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Two days ago, Oncor announced it would apply for approximately $317 million in stimulus funding, including $200 million to lower the cost for the Smart Texas SM advanced meter system initiative; more than $58 million for telecommunications and network investments to support the smart grid initiatives; and more than $58 million to expand its advanced distribution automation program. Other utilities have also indicated, though not yet so explicitly, that they will also be applying for funding.
It is widely expected that the coming days and weeks will bring a rush of such announcements, with almost $4 billion in play. And advanced metering projects, combined with their accompanying telecommunications and network infrastructure projects, will likely be front and center in these application announcements.
Why? For one thing, utilities in many states have either been encouraged or required to install smart meters, and already have them in their long-term plans. Installation can be advanced (and the cost to the consumer will be lower) if stimulus funding can be used to offset the costs.
- Reliability of the electric power system.
- Electric power system costs and peak demand.
- Consumer electricity costs, bills, and environmental impacts.
- Clean energy development and greenhouse gas emissions.
- Economic opportunities for businesses and new jobs for workers."
"Such projects will support the two-way flow of both electric power and information between electric power companies and electricity consumers and will include methods and capabilities addressing interoperability, which is the capability of two or more networks, systems, devices, applications or components to share and readily use information securely and effectively with little or no inconvenience to the user."
Further into the SGIG document, advanced metering projects are even more clearly stipulated, thus: "Project applications in this [Advanced Metering Infrastructure] topic area will be aimed at the installation of smart meters which are able to measure, store, send and receive digital information concerning electricity use, costs, prices and time-of-use between power companies and customers for purposes that include but are not necessarily limited to dynamic pricing, demand response, load management, billing, remote connect/disconnect, outage detection and management, and tamper detection."
According to Frost & Sullivan research analyst Vikas Ravindan, who is studying the smart meter market, the United States is currently driving smart meter growth, with energy legislation being a big driver. Ravindan noted in a company release in early June that Italy has been the most proactive, with about 32.1 million smart meters installed by the end of 2008. The United States and Canada, he says, aren't far behind.
Utilities in many states are pursuing smart meter implementation, including North Carolina, Indiana, California, Colorado, Florida, Ohio, and Texas, among others. And this growth will continue, according to stock expert Tobin Smith, who reported in early May on his ChangeWave website on a series of questions posed in March to 134 respondents working for companies involved in U.S. Electricity/Smart Grid infrastructure projects.
The question was posed: "Which specific Smart Grid technologies do you think will experience the most/least growth in spending over the next 12 months?" Respondents indicated high growth in smart meters and meter infrastructure, with the least growth being anticipated in consumer demand monitoring and management, and in smart protection gear. Additionally, 37 percent of those who responded indicated one of the key barriers to upgrading the U.S. electricity grid was "not enough funding".
Clearly, even billions in stimulus funding, on a 50/50 investment ratio (with the applicant supplying 50 percent and the federal government supplying the remaining 50 percent), will not begin to cover everything the industry needs to accomplish, even in the advanced metering infrastructure department alone. Clearly, there will be many more applications for funding than funding available.
However, even if it isn't the panacea needed to kick-start the smart grid/intelligent utility movement into high gear, it's definitely a much-needed boost to the industry.
