Smart grid tech firms hoping for economic stimulus windfall

Friday, May 15, 2009
By Marc Songini

The good news is that New England-based utilities, startups and energy consumers stand to receive millions from the feds in smart grid stimulus funds. The bad news — nobody knows yet how much or how to get it.

Last month, the U.S. Department of Energy announced its intention, under the American Recovery and Reinvestment Act, to distribute more than $3.3 billion in smart grid technology development grants. The DOE will provide another $615 million to investigate and demonstrate smart grid storage and monitoring technologies. This money will be available for wide-scale projects to assist utilities in improving operations, store energy and exploit renewable power sources, stated the DOE. It also will assist consumers to better enable their offices or houses to become more energy efficient.

Ultimately, the smart grid stimulus means a windfall for New England, which has already been establishing itself as a clean technology hub, noted David Brewster, president of Boston-based EnerNOC Inc., which provides a smart grid application that helps utilities reduce power usage during peak demand. “It’s great for the region as we grow green technology clusters.”

However, until the DOE finalizes its guidelines, there are many devils to be exorcised from the details, said smart grid technology executives. The framework is still a moving target, noted Skip Ashton, vice president of engineering at Ember Corp., a Boston-based manufacturer of chips that are embedded in automated electric meter readers and other smart grid devices. “The utilities don’t want to put in things they haven’t tried and tested. They also need to know what types of technology are even eligible for stimulus funding,” he said.

The exact funding mechanisms will vary. For instance, cash for energy efficiency projects will be disbursed largely at the local government level, and cities and towns will have a lot of discretion in how it’s spent, said Brewster. Funds for smart grid innovation and deployment will come from the DOE. It’s unclear exactly how DOE will spend the money, but observers say it is highly likely that non-utility entities, like EnerNOC, will be eligible to apply directly for the funds.

Which technologies the utilities spend the grants on will vary, because they are all at different levels of smart grid efficiency, noted Jay Ganson, manager of business development and environmental affairs at Newton-based Ambient Corp. The company offers utilities the ability to deploy smart grid applications by supporting networking capabilities over power lines. “No one solution will fit all,” said Ganson.

The states are in varying degrees of preparation for this as they await specific guidelines from the DOE to assist. “We’re slightly early in the process,” said Lisa Capone, press secretary at the Massachusetts’ Executive Office of Energy and Environmental Affairs. However, she expected that the final guidelines would be available by the middle of next month. Both the Massachusetts Department of Energy Resources and the Clean Energy Center will work to assist companies on exactly how to apply, said Capone.

Even after proposals are in place and have been initially approved, it will most likely require state-level regulators to approve the final disbursement of funds, said Ashton. “It’s exciting, but this process moves slowly.”