Discovery Guides Areas


Plugging Into the Future: Smart Grids
(Released November 2009)

podcast link 
  by Marianne Stanczak  


Key Citations






But considering that far from everyone in the nation is equipped with their own smart meter, let alone a PHEV or wind farm, who's going to pay for all this??

One of the major sources of funding is expected to be the government. The 2009 American Recovery and Reinvestment Act calls for $4.5 billion for advanced electric grid technology. President Obama hopes to have 40 million smart meters installed in homes. The Department of Energy (DOE) is spearheading the Smart Grid Investment Grant Program which will award funds in September 2010 to companies able to help move along the process of setting up a smart grid. These can include the manufacture of specific electronic devices, or work by electric utilities to coordinate the smart grid's installation. In addition to government funding, many venture capital firms and even companies like Cisco, GE, Honeywell and IBM are all "chipping in" to make the smart grid a reality. Smart grid advocates are hoping to create an estimated 280,000 new jobs, ranging from electrical engineers to bureaucrats to installers, and everything in between.

Federal energy regulators want a transmission grid that can handle clean energy needs
Photo: Warren Gretz, NREL
As utopian as happy consumers, happy power companies, a cleaner environment, and a big dent out of the unemployment rate sound, the fact is that a national smart grid is still basically a concept, an idea. There is, however, local smart grid technology already in place. One example is Smart Grid City, otherwise known as Boulder, Colorado, where over 40,000 houses have smart meters and other smart grid technology. The utility Xcel Energy is spearheading this pilot test. Since its inception in mid-2008, there has been a drastic reduction in transformer failures, voltage problems, and even customer complaints due to the equipment utilized, particularly the sensors used for event avoidance. Boulder proves that the smart grid could work on a much broader scale.

In addition to several other test cities in the U.S., Malta, in the Mediterranean, is prepping to become the first smart grid island. IBM hopes to complete the installation of 250,000 smart meters there by 2012.

Every great idea has its pitfalls (or potential pitfalls, as the case may be). And the smart grid is no exception. With every pro someone has kindly thought of a con to keep people on their toes. The biggest obstacle to getting the smart grid powered up is cost. One estimate is that "the testing and installation of such a system for the entire US would cost about $3 billion a year for 10 years."

Another concern is how accessible such a system might be to potential hackers. It is believed that a hacker can, with very little money and resources, access the data from a smart meter, and possibly break into the smart grid network as a whole. Because the smart grid is proposed to be working with software, sophisticated electronics and the internet, most of the cybersecurity issues arising from their use would also come into play with the smart grid. Suggestions to set up computer systems similar to those used by banks or government agencies have been made, but at the time of this writing, there are no definite solutions or even set cybersecurity standards.

Another likely pitfall is that despite the benefits to the utility companies, they may not comprehend how such an energy efficient device could also make them money. The smart grid is presented to consumers as saving money and using (read as: buying) less electricity, so utilities are hesitant to get onboard.

As new smart meters are being added daily to neighborhoods across the country, it seems that we are getting closer to a nationwide smart grid. Factor in government stimulus funding and the consumer desire to save money and energy, and it would appear that the smart grid is a "done deal". However, the benefits of any venture must outweigh the risks. Will the stimulus money and venture capitalists provide enough? How will cyber threats be thwarted? And although smart meter applications are working in places like Boulder, Colorado, how will they manage on a nationwide scale? And arguably most importantly, if the smart grid is to become a reality in the United States, will it be completed before another widespread blackout occurs?

© 2009, ProQuest LLC. All rights reserved.

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  1. The Economist, "Building the Smart Grid," June 42009, pp.15-17

  2. Ibid.