$3.4 billion in grants to be announced for smart grid

We waste a significant amount of electricity due to an outdated and inefficient electric grid in the United States. Thus, this investment is significant.

President Barack Obama on Tuesday will announce $3.4 billion in government grants to help build a “smart” electric grid that will save consumers money on their utility bills, reduce blackouts and carry power supplies generated by solar and wind energy, the White House said.

It marks the largest award made in a single day from the $787 billion stimulus package approved by Congress, and will create tens of thousands of jobs while upgrading the U.S. electric grid, according to administration officials.

The grants, which range from $400,000 to $200 million, will go to 100 companies, utilities, manufacturers, cities and other partners in 49 states.

This investment is only the first step, and part of the criteria here was the speed with which companies could implement the changes, as this money comes from the stimulus package. For example, the grants will not be used to build new power lines, but improve the capabilities of the electrical system. The funds will be used for a variety of projects, including approximately “18 million smart meters that will help consumers manage energy use in their homes, 700 automated substations to make it faster for utilities to restore power knocked out by storms and 200,000 smart transformers that allow power companies to replace units before they fail, thus avoiding outages.” Companies had to bid and compete for the funds, and the winning companies secured an additional $4.7 billion in private money to match their government grants, resulting in a total of $8.1 billion in total investment in the smart grid.

The smart meters are critical, as they encourage consumers to use electricity more efficiently. If you can see on your meter that running the dishwasher costs you more during the day, you will consider running it at night instead when rates are cheaper. If you’re costs are spiking during the day, you might realize that you can open the windows instead of running the air conditioner.

John Kerry and Lindsey Graham offer bi-partisan proposal on climate legislation

Democrat John Kerry and Republican Lindsey Graham don’t agree on much. The above photo from FOX News Sunday shows the two Senators sparring in the fall of 2008.

The two Senators, however, have teamed up to write a compelling Op-Ed in today’s New York Times in which they argue for a bi-partisan approach to addressing climate change legislation. This is a must-read for anyone who cares about this issue, and it could offer some real momentum for an issue that many believe will be stalled in the Senate.

If Lindsey Graham is on board, one would think that he could bring along more Republicans. One reason Graham is on board, and there’s hope to bring along more Republicans, is the emphasis on using nuclear power as one of the options. The left needs to become pragmatic over nuclear power, and realize that it offers the key to obtaining broad support.

Kerry and Graham also signal that a compromise is needed on domestic drilling. The clean energy revolution will not happen over-night, and if we need to rely in the short term on some fossil fuels, it’s better for the U.S. economy to use more domestic oil. We certainly shouldn’t subsidize it, but in the context of a carbon tax or cap-and-trade, permitting more domestic production makes tons of sense, particularly given the current economic crisis.

Hopefully, this can be the starting point for a grand bargain on energy.

Natural gas vs solar

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Read this article about the battle between natural gas and solar power in Colorado and you’ll get a great idea of the complexity surrounding the clean energy issue. Over time, this stuff will get sorted out, and the subsidies for clean energy clearly have a positive impact. That said, there’s legitimate concern that all the competing interests will create a nightmare set of regulations once Congress gets through with the new climate bill.

This presents another compelling case for a simple carbon tax over cap-and-trade legislation.

George Soros will invest $1 billion in clean energy

George Soros is getting serious about climate change.

Billionaire George Soros, looking to address the “political problem” of climate change, said he will invest $1 billion in clean-energy technology and create an organization to advise policy makers on environmental issues.

Soros, the founder of hedge fund Soros Fund Management LLC, announced the investment in Copenhagen yesterday at a meeting on climate change sponsored by Project Syndicate. The group is an international association made up of 430 newspapers from 150 countries.

“I want to apply rather stringent criteria to the investments,” said Soros in an e-mailed message. “They should be profitable but should also actually make a contribution to solving the problem.”

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Soros has said he prefers a greenhouse-gas tax because carbon emission-trading systems, which are used in Europe, can be manipulated by investors.

It will be interesting to see if the advocacy by Soros helps to tip the debate in the U.S. towards a carbon tax as opposed to cap-and-trade.

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