Senate Committee Conducts Hearing on Smart Grid Technology
A hearing on smart grid technology in the Senate Energy and Natural Resources Committee took place on Tuesday. The hearing focused on how government funding is being used and what type of interoperability standards are being implemented in the roll-out of a national smart grid.
Some of the specific issues included how to address cyber security concerns that smart grid communications create and how to promote common software communications throughout the industry. Additionally, it was noted that a key to effective smart grid technology is the ability to offset inconsistent electricity generation from renewable sources such as wind and solar. An effective smart grid needs to efficiently communicate dips in power from one energy source and replace it with power from other sources.
Senate to Examine Smart Grid Technology
Even though Congress recently approved $11 billion for it in the stimulus bill, many are still unclear as to what smart grid technology really entails. As a result, the Senate Energy and Natural Resources Committee will take up this issue in a hearing on Tuesday.
“Clearly, everyone agrees we should do more,” Chairman Jeff Bingaman (D-NM) said, “but we know we have to get down to the details of what does that mean.”
Witnesses at the hearing will range from the Department of Energy to Google. As we noted recently, Google has jumped head-on into the smart grid debate by strongly advocating the use of open standards and protocols for all smart grid technologies that are funded by the government.
Pickens Enthusiastic About Renewable Components of Stimulus Bill
One of the biggest private proponents of clean energy, T. Boone Pickens, has weighed in on the $787 billion stimulus bill and appears to be generally excited about its provisions. In a letter to supporters of his Pickens Plan he highlighted the following provisions as being key to growing our wind energy capacity:
- A 3-year Production Tax Credit (PTC) extension through the end of 2012;
- An option to elect a 30% Investment Tax Credit (ITC) in place of the PTC;
- An option to convert the Investment Tax Credit into a grant for projects placed in service in 2009, or 2010, or placed in service before 2013 provided construction begins in 2009 or 2010;
- A new $6 billion Department of Energy renewable energy and transmission loan guarantee program, which should fund around $60 billion in principal amount of guaranteed loans;
- Authority for the Western Area Power Administration to borrow up to $3.25 billion from the Treasury to build renewable transmission lines in the western United States, including western Texas.
It is clear from the above list that Pickens has made some significant progress on the wind energy half of his Plan. However, his more controversial natural gas proposals were not directly addressed by the stimulus.
Pickens Discusses Energy Components of the Stimulus Package
T. Boone Pickens appeared on CNBC on Monday and discussed the stimulus plan. Pickens seemed to be generally enthusiastic about the energy policies the plan contains, noting “We got a lot in on wind and renewables. You’re going to have the grid in it, and that’s important to the whole system; that’s the infrastructure that we need.”
[Note: unfortunately CNBC doesn't allow this video to be embedded so you need to click through to view it.]
Google Jumps Into the Smart Meter Industry and Debate
Google has weighed-in on the debate regarding the proposal in the federal stimulus that all smart meters should be required to use open standards and protocols. Not surprisingly, they have come out on the side in-favor of open standards, noting “open protocols and standards should serve as the cornerstone of smart grid projects, to spur innovation, drive competition, and bring more information to consumers as the smart grid evolves.”
Google has an interest in this debate since they are currently developing a free web service called PowerMeter that is a type of smart meter technology that can help consumers track energy use in their house or business. The graphic above illustrates how the service works.
Google notes that the current situation where consumers have no idea how much they are paying for electricity at different times is akin to “stick[ing] to a budget in a store with no prices.” But that with smart meter technology, people “could find all sorts of ways to save energy and lower electricity bills.” Google notes that studies estimate that this price savings could range from 5-15%. However, once smart meter technologies are widely installed, utilities should be able to create tiered pricing based upon supply and demand, thereby further reducing electricity bills, as well as the burden on the entire grid.
Smart Grid Provisions of Stimulus Bill Stir Debate
As Congress prepares to direct $4.5 billion from the stimulus package to smart grid and smart meter technologies, a debate is raging over the criteria to be placed on the funds. The current version of the House bill says that in order to receive funds, the smart technologies must use Internet-based networking standards or other open protocols and standards (if available and appropriate).
If enacted, this requirement will permit utilities to mix and match equipment from a variety of manufacturers, instead of being tied to just one proprietary technology. While this is probably an overly simplistic analogy, it brings to mind the difference between being able to use a standard electric charger for all cell phones, or being forced to buy a new one every time you get a new phone. It seems superficially, that having a more open and standardized protocol for our nation’s smart grid makes sense.
However, without a technical understanding of the state of this industry, it is hard for us to intelligently opine on which is the best course. Either way, it is important that we keep in mind that the goal of the bill is not to ensure that every company has equal footing going forward– but is to do what’s best for our electricity grid. As long as that goal is kept in mind in drafting the final legislation, we are agnostic as to which specific criteria is set.
How a stimulus package could improve the economy and energy policy
Recognizing that the incoming administration and Congress are likely to pass a stimulus package early-on, Google.org makes some suggestions on how this package could be used to improve our energy policy and economy at the same time. Here are the four major suggestions:
Invest in renewable energy by changing the structure of the wind and solar tax credits. With the current economy, many investors cannot take advantage of tax credits since they no longer have profits. If Congress transformed the credits into refunds, investors would receive the incentives Congress intended. READ MORE
