President Barack Obama pledged to turn the nation's electricity grid into a "smart grid,” making sure it was based on the latest technology. The 2009 economic stimulus helped him go a long way toward keeping that promise.
Obama's vision for a smart grid had two primary components. The first was updating the parts of the electricity grid that handle transmission and distribution, so that the systems are efficient and can detect and respond to power outages. The second part was modernizing electricity on the customer's end, ideally so that people could make decisions to use energy at off-peak times when it's less expensive.
The end goal, according to a Government Accountability Office report, is an energy grid "that is more reliable and efficient; facilitates alternative forms of generation, including renewable energy; and gives consumers real-time information about fluctuating energy costs.”
Massoud Amin, a professor of electrical and computer engineering at the University of Minnesota, said one reason the U.S. needs to upgrade its grid is that other countries are doing it -- and if we don't, it could "reshuffle the world pecking order. Emerging markets could leapfrog other nations.”
Data shows that power outages have been increasing in recent years, and the costs are substantial. Amin estimated that current power outages cost the economy between $80 billion and $188 billion annually. He projects that "a smarter, stronger grid" would reduce power outage costs by $49 billion and would increase system efficiency by enough to save another $20.4 billion. A smarter grid would also reduce carbon dioxide emissions by 12 to 18 percent, he said.
As for the costs, Amin estimated a fully smart grid would cost us between $25 billion and $30 billion a year for 20 years.
The administration hasn't spent that much, but it has made a significant down payment.
Official federal support for the smart grid actually started under President George W. Bush, with the Energy Independence and Security Act of 2007. But Obama committed additional money to the effort when the American Recovery and Reinvestment Act, better known as the stimulus, became law.
The stimulus provided $4.5 billion for this goal, according to the Energy Department, matched by an additional $5 billion in private funding. Those dollars have gone primarily to two initiatives.
One is the Smart Grid Investment Grant program, which allocated about $8 billion toward 99 separate projects. Of that amount, $3.4 billion was federal money.
The other is the Smart Grid Demonstration Program, which has supported 32 projects with a total budget of $1.6 billion. The federal share was about $600 million.
In addition, the stimulus funded more than 50 smart grid workforce development programs to train the next generation of electrical workers, as well as energy restoration training to over 600 local government and utility workers, according to the Energy Department.
The most noticeable part of the pathway between generation and electricity use is the residential "smart meter” -- a device that tracks a home's real-time energy usage and shares that information with utilities so that both parties can adjust their power needs. According to the Energy Department, more than 23 percent of all U.S. electrical customers -- 33 million customers -- had smart meters by 2011. An additional 3 million smart meters were installed between January 2012 and August 2012.
While Amin acknowledged that "a lot more needs to be done for the benefit of smart grids to kick in,” he said the administration deserves credit for what it's done so far. Most of what Obama pledged during the 2008 campaign has come to pass, with significant outlays in support. We rate this a Promise Kept.