Obama Announces $3.4 Billion Investment to Spur Transition to Smart Energy Grid

Speaking at Florida Power and Light’s (FPL) DeSoto Next Generation Solar Energy Center, President Barack Obama today announced the largest single energy grid modernization investment in U.S. history, funding a broad range of technologies that will spur the nation’s transition to a smarter, stronger, more efficient and reliable electric system. The end result will promote energy-saving choices for consumers, increase efficiency, and foster the growth of renewable energy sources like wind and solar.

The $3.4 billion in grant awards are part of the American Reinvestment and Recovery Act, and will be matched by industry funding for a total public-private investment worth over $8 billion. Applicants state that the projects will create tens of thousands of jobs, and consumers in 49 states will benefit from these investments in a stronger, more reliable grid.

An analysis by the Electric Power Research Institute estimates that the implementation of smart grid technologies could reduce electricity use by more than 4 percent by 2030. That would mean a savings of $20.4 billion for businesses and consumers around the country, and $1.6 billion for Florida alone — or $56 in utility savings for every man, woman and child in Florida.

One-hundred private companies, utilities, manufacturers, cities and other partners received the Smart Grid Investment Grant awards today, including FPL, which will use its $200 million in funding to install over 2.5 million smart meters and other technologies that will cut energy costs for its customers. In the coming days, Cabinet Members and Administration officials will fan out to awardee sites across the country to discuss how this investment will create jobs, improve the reliability and efficiency of the electrical grid, and help bring clean energy sources from high-production states to those with less renewable generating capacity. The awards announced today represent the largest group of Recovery Act awards ever made in a single day and the largest batch of Recovery Act clean energy grant awards to-date.

Today’s announcement includes:

* Empowering Consumers to Save Energy and Cut Utility Bills — $1 billion. These investments will create the infrastructure and expand access to smart meters and customer systems so that consumers will be able to access dynamic pricing information and have the ability to save money by programming smart appliances and equipment to run when rates are lowest. This will help reduce energy bills for everyone by helping drive down “peak demand” and limiting the need for “stand-by” power plants – the most expensive power generation there is.
* Making Electricity Distribution and Transmission More Efficient — $400 million. The Administration is funding several grid modernization projects across the country that will significantly reduce the amount of power that is wasted from the time it is produced at a power plant to the time it gets to your house. By deploying digital monitoring devices and increasing grid automation, these awards will increase the efficiency, reliability and security of the system, and will help link up renewable energy resources with the electric grid. This will make it easier for a wind farm in Montana to instantaneously pick up the slack when the wind stops blowing in Missouri or a cloud rolls over a solar array in Arizona.
* Integrating and Crosscutting Across Different “Smart” Components of a Smart Grid — $2 billion. Much like electronic banking, the Smart Grid is not the sum total of its components but how those components work together. The Administration is funding a range of projects that will incorporate these various components into one system or cut across various project areas – including smart meters, smart thermostats and appliances, syncrophasors, automated substations, plug in hybrid electric vehicles, renewable energy sources, etc.
* Building a Smart Grid Manufacturing Industry — $25 million. These investments will help expand our manufacturing base of companies that can produce the smart meters, smart appliances, synchrophasors, smart transformers, and other components for smart grid systems in the United States and around the world – representing a significant and growing export opportunity for our country and new jobs for American workers.

The combined effect of the investments announced today, when the projects are fully implemented, will:

* Create tens of thousands of jobs across the country. These jobs include high paying career opportunities for smart meter manufacturing workers; engineering technicians, electricians and equipment installers; IT system designers and cyber security specialists; data entry clerks and database administrators; business and power system analysts; and others.
* Leverage more than $4.7 billion in private investment to match the federal investment.
* Make the grid more reliable, reducing power outages that cost American consumers $150 billion a year — about $500 for every man, woman and child in the United States.
* Install more than 850 sensors – called ‘Phasor Measurement Units’ – that will cover 100 percent of the U.S. electric grid and make it possible for grid operators to better monitor grid conditions and prevent minor disturbances in the electrical system from cascading into local or regional power outages or blackouts. This monitoring ability will also help the grid to incorporate large blocks of intermittent renewable energy, like wind and solar power, to take advantage of clean energy resources when they are available and make adjustments when they’re not.
* Install more than 200,000 smart transformers that will make it possible for power companies to replace units before they fail thus saving money and reducing power outages.
* Install almost 700 automated substations, representing about 5 percent of the nation’s total that will make it possible for power companies to respond faster and more effectively to restore service when bad weather knocks down power lines or causes electricity disruptions.
* Power companies today typically do not know there has been a power outage until a customer calls to report it. With these smart grid devices, power companies will have the tools they need for better outage prevention and faster response to make repairs when outages do occur.
* Empower consumers to cut their electricity bills. The Recovery Act combined with private investment will put us on pace to deploy more than 40 million smart meters in American homes and businesses over the next few years that will help consumers cut their utility bills.
* Install more than 1 million in-home displays, 170,000 smart thermostats, and 175,000 other load control devices to enable consumers to reduce their energy use. Funding will also help expand the market for smart washers, dryers, and dishwashers, so that American consumers can further control their energy use and lower their electricity bills.
* Put us on a path to get 20 percent or more of our energy from renewable sources by 2020.
* Reduce peak electricity demand by more than 1400 MW, which is the equivalent of several larger power plants and can save ratepayers more than $1.5 billion in capital costs and help lower utility bills. Since peak electricity is the most expensive energy – and requires the use of standby power generation plants – the economic and environmental savings for even a small reduction are significant. In fact, some of the power plants for meeting peak demand operate for only a few hundred hours a year, which means the power they generate can be 5-10 times more expensive than the average price per kilowatt hour paid by most consumers.

