Smart Grid is Just Hot Air
October 15, 2009
by: David Williams

Government WasteWatch, Winter 2009

The American Recovery and Reinvestment Act, i.e,. the stimulus bill, is like an onion; as more layers are peeled away, the tears flow faster.  For example, $4 billion was included in the stimulus bill for enhancing smart grid technology.  Upon closer examination, this not look like an intelligent use of taxpayer money.
 
Smart grid technology is generally defined as new power generating technology and a power grid through which a utility company can control users’ appliances in the name of energy conservation.  With the increased global warming hysteria and the latest congressional attempt at a cap-and-trade bill, which would put a mandatory cap on emissions, smart grid technology is another environmental fix du jour.
 
A review of stimulus grants by Citizens Against Government Waste (CAGW) reveals that smart grid technology is not about saving the planet; it is about corporate welfare.  On November 24, 2009, Department of Energy (DOE) Secretary Steven Chu announced grants totaling $620 million for 32 “projects around the country to demonstrate advanced Smart Grid technologies and integrated systems that will help build a smarter, more efficient, more resilient electrical grid.”  They included “large-scale energy storage, smart meters, distribution and transmission system monitoring devices, and a range of other smart technologies.”

Projects announced on DOE’s website include:

• The Long Island Smart Energy Corridor to “partner with two branches of the State University of New York (SUNY) to create a Smart Energy Corridor along Route 110 business corridor, involving 800 customers.” Total federal funding is $12.5 million, with an expected total investment of $25.3 million. That equals $31,000 per customer.
• The Pecan Street Project Energy Internet Demonstration to “develop and implement an Energy Internet microgrid, located in a large mixed-use infill development site in Austin, Texas. This effort will build on Austin Energy’s existing Smart Grid programs by creating a microgrid that will initially link 1,000 residential smart meters, 75 commercial meters, and plug-in electric vehicle charging sites. The project will be implemented by a unique Texas not-for-profit corporation created to research, develop and implement smart grid clean energy systems.” Total federal funding is $10.4 million, with an expected total investment of $24.6 million. That equals $24,000 per customer.

Another aspect of smart grid technology capitalizes upon the recent obsession with wind power with $130 million allocated to eight projects in the November 24 DOE notice of awards.  One particular project that raised questions for CAGW was $24,978,264 for the Tehachapi Wind Energy Storage Project to “deploy and evaluate an 8 MW utility-scale lithium-ion battery technology to improve grid performance and aid in the integration of wind generation into the electric supply.”

According to a December 2, 2009, article by Mara Lemos Stein, a reporter for Dow Jones Clean Technology Insight, “The DOE granted SCE, a unit of Edison International (EIX), $25 million toward a $53.5 million project that will use A123 Systems’ batteries to improve grid performance and integrate its Tehachapi Wind Energy project in California into the electric supply.  A123 Systems is also a partner in a DTE Energy Co. (DTE) project that received $5 million from the DOE to test the ability to integrate secondary-use electric vehicle batteries in a community-energy storage demonstration using solar power.”
 
Stein also noted that, “In early August, A123 Systems was awarded $249 million under the DOE’s advanced battery and components manufacturing program to build its first large-scale manufacturing plant in the U.S.  The company sealed its agreement with the state of Michigan last week to receive tax credits of up to $100 million over a four-year period to build its facility in the state.”
 
That means that A123 Systems, which runs the Tehachapi Wind Energy project, has either received or will benefit from at least $279 million in government grants in 2009.
 
A123 Systems is not a mom-and-pop company.  An April 13, 2009, press release issued by A123 Systems bragged about the money that General Electric (GE) has invested.  “This is GE’s seventh investment in A123, making it the company’s largest cash investor and bringing GE’s cumulative investment to $70 million – increasing its ownership stake to more than ten percent.”
 
It is clear that if GE, the world’s fifth largest company, sees potential profit from its investment in A123, the company has no trouble raising capital.  Taxpayers should not be fattening the bottom line of wealthy for-profit companies with hundreds of millions of dollars in corporate pork.  Touted as a way to get Americans back to work, the stimulus includes a ruse to siphon money to politically-connected operations.
 
The stimulus bill is also reminiscent of the late 1950s and early 1960s TV crime drama “The Naked City” which had the famous tagline:  “There are eight million stories in the Naked City.  This has been one of them.”  That was fiction; the story of how the $787 billion stimulus bill is wasting a lot of money is only too real for taxpayers.