fter years of talking about a needed overhaul of the United States’ electrical infrastructure, the federal government decided to do something about it by awarding US$3.4 billion in smart-grid project grants on Oct. 27.
      Billed as “the largest single energy-grid modernization investment in U.S. history,” the funding under the American Reinvestment and Recovery Act is designed to expedite the country’s transition to a smarter, more robust, more efficient and more reliable electrical system.
      The Electrical Power Research Institute estimates that the implementation of smart-grid advances could reduce electricity usage by more than 4 percent by 2030, resulting in a total cost savings of $20.4 billion for U.S. businesses and residents.
       Corporate site selectors could see an added benefit. Smart-grid modernization could afford industrial end-users the opportunity to upgrade aging plants and even consider establishing new operations in zones of high energy efficiency.       Out of 432 applicants, some 100 private firms, utilities, manufacturers, municipalities and other partners received the Smart Grid Investment Grants from the U.S. Department of Energy in October.
      The grants will be matched by industry funding and result in a total public-private investment of more than $8 billion, creating thousands of jobs in 49 states and the District of Columbia.
      The money will be spent over three years on everything from smarter meters and smarter transformers to automated substations and new sensors that readily detect electrical system disturbances and prevent local problems from cascading into regional power outages.
      Outages currently cost American consumers $150 billion a year, or about $500 for every person in the U.S. The installation of 850 sensors called Phasor Measurement Units, covering 100 percent of the U.S. electrical grid, will provide better monitoring of the system and enable the grid to incorporate large blocks of intermittent renewable energy like wind and solar power.
      Another goal is to reduce peak electricity demand by 1,400 megawatts, saving rate payers more than $1.5 billion in capital costs for new power plants.
      The largest grants went to six companies, each receiving $200 million: Florida Power & Light Co., Baltimore Gas & Electric Co., Duke Energy, Progress Energy, PECO Energy and CenterPoint Energy.
      Todd Arnold, senior vice president of Smart Grid and Customer Systems for Duke Energy in Charlotte, tells Site Selection that winning the grant was the result of a “very competitive process. Primarily, everybody had to work hard. We have been working on smart grid technology for some time, and we are well positioned for the long run.”       The process for Duke began more than three years ago, says Arnold, when the company began formulating plans for the creation of a smart grid in Ohio and Indiana. Those plans included replacing 1.5 million electric meters and 450,000 gas meters in the Midwest, while calling for “a significant amount of distribution automation,” notes Arnold.
      “We have been working on the parts of the plan needed to deploy smart meters on this scale, as well as the information technology needed to deliver this,” says Arnold. “We are talking about needing 15,000 new meters a week for many, many years, so we have been building capabilities to do larger deployments.”
      The company’s grid modernization plans also include the Carolinas, where a drive-by, advanced meter-reading solution was implemented nine years ago.
      “The question today is ‘How do we migrate that system to a smart grid?’ ” says Arnold. “The net goal is to be able to take two-way digital communication and connect Duke Energy to key parts of its grid and meters and remain in contact with our customers. And then, because of that connection, be able to have the data and analysis and control to change how we deliver energy to meet the demands of the future.”
      If that sounds complicated, it’s because it is. “When you look at our grid, the electrification of America is the most marvelous ‘killer app’ that was ever built,” notes Arnold. “It is the engineering marvel of all time.”
      The challenge now is how to take the current system, with all of its intricate pieces and new technologies, and get each component to communicate with the rest of the network.
      That challenge has become even more complicated as renewable energy systems and electric vehicles — and their corresponding demand on the grid — are added to the mix of concerns that must be addressed by the nation’s utilities.
      “When you look at our energy future and the need to reduce carbon, and the ability to accommodate plug-in hybrids, and as you start to give customers more options and then integrate that with commercial and home energy management systems, that speaks to what will be required in the future,” Arnold says.
      “We have to build and connect an energy ‘Internet’ that overlays our wire-delivery Internet,” he adds. “The end game for us, when you look at the possible transformation of energy in the 21st century, will be a series of changes that are continuous. The smart grid is analogous to the Internet; it is never finished and it will never be complete.”
      For plant managers, the benefits could be substantial, the Duke executive says. “As a facility manager, you could get a daily e-mail that tells you how much energy you have consumed that day. The managers could proactively go online and check their energy usage in real time,” Arnold says. “This will eventually lead to how the utility provides real-time pricing signals to its customers.”
      In fact, notes Arnold, “how we engage the customer is critical. It involves information and education.”       An informed customer could also lead to new patterns of site selection decision-making. Areas that have smarter grids will provide more reliable power, higher quality power and a more stable environment for rate predictability.
      An analysis of the Department of Energy’s smart grid grants reveals that the biggest winners are utilities in Florida, Maryland, Indiana, Ohio, the Carolinas, Pennsylvania and Texas. The next highest awards went to utilities in Georgia, Alabama, Mississippi, Nevada, Michigan, Oklahoma, California and Tennessee.
      In other words, customers in high-density markets with large industrial bases will be the beneficiaries of the bulk of smart-grid improvements.
      Wes McDowell, vice president and chief information officer for the Georgia region of Southern Company, says that every customer of his utility will benefit from the $165-million grant, which the company will match. The smart grid enhancements will be spread across the firm’s service territory that spans Alabama, Florida, Georgia and Mississippi.
      The total program cost of $330 million will be spent on five key areas: energy efficiency, fault locating, distribution automation, transmission line automation and smart substations.
      “A smart grid increases the reliability of power and it increases the efficiency of the grid, which benefits every customer,” says McDowell, an Atlanta-based executive who handled Southern Company’s grant application to DOE. “The investment into new technology will enable us to have more contained outages through a self-healing network. We can isolate faults and confine them to smaller areas. We will know more about each fault and know exactly where it is, making the restoration time shorter.”
      McDowell adds that end-users will also benefit from improved power quality. “Voltage management will be a big benefit for high-end industrial customers,” he notes. “This is critical for data centers, semiconductor plants, plastics and fusion plants.
      “This is very positive news for Southern Company and all of our customers, because it only adds to the reliability and efficiency of the grid.”