Obama’s Speech on Smart Grid Technology
By Barack Obama

THE PRESIDENT: Thank you, guys. Thank you very much. Please, have a seat. Thank you so much.

Well, first of all, let me thank Lew Hay and his visionary leadership at Florida Power & Light. It’s an example of a company that is doing well by doing good. And I think it’s a model for what we could duplicate all across the country.

To Greg Bove, who just gave me the tour and was a construction manager for this facility, congratulations. We’ve got a couple of special guests here: Representative Kathy Castor from Tampa, a great friend. (Applause.) Arcadia Mayor Dr. Roosevelt Johnson. (Applause.) And State Representative Keith Fitzgerald from Sarasota. (Applause.)

And I want to once again thank Lew for the generous introduction. I want to congratulate you and all the workers who are involved in this outstanding facility for Florida Power & Light.

It’s an honor to be here on a very big day not just for Arcadia but for the cause of clean energy in America. With the flip of a switch, FP&L will — has moved the solar panels behind me into a position where they can catch the sun’s rays. And now, for the very first time, a large-scale solar power plant — the largest of its kind in the entire nation — will deliver electricity produced by the sun to the citizens of the Sunshine State. And I think it’s about time.(Applause.)

This plant will produce enough power to serve the entire city of Arcadia. Its construction was a boost to your local economy, creating nearly 400 jobs in this area. And over the next three decades, the clean energy from this plant will save 575,000 tons of greenhouse gas emissions, which is the equivalent of removing more than 4,500 cars from the road each year for the life of the project. Think about that, 45,000 [sic] cars from the road each year for the life of the project.

And yet, to realize the full potential of this plant and others like it, we’ve got to do more than just add extra solar megawatts to our electrical grid. That’s because this grid — which is made up of everything from power lines to generators to the meters in your home — still runs on century-old technology. It wastes too much energy, it costs us too much money, and it’s too susceptible to outages and blackouts.

To offer one analogy, just imagine what transportation was like in this country back in the 1920s and 1930s before the Interstate Highway System was built. It was a tangled maze of poorly maintained back roads that were rarely the fastest or the most efficient way to get from point A to point B. Fortunately, President Eisenhower made an investment that revolutionized the way we travel — an investment that made our lives easier and our economy grow.

Now, it’s time to make the same kind of investment in the way our energy travels — to build a clean energy superhighway that can take the renewable power generated in places like DeSoto and deliver it directly to the American people in the most affordable and efficient way possible. Such an investment won’t just create new pathways for energy — it’s expected to create tens of thousands of new jobs all across America in areas ranging from manufacturing and construction to IT and the installation of new equipment in homes and in businesses. It’s expected to save consumers more than $20 billion over the next decade on their utility bills. And I know nobody minds seeing their utility bills cut. I’m sorry, Lew, but they really don’t mind that. (Laughter.) It will make our grid more secure and more reliable, saving us some of the $150 billion we lose each year during power outages. It will allow us to more effectively transport renewable energy generated in remote places to large population centers, so that a wind farm in rural South Dakota can power homes in Chicago. And by facilitating the creation of a clean energy economy, building this 21st century energy infrastructure will help us lay a foundation for lasting growth and prosperity.

So that’s why today, I’m pleased to announce that under the Recovery Act, we are making the largest-ever investment in a smarter, stronger, and more secure electric grid. This investment will come in the form of 100 grants totaling $3.4 billion — grants that will go to private companies, utilities, cities, and other partners who have applied with plans to install smart grid technologies in their area.

And throughout this week, the members of my Cabinet are going to be fanning across the country talking about some of the winning projects. Some of the projects involve modernizing old, inefficient transmission lines that just waste too much energy. And to speed that process along, nine federal agencies have signed an agreement that will help break down the bureaucratic barriers that currently make it slow and costly to build new transmission lines on federal lands.

But most of the projects that are receiving grants involve the installation of what are known as smart meters — devices that will have a direct benefit for consumers who want to save money on their electric bills. For example, even as Florida Power & Light is bringing this solar plant online today, it also is deploying hundreds of thousands of these smart meters in people’s homes throughout Florida. Much like the Recovery through Retrofit plan we launched last week to boost the weatherization and retrofit industry, these devices will help you greatly improve the energy efficiency in your own home.

