The federal stimulus bill is giving smart grid initiatives a jump start, allocating about $11 billion for utilities to shift their energy supply networks to digital technology, increasing efficiency and reliability and cutting costs. The bill includes $4.5 billion the Department of Energy will use mostly to provide matching grants to utilities for smart grid development and $6.4 billion that probably will be provided to utilities as loans.

Duke Energy has already spent $35 million on smart grid initiatives, and even before the stimulus plan was announced, it intended to spend as much as $1 billion on smart grid projects over the next five years, says CTO David Mohler. About 15% of that spending--as much as $150 million--will be IT-related.

Duke is waiting to get details on the standards that will be required for these projects, the funding mechanisms, and the application process. The government's encouragement of smart grid development is likely to speed up Duke's plans so it can accomplish in one or two years what it had planned to do in five, Mohler says.

For now, he says, everyone "is trying to figure out how to conceptualize what is really going to be required to support smart grids."

Smart grids let utilities better manage the flow of power to homes and businesses, and raise prices when demand is high and lower them during off-peak times. They also give energy customers more information on their energy consumption so they can program high-use electrical appliances like heating and air conditioning systems to reduce consumption at times of peak usage. This technology relies heavily on networks and switches for power management, data collection, communications, and real-time monitoring, as well as building sensors and applications for meter reading and optimizing energy use and distribution.

"IT is going to power this whole thing," says Todd Thibodeaux, CEO of CompTIA. "None of this is going to work without software and hardware."

Duke Energy already has installed 80,000 smart meters as part of a pilot project in Charlotte, N.C., and is expanding that effort. Smart meters let Duke provide its business and residential customers with real-time information on their energy use, as well as data on how much their appliances cost to operate, letting them save money by cutting back usage during high-rate peak times or by replacing inefficient appliances.

The company also plans to build a smart grid in Cincinnati, where it serves 700,000 customers, spending about $1 billion on sensors, intelligent meters, and other system upgrades.

Duke is working to make its substations, transformers, and line sensors operate and communicate on computer networks, monitoring for abrupt changes in the flow of electricity and providing speedy alerts when power outages occur. The aim is to improve efficiency, reduce surges, prevent outages, and help restore power more quickly after it's been lost.

Job Creation
The smart grid effort along with other energy initiatives in the stimulus package could create 370,000 jobs, with 85% of the funds going to IT jobs and the remainder going to construction, says Daniel Castro, a senior analyst with the Information Technology and Innovation Foundation, a Washington think tank. Jobs created will span traditional IT professions, including specialized ones to support smart meters, networking protocols, the communication infrastructure, and related networking hardware and infrastructure, Castro says.

Smart systems have the potential to save energy consumers billions of dollars a year. The Department of Energy's Pacific Northwest National Laboratory ran a demonstration project, including 300 homes in Washington and Oregon, which found that, on average, consumers saved about 10% on their electricity bills. This project provided consumers with real-time price information delivered via broadband so they could adjust usage to take advantage of times when energy was less expensive, and it included equipment that automatically adjusted energy use based on price. The project also provided appliances with computer chips to sense and respond to stress on power-transmission systems.

A separate DOE study reported cost reductions of up to 15%. That could mean huge savings for heavy energy-using businesses, like Google and Yahoo.

Photo by Jupiterimages