Smart grid in the United States

Support for the smart grid in the United States became federal policy with passage of the Energy Independence and Security Act of 2007.^[1] The law set out $100 million in funding per fiscal year from 2008–2012, established a matching program to states, utilities and consumers to build smart grid capabilities, and created a Grid Modernization Commission to assess the benefits of demand response and to recommend needed protocol standards.^[2] The law also directed the National Institute of Standards and Technology to develop smart grid standards, which the Federal Energy Regulatory Commission (FERC) would then promulgate through official rulemakings.^[3]

Smart grids received further support with the passage of the American Recovery and Reinvestment Act of 2009, which set aside $4.5 billion of funding for Smart Grid development, deployment, and worker training.^[4]

Policy related to smart grids

The Federal Energy Regulatory Commission (FERC) issued a proposed policy statement and action plan on March 19, 2009 for standards governing the development of a smart grid, leading to a final rule issued July 16, 2009.^[5] However, FERC notes that the electric industry is already moving ahead with smart grid technologies, so it is proposing to establish some general principles that the smart grid standards should follow. FERC is also looking at the growth in clean energy, so the commission wants to be sure that smart grids will better accommodate renewable energy resources, demand response systems, energy storage systems, and electric vehicles. For electric vehicles, FERC at least wants the smart grid to allow charging during times of low power demand, but ideally the commission would like the smart grid to accommodate vehicle-to-grid technologies, which would use the nation's electric vehicles as a vast, distributed, energy storage system.^[3]

The Department of Energy (DOE) issued a Notice of Intent and a draft Funding Opportunity Announcement (FOA) that will lay the groundwork for providing nearly $4 billion in American Reinvestment and Recovery Act funds to support smart grid projects. The Notice of Intent was issued for DOE's Smart Grid Investment Grant Program, which will provide grants of $500,000 to $20 million for smart grid technology deployments and grants of $100,000 to $5 million for the deployment of grid monitoring devices. The program will provide matching grants of up to 50% of the project cost, and the total funding for the program is $3.375 billion. In addition, the draft FOA paves the way toward an offer of $615 million to support demonstrations of regional smart grids, utility-scale energy storage systems, and grid monitoring devices.

In May 2009, Commerce Secretary Gary Locke announced that he will co-chair a smart grid meeting with Secretary of Energy Steven Chu in Washington, D.C. The meeting was to bring together industry and government leaders to begin a critical discussion about developing industry-wide standards for smart grid technologies. Industry leaders at this meeting were expected to pledge to harmonize industry standards and to commit to a timetable to reach a standards agreement. ^[6]

President Barack Obama announced the largest single electric grid modernization investment in U.S. history on Oct. 27, 2009, with DOE tapping $3.4 billion in American Reinvestment and Recovery Act funds for 100 projects. The funds will be matched by $4.7 billion in private investments. According to the president, the smart grid projects will help build a renewable energy superhighway, with a goal of increasing energy efficiency and helping to spur the growth of renewable energy resources such as wind and solar power. The grants range from $400,000 to $200 million and will reach every state except Alaska.

Much of the funding will support upgrades to the utility power grids, including the installation of more than 200,000 smart transformers, which will make it possible for power companies to replace units before they fail. Utilities will also install more than 850 sensors that will cover all of the electric grid in the contiguous United States, making it possible for grid operators to better monitor grid conditions and allowing them to take advantage of intermittent renewable energy, such as wind and solar power. Utilities will install nearly 700 automated substations, which will make it possible for power companies to respond faster and more effectively to restore service when bad weather knocks down power lines or causes electricity disruptions.^[7][8]

Consumer access

The smart grid grants will pay for installing more than 2.5 million smart meters, which allow utility customers to access dynamic pricing information and avoid periods of peak electricity use, when power is most expensive. The grants will also support the installation of other smart grid components, including more than 1 million in-home energy displays, 170,000 smart thermostats, and 175,000 other load control devices to enable consumers to reduce their energy use. The funding will help expand the market for smart washers, dryers, and dishwashers, so that U.S. residents can further control their energy use and lower their electricity bills. Such smart grid technologies can also better accommodate the use of plug-in electric vehicles and the production of renewable energy from customer-owned systems, such as solar power systems or wind turbines.

Research of smart grid technologies

In September 2008, the National Science Foundation established the FREEDM Systems Center, an Engineering Research Center to develop future smart grid technologies that will enable plug-and-play integrations of distributed generations and distributed storages. At the heart of the center's technology development is the use of wide bandgap power electronics technology to control and protect the power grid.

On July 20, 2009, USDOE awarded $47 million in American Recovery and Reinvestment Act funds on July 20 to eight ongoing smart grid demonstration projects. The $47 million investment will add to the $17 million in funds DOE had awarded these eight projects in 2008, thereby accelerating the timelines for the projects. Most of the projects relate to technologies to help transmission and distribution systems operate better, but a few are directly related to renewable energy. For example, the city of Fort Collins, Colorado, will research, develop, and demonstrate a coordinated and integrated system of mixed clean energy technologies and distributed energy resources, allowing the city to reduce its peak electrical demand by at least 15%. Meanwhile, the Illinois Institute of Technology in Chicago will focus on implementing distributed energy resources and creating demand-responsive microgrids, which are small power networks that can operate independently of the utility power grid. In addition, the University of Hawaii will explore the management of its electrical distribution system to better accommodate wind power.^[9]

References