Cap-and-trade legislation failed earlier this year, taking any meaningful energy reform down with it for now. But one emerging bright spot on the nation’s energy landscape is the development of "smart grid" technology. The complex system allows utilities to communicate with consumers and vice versa to monitor power use during peak times and even allow people with solar panels or electric vehicles to sell power back to the grid at a profit.
A government estimate last year found that the technology could help homeowners reduce their power usage by 20 percent. But several hurdles remain. A lack of industry collaboration has produced several disjointed versions of the same operating software. And government regulation has, at times, moved quicker than industry growth. At the Grid Week annual conference in Washington, D.C., U.S. Secretary of Commerce Gary Locke discussed smart grid deployment with NEWSWEEK’s Daniel Stone. Excerpts:
What’s the most substantial impact smart grid tech can have on the economy?
It’s going to be the invention, the production of products that will be used in our appliances as well as our homes, and the software that will be developed. People can control from their computer at work when their appliances will go on and off. Or they can say, "Hey, I want to sell electricity back from my vehicle when the cost is highest for that electricity, but don’t turn on my electric clothes dryer until the electricity charged by my utility [is] lowest."
So it saves money. What about creating jobs?
The job creation is the development of those products. The software engineers who will be developing the software that they’ll sell to consumers that you can put into your home computer and operate these systems. It’ll be the technology and devices that will enable the device to put electricity back into the grid. Those are just the components. There will be wiring in your homes. That’s work for electricians. All of these new items will have to be designed, engineered, and ultimately produced.
You’ve called a smart grid the “indispensible heart” of the energy system. If that’s the case, what’s taking so long?
Right now, we’re developing the standards. In my home state of Washington, they’re developing smart meters. It enables utilities to give you the ability to go on your computer and look at your electricity usage by time of day. That was a major tool in reducing the cost of energy.
The cost seems prohibitive.
No, it’s not the cost that’s prohibitive. It’s the lack of devices. Not all utilities have smart meters. That’s why, with the billions of dollars we have in the Recovery Act, a lot of it is going to help pay for smart meters. Those smart meters are then made, manufactured in the United States, and then you hire people to switch out the old analog meter on the side of your house with the smart meter. That’s part of [the] slowness. Ultimately it’ll be saving people money because they’ll have more choices on how they can use electricity. It’ll also enable utilities to have different pricing to reward people for using electricity in off-peak hours.
Are other countries ahead of the U.S. on this?
A lot of countries are developing smart grid[s] and have smart meters. France and Germany are working aggressively on smart grid[s]. The problem is that each country is developing its own standard for a smart grid, so the products that you make–like the software they put on their machines–may not be compatible with the hardware in the United States. If I’m a company and I’m making this in the United States and I want to sell it in Germany, if I have to manufacture a totally different system using different standards for Germany and then if I have to do another separate one for India or Brazil, I may not even do it. That deprives me of revenue and job creation.
During a year when the energy bill died in the Senate and we’ve heard little from President Obama on new technology, how committed is the government to this technology?
We’ve been moving aggressively. The private-sector folks need to reach consensus. If they don’t reach consensus, we’ll step in and resolve policy disputes. Our motto is that we’re going to be moving fast until the private sector says, "Slow down, you’re moving too fast." On a couple occasions, they said we were moving too fast, they wanted more time to deliberate. The whole notion is we need to get these standards out there. As soon as we get those standards, we’ll see the unleashing of technology and innovation in the United States.