President Barack Obama’s announcement of $3.4 billion in grants to help modernize the nation’s energy grid was steeped in references to 21st-century technology. But there are also strong parallels to the fundamental changes in Americans’ energy use that came at the beginning of the last century, as incandescent light bulbs and phenomenal growth in the auto industry displaced a shrinking demand for kerosene.
The Obama administration unveiled this multibillion-dollar initiative with descriptions of jobs created, lower energy bills and increased efficiency. It joins an existing framework of federal (and a growing number of state) tax incentives, grant and loan programs for energy efficiency and renewable energy use.
There are strong indications that smart grid technology will produce important implications for Georgia’s future energy consumption patterns. Smart grid describes the nation’s next-generation network for electricity transmission and distribution, using two-way communications and advanced sensors.
A research study published this year by the Federal Energy Regulatory Commission ranked Georgia fourth in the country in terms of achievable potential for reducing energy demand by 2019, through the use of smart grid technology combined with dynamic energy pricing strategies, below what demand patterns would be without them. A major reason for this is the state’s high rate of homes with central air conditioning.
Georgia landed a $37 million share of the new federal grants, plus a sizeable share of the $164 million grant to Atlanta-based Southern Co. for smart grid equipment and technology systems that includes transmission lines and substations. Southern reports that some of the energy savings resulting from the new technology will come from reducing delivery losses as energy moves from generating plants to homes and businesses.
Cobb Electric Membership Corp. won a $16.9 million grant to help pay for installing 190,000 smart meters throughout its systems in Marietta. The meters will give consumers real-time, useful information to help them adjust their energy use patterns, as well helping the utility improve its reliability and resistance to power outages.
The nation’s annual electricity consumption is projected to increase by 26 percent by 2030 — summer peak demand is expected to increase 39 percent. This growing demand will require an increased capacity to deliver reliable energy with the resilience to avoid service interruptions.
A smart power grid will provide consumers with useful feedback on electricity consumption and allow producers (including families with rooftop solar panels) to sell renewable energy for consumption in major population centers. A smart grid must also provide increased reliability and protection against blackouts.
A 2006 Oxford University study concluded that household consumers equipped with meters, like those being installed in Cobb County, can be expected to reduce their energy usage from 5 percent to 15 percent. Smart meters empower families to work together to lower their energy use and carbon footprint better than ever before. But until a smart grid is in widespread use, their impact on overall energy use patterns will likely remain limited.
Moving to a smart grid will require addressing other new challenges as well. For instance, the same wireless devices that play a critical role in helping families control their energy use also pose a potential cyber-security challenge — both to personal data on household networks and increasing potential vulnerability of data centers or other vital infrastructure. Better solutions from both policy-makers and industry will be essential to the success of smart grid.
It will also require that electric utilities institute “smart” rate schedules that give consumers financial incentives to modify their energy use and renewable producers the chance to sell power to the grid at rates that make sense.
As the nation moves toward policies that address its energy needs for the coming decades, smart grid represents a crucial part of the solution. But its implementation, along with the policies that support it, must also be smart and focused on solving these challenges in ways that empower and encourage Americans to make a meaningful difference.
Don Soifer is policy analyst with the Lexington Institute in Arlington, Va.
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