Is a $165 billion Smart Grid too Expensive for American taxpayers?

Renewable energy — By James on February 18, 2010 at 11:25 am
Power transmission cables

Smart grids - who will pick up the $165 billion bill for energy upgrades?

Upgrading America’s electricity grid hit a snag last week as the thorny issue was raised of exactly how much improvements would cost, and more importantly who would foot the bill.

Bringing the country’s national grid into the 21st century with an interactive online management system that can monitor and regulate consumer use of power is an expensive exercise. Creating a smart grid in the pilot city of Boulder, Colorado cost $100 million; expanding that network across the US would cost $165 billion according to the Electric Power Research Institute.

Fishing out $165 billion, even over a period of 20 years is still an extraordinary sum of money to find, and taxpayers might reasonably be concerned about where funding is going to come from such a project.

On the one hand, the government might pick up the cost of improving the grid, but such a cost will inevitably result in a rise in taxes. On the other hand, the power corporations could pay to improve the network, but this will inevitably result in a rise in the price of electricity to cover overheads.

Either way, it is the consumer who will ultimately have to pay to boost the intelligence of our current dunce grid to a smart grid. This leads us inexorably to ask: Do we really need a smart grid if the cost is going to be so high?

The short answer is yes, we really do. A smart grid and smart meters are a necessary improvement that needs to happen to improve the country’s infrastructure. Sure we could get away without it for a bit, but in the long run it will be a cost which pays for itself and will help reduce energy expenditure.

Boulder Colorado Is a $165 billion Smart Grid too Expensive for American taxpayers?

Boulder, Colorado has trialed the smart grid system at a cost of $100 million.

It’s the same principle as getting double-glazing for your house – it might initially be an expensive outlay, but the benefit is instant and over time the amount of energy you save by retaining heat pays for the installation cost. Not only that, you use less energy as a result of having double-glazed windows.

Smart meter Is a $165 billion Smart Grid too Expensive for American taxpayers?

Smart meters will help curb energy use. Image courtesy of the Energy Retailers Association/PA

Smart meters are the same. Intelligent monitoring devices remove the need for an analogue electricity meter, and because smart meters can give you instant feedback on how much electricity you are using, you can curb your expenditure and watch the results of your actions in real-time.

Smart grids are the future, it may be an expensive exercise, but the benefits will be there for all. Cheaper, more efficient energy systems and lower overall energy use, which can only be a good thing for the environment.

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