Obama Invests $3.4 Billion in Smart Energy Grid

These Smart Grid Investment Grant awards represent the largest group of Recovery Act awards ever made in a single day and the largest batch of Recovery Act clean energy grant awards to date. The end result is expected to be energy-saving choices for consumers, increased efficiency, and the growth of renewable energy sources such as wind and solar power.

FPL's DeSoto Next Generation Solar Energy Center (Photo courtesy FPL)

To announce the Smart Grid Investment Grant awards, President Obama joined FPL Group and Florida Power & Light Company officials for the commissioning of the largest photovoltaic solar facility in the nation.

The DeSoto Next Generation Solar Energy Center in Arcadia uses more than 90,000 photovoltaic panels that turn the Sun's rays into electricity to power more than 3,000 homes.

"Today we're taking the first step into the new clean energy economy of the 21st century," said FPL Group Chairman and CEO Lew Hay. "It's high-tech, it's low emissions, and it empowers consumers to control their energy usage."

Congratulating FPL on the new solar facility, President Obama said, "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 said the smart grid will save some of the $150 billion the country loses each year during power outages and put America on a path to source 20 percent of the country's energy needs from renewables by 2020.

President Barack Obama, October 27, 2009 (Photo credit unknown)

"It will allow us to more effectively transport renewable energy generated in remote places to large population centers, so that a wind farm in rural South Dakota can power homes in Chicago," he said. "And by facilitating the creation of a clean energy economy, building this 21st century energy infrastructure will help us lay a foundation for lasting growth and prosperity."

The smart grid investment grants are funded by the Recovery Act economic stimulus package and will be matched by industry funding for a total public-private investment worth over $8 billion.

Such an investment will create new pathways for energy and new green jobs, said Obama. "It's expected to create tens of thousands of new jobs all across America in areas ranging from manufacturing and construction to IT and the installation of new equipment in homes and in businesses."

The smart grid is expected to save consumers more than $20 billion on their utility bills by 2030. An analysis by the Electric Power Research Institute estimates that the implementation of smart grid technologies could reduce electricity use by more than four percent by 2030. That would mean a savings of $20.4 billion for businesses and consumers around the country.

Among the 100 smart grid grant recipients is Florida Power & Light, which will use its $200 million in funding to install 2.6 million smart meters and other technology that will cut energy costs for its customers.

In the coming days, Cabinet members and other administration officials will visit awardee sites across the country to discuss how this investment will create jobs, improve the reliability and efficiency of the electrical grid, and help bring clean energy sources from high-production states to those with less renewable generating capacity.

Today's announcement includes:

• Reducing Energy Bills - Investments worth $1 billion will create the infrastructure and expand access to smart meters and customer systems so that consumers will be able to access dynamic pricing information and have the ability to save money by programming smart appliances and equipment to run when rates are lowest. This will help reduce energy bills for everyone by helping drive down "peak demand" and limiting the need for "stand-by" power plants – the most expensive power generation there is.


• Making Electricity Distribution and Transmission More Efficient - The administration is investing $400 million to fund grid modernization projects across the country that will reduce the amount of power wasted from the time it is produced to the time it reaches end users. By deploying digital monitoring devices and increasing grid automation, these awards will increase the efficiency, reliability and security of the system, and will help link renewable energy resources with the grid. This will make it easier for a wind farm in Montana to instantaneously pick up the slack when the wind stops blowing in Missouri or a cloud rolls over a solar array in Arizona.


• Integrating and Crosscutting Across Different Components of a Smart Grid - Investments worth $2 billion will enable smart grid components to work together. The administration is funding a range of projects that will incorporate these various components into one system or cut across various project areas, including smart meters, smart thermostats and appliances, syncrophasors, automated substations, plug-in hybrid electric vehicles, and renewable energy sources.


• Building a Smart Grid Manufacturing Industry - Investments of $25 million will help expand the U.S. manufacturing base of companies that can produce the smart meters, smart appliances, synchrophasors, smart transformers, and other components for smart grid systems here and around the world – representing a significant and growing export opportunity for the United States and new jobs for American workers.

• Install more than 850 sensors - called 'Phasor Measurement Units' - that will cover 100 percent of the U.S. electric grid and make it possible for grid operators to better monitor grid conditions and prevent minor disturbances in the electrical system from cascading into local or regional power outages or blackouts. This monitoring ability will also help the grid to incorporate large blocks of intermittent renewable energy, like wind and solar power, to take advantage of clean energy resources when they are available and make adjustments when they're not.


• Install more than 200,000 smart transformers that will make it possible for power companies to replace units before they fail thus saving money and reducing power outages.


• Install almost 700 automated substations, representing about 5 percent of the nation's total that will make it possible for power companies to respond faster and more effectively to restore service when bad weather knocks down power lines or causes electricity disruptions.


• Power companies today typically do not know there has been a power outage until a customer calls to report it. With these smart grid devices, power companies will have the tools they need for better outage prevention and faster response to make repairs when outages do occur.


• Empower consumers to cut their electricity bills. The Recovery Act combined with private investment will put us on pace to deploy more than 40 million smart meters in American homes and businesses over the next few years that will help consumers cut their utility bills.


• Install more than one million in-home displays, 170,000 smart thermostats, and 175,000 other load control devices to enable consumers to reduce their energy use. Funding will also help expand the market for smart washers, dryers, and dishwashers, so that American consumers can further control their energy use and lower their electricity bills.


• Reduce peak electricity demand by more than 1400 MW, which is the equivalent of several larger power plants and can save ratepayers more than $1.5 billion in capital costs and help lower utility bills. Since peak electricity is the most expensive energy – and requires the use of standby power generation plants – the economic and environmental savings for even a small reduction are significant. In fact, some of the power plants for meeting peak demand operate for only a few hundred hours a year, which means the power they generate can be 5-10 times more expensive than the average price per kilowatt hour paid by most consumers.

Copyright Environment News Service (ENS) 2009. All rights reserved.