Grid Week: Stimulus funding just a down payment, DOE says

WASHINGTON, D.C. – The $4.5 billion that the federal government has allocated in smart grid stimulus funding is just a utility’s down payment on the grid, Department of Energy senior advisor Matt Rogers, who oversees allocation of the funding, told Grid Week attendees today. It is a down payment in customer choice, but the expected return on investment is what has nearly every utility and a range of players and new partners clamoring for a piece of the market.

“We are trying to move this in quite a rapid fashion,” Rogers said in a panel today on smart grid implementation. “As part of making the down payment is the expectation that these are high payout projects…It’ll take $150 to $180 billion in investments, but the payout is four or five to one.” The government’s aid in the grid is also an investment in network reliability to create much more rapid response and a reliable grid network, as well as to create a grid that can handle the levels of renewable energy that the DOE is anticipating, he said.

The DOE reports its progress every 100 days to encourage accountability and make sure the movement – being expedited by the Obama administration – stays on track. Today, at day 217, Rogers said the DOE has awarded $23 billion of the $36.7 billion it has available for America’s energy and environmental future, of which the grid is a critical part.

“Our task is to make sure those resources are spent wisely,” Rogers said. “Move the money out the door quickly, go through a set of competitive processes to make sure we select great projects, do it with accountability and transparency and the expectation that we make a meaningful down payment on the future of energy and environment goals. We are judged by our ability to move the needle on those goals.”

The stimulus funding has been accused of slowing down the smart grid rollout as utilities wait to hear the verdict on their applications before moving ahead. There has been a dramatic over-subscription of applications to the DOE, Rogers said, which is great news for American tax payers but challenging news for a lot of the projects that will get turned down. Rogers said he expects most projects that are turned down will move ahead eventually anyways. Because of the onslaught of applications the DOE has received, it is cancelling phase three and pushing back phase two deadlines for new projects. Rogers said the DOE might even be able to achieve its smart grid goals in just one phase.

“By this time next year, we want to see more than half the money already spent,” Rogers said, adding that the DOE selects projects that are shovel ready, demonstrate plans for a high ROI and show the benefits that the industry believes the smart grid holds are actually there.

Part of realizing the benefits of the grid is getting consumers actively involved in energy management. As Joe Rigby, CEO of regional energy company Pepco, noted – giving a consumer a smart meter doesn’t save any carbon; it’s the consumers change in behavior that makes an impact. To encourage making this change, US Chief Technology Officer Aneesh Chopra addressed the Grid Week audience with a call for feedback from utilities to share their data sources that can be mined and then connected with entrepreneurs who can then make that information easy for consumers to understand, manage and adapt to. Chopra said his goal is to remove the barriers to learning from consumer data to build new applications for the market.

“With respect to the grid, what data do we have today that if made available not just at a federal level, but state and local, that if made more transparent will allow folks to make more innovations and demonstrate that when leadership is deployed?” Chopra asked.

Work on the smart grid aligns with the national’s overall strategy towards innovation, Chopra added. Investing in the building blocks of innovation, supporting basic research and doubling core R&D in key areas top the list. This also includes making sure standards promote innovation, that R&D investment plans include a thoughtful approach to innovation with some of that coming in the applied research phase and that there is a thoughtful way to bring procurement to innovation.

“We are trying to get things right over the long term, but there’s the second component – what happens in the next 90 days that makes things different,” Chopra said. “Many states have time-of-use pricing available, but we have tools that can essentially tell me in an ideal world at what point I should be adjusting the thermostat to take advantage of technologies available…We are keen to hear your ideas and will execute with rigor.”