Obama has smart plans for the grid

US Smart Grid

When it comes to delivering power to America's electrical grid, we may as well be in the stone age. The system is so antiquated that some utility workers still have to go from house to house in order to read the electricity meter, and many companies will have no idea a home is without power until a customer rings up to tell them.

But finally, Barack Obama has taken action. Companies that make smart meters, thermostats and other elements of an electric transmission system were rejoicing yesterday as Washington announced an $8 billion to make the US grid a smart grid.

The funding has been a long time coming for the industry, as the condition of the infrastructure in place was becoming critical. "The industry was in a state of paralysis, waiting for these awards," said Ben Schuman an analyst for Pacific Crest Securities in Portland, Oregon, said yesterday in a telephone interview with Bloomberg.

Essential upgrades

There have also been whispers of billions of dollars worth of further investment to upgrade the power grid, essential if the US is to continue developing its use of renewable energy sources.

The city of Wadsworth, Ohio provides a good example of the sort of benefits people can expect from the awards. The city will get $5.4 million to add 12,500 smart meters and beef up its grid-charged electric cars. "This is a great first step toward transforming our whole energy system," says Mark Brownstein, an energy director at the Environmental Defense Fund, which like many environmental groups sees the smart grid as essential to both making the US more energy efficient and boosting the use of renewable power.

The only problem is that the sheer scale of the task ahead means that Obama's multi-billion dollar plans will only scratch the surface. The figure needed to truly convert the grid to "smart-status" is likely to fall in the hundreds of billions.

Smart incentives

However, one scheme that President Obama has implemented means that each awardee was required to match - or even spend more than - the government handouts. Even the companies and groups that did not benefit from government funding this time are likely to move forward anyway. As BusinessWeek reports, now that initial awards have been made, more projects will begin.

President has never made a secret of his ambitious plans for America's green energy plans, and how he wants to make the US the world's largest exported of renewable energy. A smart grid absolutely elemental to these plans. If the nation's electricity is to be provided by wind farms and solar plants, more sophisticated meters must be in place to smartly manage the flow of electricity during peak times, and consumers must be able to monitor how they use electricity. Smart grids are the future, and Obama has the ambition and the resources to get us there.

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