As Congress and the incoming administration begin to iron out the details of the next stimulus, support is growing for funding a smart electric grid in the economic package. But will this type of project yield short-term benefits? During today's OnPoint, Katherine Hamilton, president of the GridWise Alliance, a coalition of more than 70 companies supporting the construction of a smart grid, explains how many immediate and long-term jobs could be created through the development of a smart grid. She highlights the technologies that would be used in the smart grid and explains how the new grid would affect consumers.
Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is Katherine Hamilton, president of the GridWise Alliance, a partnership of over 70 companies supporting the construction of a smart grid. Katherine, it's great to have you on the show.
Katherine Hamilton: It's my pleasure.
Monica Trauzzi: Katherine, there's a lot of talk in Congress right now about building a smart grid and it's getting a lot of attention in terms of funding through the next stimulus package. Before we get into the policy specifics I want to have you define what exactly the smart grid is and what it's going to do for us.
Katherine Hamilton: OK, the smart grid is a wide range of technologies. It's anything that makes the electric grid communicate better from the power station all the way through the distribution substation all the way to the home. So it's anything in between there that allows communication between any of those systems to allow the grid to be more flexible, to be more reliable, to be safer, to provide more environmental benefits, and to be more efficient.
Monica Trauzzi: What are some examples of some of the technologies that might fall under that category?
Katherine Hamilton: Example, if you start at your home, say you would have a smart meter. Then if you get to the distribution substation level there would be controls within the substation that would allow the utility to understand not just from an aggregate point of view what all the customers are doing at once, but what each individual customer is doing. Then, once you get on the transmission line for example, you would be able to have wind energy or distributed energy sources, energy storage, all communicating with the transmission and the power plant production with technologies that are essentially information technologies. It's just like using the Internet, but on the grid. So, in the same way that the Internet changed industries like healthcare and education, information technology can also change our electric grid.
Monica Trauzzi: So, with all this talk that we're hearing about increasing the use of renewables in order to create electricity and expanding our use of plug-in electric hybrid vehicles, is it all sort of premature if we don't address the grid issues and build this smart grid?
Katherine Hamilton: Well, it's not premature to develop those technologies, of course not, but we do need to make sure that we have a smart grid in order to smoothly interface with the grid. For example, if we have a million hybrid vehicles out there and everybody gets home at five o'clock and plugs them in, what is that going to do to our grid? If we have a smart grid system that allows a utility to manage that so that not all of the load is seen at the same time, that will enable us to rapidly deploy these technologies and in an effective way.
Monica Trauzzi: So how would the smart grid affect the average American? I mean what would be different for the average person at home?
Katherine Hamilton: Well, it could, if you don't want to participate, not do anything really. On the other hand, if you do want to participate you would be able to have a lot more choice over what you do from an energy standpoint. So, for example, say you were on a fixed income or you have limited resources and you can say I only have $100 to spend on energy each month. How would I do that? And if you have a smart grid system, and they're trying this in Texas with CenterPoint Energy in Houston, you plug in the amount you want to spend and they tell you this is how you need to use your energy this month. If you're a utility then you can also allow customers to be given more choice. So that a utility can say we would like to be able to cycle your air conditioning on and off for certain times during the summer for example, and a customer would be able to opt in or opt out of that and get benefits from the utility from doing that. Customers will be able to have a lot more flexibility, a lot more choice in the decisions that they make on using their energy.
Monica Trauzzi: Is there a clear blueprint of how all the elements of a smart grid will fit together on a national scale or does this sort of need to be looked at regionally and addressed regionally?
Katherine Hamilton: It does need to be done regionally first. That's our first choice, is to get some more regional demonstrations done so that we can see, given different scenarios, different parts of the country, what works best. We are technology neutral in that we just want to see the markets open for a wide range of smart grid technologies, whatever those might be. North Dakota is going to look a lot different than Texas or California or Colorado. And so what we want to do is see what works in different places and also with different configurations. And some, in the old way, the utility generated electricity, sent it over transmission lines and distributed it to the customers. Well, now utilities may just do the distribution end. You might have independent system operators operating a transmission grid. You might have independent power producers producing electricity on the power production end. So trying to integrate all of those systems into one seamless integrated system is what we are hoping for.
