U.S. pumps another $620M into smart grid projects

SAN JOSE, Calif. — The U.S. government has announced a second and final round of economic stimulus grants aimed at accelerating the transition to a smart electric grid. Boeing and two up-and-coming battery makers were among the winners of a total of $620 million in grants from the Department of Energy to 32 projects mainly organized by electric utilities. A requirement for matching funds brought in a total of $1.6 billion to be invested in smart grids. In a first round of grants, 100 organizations were selected in late October to share $3.4 billion in federal funds to accelerate deployment of smart electric grids. Those programs included a wide range of projects spanning 49 states. Altogether, observers estimate about $8 billion in public and private funds have now been committed to smart grid projects. That's about five percent of what will be needed to transition the U.S. grid to a digital power network. "These demonstration projects will further our knowledge and understanding of what works best and delivers the best results for the smart grid, setting the course for a modern grid that is critical to achieving our energy goals," said Steven Chu, secretary of the Department of Energy, in a prepared statement. The Electric Power Research Institute estimates that implementing a smart grid could reduce electricity use by more than four percent by 2030, a savings of $20.4 billion annually. "We're looking forward to the data these projects get about what really works and where the gaps are," said Katherine Hamilton, president of the GridWise Alliance, an ad hoc coalition of organizations promoting the smart grid. The funding awards were divided into two topic areas. Sixteen awards totaling $435 million will support end-to-end smart grid demonstrations in 21 states. Another 16 awards for a total of $185 million will help fund utility-scale energy storage projects that support renewable sources such as solar and wind. The largest award was an $88.8 million grant that will fund a demonstration system spanning five states in the Pacific Northwest. It will serve 60,000 customers and provide two-way communications between distributed power generators, storage units and substations. The group had already announced details of its proposal which includes partnerships with vendors such as 3Tier Inc., Areva USA, IBM, Netezza Corp., and a team of QualityLogic, Inc. and the Drummond Group, Inc. An Ohio utility won the second largest grant, a $75 million award. It will serve 110,000 users and use 13 different technologies from the substation to the consumer, including distribution automation. Boeing was one of the few smart grid vendors to directly win an award. The avionics giant snagged $8.5 million for a demonstration system that will use its security software for power transmission systems at utilities that serve 21 states. Awards in the energy storage area spanned a broad range of battery, flywheel, compressed air and other technologies in a field that is still considered wide open. The diversity of awards is "really good because this area will be a game changer and we don't have a silver bullet for it," said Hamilton. Southern California Edison won a $25 million grant to deploy and evaluate an 8 MegaWatt lithium-ion battery technology as a back up for a wind generation system. The utility said the project will evaluate a range of applications for lithium-ion batteries that could spur broader demand for the technology by bolstering production to a level that could make lithium ion batteries more affordable for use by utilities. Two smaller projects are tapping battery startups for so-called micro-grid projects. Startup Seeo Inc. (Berkeley, Calif.) won a $6 million grant to develop and deploy its 25 kiloWattHour solid state lithium ion technology. The startup's chief executive, Atiq Raza, is a former president of Advanced Micro Devices, and the company has been funded by Khosla Ventures. Separately, Detroit Edison won a $5 million grant to deploy lithium ion batteries from A123 Systems (Watertown, Mass.). The project will use 20 25kW batteries to create a MegaWatt storage unit for a micro-grid, backing up a solar energy generator. A123 recently made a successful public offering, spurring investors to say the window is open for technology startups to go public. In addition, Pacific Gas and Electric won a $25 million grant to explore use of compressed air for energy storage in Bakersfield, California. Beacon Power got a $24 million grant to install a flywheel as a storage device near Chicago.