Now, let me explain what’s going on with these smart meters. Smart meters will allow you to actually monitor how much energy your family is using by the month, by the week, by the day, or even by the hour. So coupled with other technologies, this is going to help you manage your electricity use and your budget at the same time, allowing you to conserve electricity during times when prices are highest, like hot summer days. Through these investments in a variety of smart grid technologies, utilities like Florida Power & Light will also be able to monitor the performance of its electricity grid in real time, which means they’ll be able to identify and correct service interruptions more quickly and effectively. And all this information will help increase renewable energy generation, provide support for plug-in electric vehicles, and reduce the carbon pollution that causes climate change.

Here in this region of Florida, this project will reduce demand for electricity by up to 20 percent during the hottest summer days that stress the grid and power plants. It will provide smart meters to 2.6 million more customers. And most importantly, it will create thousands of jobs — good jobs, by the way, that can’t be outsourced; jobs that will last and jobs that pay a decent wage.

On their own, the opening of this new solar plant or the installation of new smart meters or the investment in grid modernization will not be enough to meet the challenges posed by our dependence on fossil fuels. But together, we can begin to see what a clean energy future will look like. We can imagine the day when you’ll be able to charge the battery on your plug-in hybrid car at night, because your smart meter reminded you that nighttime electricity is cheapest. In the daytime, when the sun is at its strongest, solar panels like these and electricity stored in car batteries will be able to power the grid with affordable, emission-free energy. The stronger, more efficient grid would be able to transport power generated at dams and wind turbines from the smallest towns to the biggest cities. And above all, we can see all this work that would be created for millions of Americans who need it and who want it, here in Florida and all across the country.

So we’re on the cusp of this new energy future. In fact, a lot of it is already taking place. Even as I’m here today, Vice President Biden is in Delaware announcing the reopening of a once-shuttered GM factory that will soon put people back to work building plug-in, electric hybrid vehicles. On Friday, I was in Boston — that’s good news. (Applause.) On Friday, I was in Boston, where workers will soon be breaking ground on a new Wind Technology Testing Center that will allow researchers in the United States to test the world’s newest and largest wind turbine blades for the very first time. And there are recovery projects like this in cities and counties all across the country.

So at this moment, there is something big happening in America when it comes to creating a clean energy economy. But getting there will take a few more days like this one and more projects like this one. And I have often said that the creation of such an economy is going to require nothing less than the sustained effort of an entire nation — an all-hands-on-deck approach similar to the mobilization that preceded World War II or the Apollo Project. And I also believe that such a comprehensive piece of legislation that is taking place right now in Congress is going to be critical. That’s going to finally make clean energy the profitable kind of energy in America — legislation that will make the best use of resources we have in abundance, through clean coal technology, safe nuclear power, sustainably grown biofuels, and energy we harness from the wind, waves, and sun.

The House has already acted and passed such legislation and the Senate is on the way. In fact, just today, the Environment and Public Works Committee, under the leadership of Senator Barbara Boxer, is holding the Senate’s first hearings on this bill.

The creation of a clean energy economy has to be made as swiftly and carefully as possible, to ensure that what it takes to grow this economy in the short, medium, and long term is no longer delayed. And I’m pleased to report that a consensus is growing to achieve exactly that — consensus between Democrats and Republicans, environmentalists and evangelicals, labor leaders and especially so many business leaders like Lew that are ready to jump on board because they understand that the growth of clean energy can lead to the growth of our economy.

Now, I have to be honest with you, though. The closer we get to this new energy future, the harder the opposition is going to fight, the more we’re going to hear from special interests and lobbyists in Washington whose interests are contrary to the interests of the American people. Now, there are those who are also going to suggest that moving towards a clean energy future is going to somehow harm the economy or lead to fewer jobs. And they’re going to argue that we should do nothing, stand pat, do less, or delay action yet again.

I just want to point out we’ve heard such arguments before. We’ve engaged in this same type of debate a lot of times through our history. People don’t like change, and they get nervous about it. Lew and I were just talking about it. He said especially utility executives get nervous about change. (Laughter.)

It’s a debate between looking backwards and looking forward; between those who are ready to seize the future and those who are afraid of the future. And we know which side the United States of America has always come down on. We know that we’ve always been a people who were unafraid to reach for that more promising future. We know that the promise of places like DeSoto and projects like the creation of a modern electricity grid mean a continuation of that long march of progress in this country. And we refuse to believe that our politics are too broken to make the energy future we dream of a reality.

I know what the American people are capable of when they’re called upon to meet big challenges. I know it because of I’ve seen here in Arcadia and I’ve seen it all across America. This is the nation, after all, that harnessed electricity and the energy contained in an atom; that developed the steamboat and the modern solar cell; that connected a continent with a massive system of highways and railroads. And I believe we can blaze such trails again, and I commend all of you for being so critical in these early first steps. Congratulations to you on your extraordinary achievement, and when it comes to the development of clean, renewable energy, I hope there are going to be a lot of days like this one to come. I know I’m going to be working as hard as I can to make it possible.

And while I’m here, I just want to introduce Carol Browner, who works with me in our White House, and she is helping to lead the charge in Washington. (Applause.) She just happens to be from Florida and so she knows a little bit about the Sunshine State. We are so excited by what you’ve done and we are absolutely confident we’re just going to keep on building on the great progress that you’ve already made.

Thank you, Arcadia. Thank you, Florida. (Applause.)