Monica Trauzzi: So, you also believe that the stimulus would be a successful vehicle for starting to find such a project. Make the case for why the smart grid should be included in the next stimulus.
Katherine Hamilton: Absolutely. We think that if you put $16 billion over four years, that's $4 billion a year, you will stimulate 64 billion in investments from utilities and others who are building a smart grid. And that would create, over four years, 280,000 jobs. We just released a report that indicates that. It also shows that just in the first year alone you could create 150,000 jobs, those are the shovel ready jobs. Over 10 years you would be able to sustain about 140,000 very high paying, very high-value jobs by doing a smart grid. And that's just given what we know. I mean once this starts happening, just as it did with the Internet, only your imagination can stop. We don't even know exactly all of the other offshoot industries that are going to occur by doing a smart grid.
Monica Trauzzi: Which industries would benefit the most through expansion of the smart grid and funding in the stimulus?
Katherine Hamilton: Well, what we looked at, direct jobs, and we looked at metering, so meager manufacturers. We looked at utilities that have meter readers. Well, there's going to be some decline in meter readers if you have smart meters, but those meter readers can be retrained to be meter technicians. It's a higher value, higher paid job. We also have all of the transformer companies, software companies, communications companies and service companies, all along the grid. So from the substation level all the way through the transmission grid level, the controls, these are direct jobs. We also have some direct, these are manufactured in the United States product jobs, raw material jobs as well as some of the components to all of these different technologies that can be installed. Indirect jobs we didn't even look at and that is probably much higher than direct jobs from the smart grid, and that is jobs created from renewable energy, jobs created from plug-in hybrid vehicles, from distributed generation, from energy storage. All of these different technologies are, in essence, indirect jobs created from to the foundation of a smart grid.
Monica Trauzzi: So, how do you successfully educate staffers and legislators on the Hill about the components and benefits of the smart grid? I mean what does the next month look like for your organization as we start looking at a new stimulus?
Katherine Hamilton: A lot of education. There are a lot of people very interested in this and it's really a matter of getting the right material into their hands. We have a lot of information. We have our jobs report. The Electricity Advisory Committee at Department of Energy just did a smart grid report. We'll get those into their hands. Department of Energy has also done a smart grid primer book that we'll get out there. We're also planning a series of briefings to staff that can be very, very factual. As you look at some technology, let us explain to you what that is and what the ramifications are for putting legislative language in for that technology. So it's going to be a lot of educating.
Monica Trauzzi: And you mentioned DOE. You've worked closely with DOE in their smart grid program. How do you expect the relationship with DOE to develop with the new administration coming in?
Katherine Hamilton: I imagine, because of the position that the administration has put itself in on a smart grid that that will perhaps become an official program office at DOE. It's not right now. It's just an activity office, but it's robust and we just need to get them some decent funding so they can actually run their smart grid office.
Monica Trauzzi: Final question here. Looking ahead to some of the legislation we might see over the next year including a renewable electricity standard, talk about cap-and-trade legislation, how does a smart grid fit into these different types of programs?
Katherine Hamilton: We want to make sure whatever legislation you look at that there is a smart grid component. So if you do a renewable energy or energy efficiency standard, have some language in it that allows for incentives for a smart grid, maybe not as part of your percentage, but maybe you can account for line losses or create some ability to account for making your grid more efficient. And in a cap-and-trade bill we could see having measured and verified smart grid bonus allowances so that you actually get a special allowance for doing smart grid technology, because we think this is such an enabler for all of the other decarbonizing technologies out there.
Monica Trauzzi: All right, we're going to end it right there. Thanks for coming on the show. That's very interesting.
Katherine Hamilton: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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