The Smart Grid/Enernet Initiative: The First Great Infrastructure Project of the 21st Century

by David Fessler, Energy and Infrastructure Expert
Monday, January 25, 2010: Issue #1182

You don’t have to look around too much to find the latest buzz on renewable energy sources and the companies behind them. Since oil prices began rising and the movement toward a cleaner, greener world has gathered pace, they’ve become all the rage.

But it’s important to note that no matter how much momentum the sector builds up, the lack of one key thing could steer this “groundswell of green” into a brick wall.

It’s called the Smart Grid – or, as it’s increasingly being referred to, the “Enernet.” And without it, renewable energy won’t be going anywhere.

That’s why I headed to rural Maryland last week to attend a major conference aimed at tackling the latest renewable energy issues and better harnessing the promising opportunities that the sector has – for America, consumers and investors…

The Future of U.S. Energy Security

Sponsored by the Institute of Electrical and Electronics Engineers (IEEE), which boasts 365,000 members in over 150 countries, the Conference on Innovative Smart Grid Technologies brought together about 700 of the world’s top engineers and scientists from 32 different countries.

It was the first meeting of its kind, held at the secure headquarters of the National Institute of Standards and Technology (NIST) on nearly 600 secluded acres in Gaithersburg, Maryland.

NIST is the keeper of the world’s most accurate time standard. NIST-F1 is a cesium fountain atomic clock, accurate to 1 second in 60 million years. But I wasn’t holed up in Gaithersburg just so I could synchronize my watch.

With its $1.6 billion dollar annual budget, NIST fosters ingenuity and industrial competitiveness by promoting technology, science and standards. Thus, the location was perfect for this meeting.

With regard to the Smart Grid/”Enernet,” NIST is essentially “Clearinghouse Central” for how it’s all going to work. Hundreds of standards – many still under development – will allow the Smart Grid to work as a highly functional system, just like our telecommunications system does today.

The Director of NIST, Dr. Patrick Gallagher, set the tone for the conference:

“The Smart Grid is one of the most important focus areas we have at NIST. The future of U.S. energy security is at stake.

“Smart Grid technologies are essential to enabling the diverse energy supplies we will need in the future.

“It’s [not only] important for NIST, but for the entire community of Smart Grid stakeholders, and for the nation. Just as Congress intended, we’re building a foundation for sustainable growth and future prosperity.”

While at the conference, I had the opportunity to talk with a number of key individuals regarding the Smart Grid. People responsible for designing the framework and setting the standards for it. And they don’t come much more important than this gentleman…

Why This Initiative Will Change the Way We View – And Use – Energy

Aside from the presentations, I managed to grab a few words with Dr. George Arnold – the man chosen by Dr. Gallagher to head up NIST’s Smart Grid initiative:

David Fessler: Dr. Arnold, can you start by telling me a little more about NIST’s role in the development of the Smart Grid standards here in the United States – and why it’s so important?

Dr. Arnold: The Energy Independence and Security Act of 2007 (EISA) has the development of the Smart Grid as a national policy goal. It appointed NIST and gave us the primary responsibility to coordinate standards development. The ultimate goal is to achieve inter-operability of Smart Grid devices and systems across the country.

David Fessler: You mentioned in your opening remarks yesterday that 30 years from now, the Smart Grid will be viewed as the “first great infrastructure project of the 21st century.” How so?

Dr. Arnold: The Smart Grid will fundamentally change how energy is priced, and how we think about and use energy, both at work and at home, and even while we’re driving.

Electricity movement will be more of a dynamic two-way flow as opposed to the static one-way flow we are used to today.

There are currently 130 major Smart Grid projects underway in 45 states. Over 18 million Smart Meters will be installed over the next few years in the United States alone. And that’s just a small part of what the Smart Grid will be.

David Fessler: NIST just announced the release of Version 1.0 of the “Framework and Roadmap for Smart Grid Interoperability Standards.” Can you explain this in layman’s terms?

Dr. Arnold: National and international standards are a critical enabler for the Smart Grid. Without them, you’d have essentially what we have today: 3,100 electric utilities operating alone.

Version 1.0 is the first release of a Smart Grid inter-operability framework, and it contains a roadmap for its further development.

David Fessler: What do you see as the biggest challenge in rolling out the Smart Grid here in the United States?

Dr. Arnold: An educated consumer. In the end, it’s the consumer who’s going to have to pay for the Smart Grid. Unless they see the benefits, they’re not going to spend money on it, or things to connect to it.

In Part 2 of my report from this crucial Smart Grid conference later this week, I’ll bring you my discussions with two more top industry executives, who’ll share their thoughts on exactly how the Smart Grid should be set up… how consumers stand to benefit from it… and why this important sector is set up for investors to profit.

Good investing,

David Fessler

P.S: Speaking of energy and electricity, if you haven’t had a chance to check out this new report yet, I encourage you to take a few moments to do so. It details a new “green power plant,” known as the Fredonia Reactor, which is 62 times more powerful than a traditional nuclear reactor and runs on what the International Energy Agency calls “the most advanced of the ‘new’ renewable energy technologies.”

Not only that, the Department of Energy states that this resource “could supply one-fifth of all electricity in the country.” Get all the details here.