grid development have disappeared. The money will help, but as a recent Microsoft study reveals, smart grid transformation challenges remain.

Nearly 200 professionals within electric, gas and water utilities around the world participated in “The Microsoft Worldwide Utility Industry Survey 2010.” It identifies utility challenges from financial and regulatory to technology and return on investment. Survey respondents perceive distribution management and smart metering solutions as the most important technologies for successful grid implementation. Renewable resource grid integration and customer energy management solutions were close behind. Some 63 percent of the American respondents said the information technologies currently available are not sufficient to address future challenges. Worldwide, only 8 percent of those surveyed said their utility has technology architecture that is adequate to support new business processes and technologies.

Respondents also said they are concerned about the financial impact of smart grid development, including costs and return on investment. They said regulatory factors will influence smart grid technology deployment decisions.

These findings indicate that developing, installing and operating the technologies necessary to create the smart grid that many envision will not be pain-free. If technology developers, utilities, regulators and lawmakers work together, the transformation to a smart grid will occur. Investments being made by the private sector and its utility partners, as well as those by the federal government’s stimulus funds, indicate that all are committed to success.


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