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Brief Overview of Webinar

Fulbright & Jaworski L.L.P. presented a short Webinar yesterday concerning how the stimulus package or the American Recovery and Reinvestment Act of 2009 supports alternative energy.

One of the main focuses was on what is being called the "smart grid," a term many of us have probably heard a lot here lately. Basically, an upgrade from our current grid system (referred to in the Webinar as the dumb grid) would allow us to use energy more effeciently and effectively.

The North American Electric Reliability Coporation (NERC) provides the diagram below to show how an electirc grid works. Visit NERC's Web site to learn more about exactly how an electric grid works.

Source: NERC

The two reasons given as to why the current grid is "dumb" has to do with engineering and parochial interests. As far as engineering goes, the current grid was invented by Thomas Edison who favored the direct current(DC); the current grid relies on siting and dispatching generators. Another problem is that the U.S. is divided into 3 areas which seem to have limited interest in working with each other. As you can see in the graphic below most of Texas doesn't connect with the rest of the country, avoiding some federal jurisdiction.

Source: U.S. DOE

The smart grid would offer increased electricity use efficiency. Siting is one of the most important factors concerning the new grid system. This is very critical for alternative power. We would want the grid to be sited where it makes the most sense. But, siting can be the hardest part because even if money can be spread among stakeholders evenly you will still encounter not in my backyard (NIMBY) issues.

What we would do with a smart grid is to look more closely at transmission, more specifically utilization, capacity and routing. Also, we would be able to monitor and control distribution based on demand.

In relation to the stimulus package the smart grid is set to receive 4.5 billion in direct support along with support through loan guarantees to entities such as the Bonneville Power Administration. There will also be a shift in funds being used from research to construction. One change the stimulus package makes is that grants will be available for up to 50%, up from 20% and these grants will now be payable in advance.

One must keep in mind though that siting transmission is a lengthy process and therefore new transmission from the package will be a long term process.

A quote by Thomas Jefferson provided in the Webinar yesterday afternoon sums up the issue rather well. Jefferson said, "I hope our wisdom will grow with our power, and teach us, that the less we use our power the greater it will be."

For more information about the electric grid and how it works please visit the DOE's technology page on their Electric Delivery & Energy Reliability Web site.

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