Smart Grids Deliver Touted Economic and Environmental Benefits

Smart grids are envisioned as the hub of a smarter, more sustainable and democratized electricity distribution system, a core element of making a transition from fossil fuel to cleaner, renewable energy sources. Investing in smart grids is also touted as being a significant source of relatively well-paying, clean tech jobs.

A study released Monday by the Silicon Valley Smart Grid Task Force indicates that these claims aren't unfounded. Breaking the smart grid industry into four parts: power management and energy efficiency, energy storage, local clean energy and delivery of electricity, the research indicates that the smart grid "is a job engine that California can rely on," says an Environmental Defense Fund (EDF) blog post.

Employment in Silicon Valley and the San Francisco Bay Area's smart grid sector rose 129 percent while total employment rose only eight percent since 1995. Local smart grid sector employment continued to grow even during the depths of the 2007-2009 recession, as national unemployment doubled from five percent to nearly ten percent. Manufacturing jobs in particular grew strongly, Task Force researchers found. More than half of Silicon Valley's smart grid jobs are in manufacturing, according to the study, which was conducted by Collaborative Economics

The Smart Grid Job Engine

Smart grid system pilot-testing and commercial installations continue to grow in the US, but questions regarding security and the actual benefits to consumers, along with the process of actually proving technologies in the field, continue to be constraining factors.

The public-private sector Silicon Valley Smart Grid Taskforce was created in June, 2010 by the City of San Jose, the Silicon Valley Leadership Group and the Pacific Gas & Electric Co. as "a first step in aiding California's long-term environmental sustainability and economic development." Collaborative Economics' report aimed to determine the impact a nationwide smart grid roll out would have on Silicon Valley locally.

The Task Force research team concluded that Silicon Valley and the broader Bay Area "is well-positioned to be a leader in the development and deployment of smart grid-related technology and to reap the economic benefits of both."

That's not surprising really considering that major local employers, including Google, Oracle and Cisco, not to mention PG&E, Calpine, GE and Honeywell are all active in across the smart grid value chain.

The number of local businesses providing smart grid products and services increased 138 percent from 1995 to 2009, while the overall economy grew 82 percent. Smart grid business start-ups rose five percent with the addition of over 30 businesses between January 2008 and 2009.

Some 12,560 people were employed in the local smart grid sector in 2009, when the nation was smack in the middle of the last recession, four percent more than was the case in 2008. Manufacturing jobs accounted for at least 50 percent of the total.

Smart Grid Advantages

More recent indications are that the jobs markets in Silicon Valley and the Bay Area were much better able to withstand the recession and recover at a faster rate than the state or country as a whole.

Other findings in the Task Force's report include:

• Energy Storage was the fastest growing sector between 2008 and 2009, expanding by 13 percent with the addition of over 230 jobs.


• Distributed Generation represents 59 percent of employment in smart grid.


• Though one of the smaller sectors, Transmission reports the highest employment concentration in the region.

The Task Force research team also sought to examine the touted benefits of smart grid systems. "The introduction of new layers of communications, metering and power management technology to the conventional grid, smart grid significantly improves the reliability and resilience of the system and opens new paths for boosting energy efficiency and reducing negative environmental impacts," they wrote.

They listed the following among the advantages and benefits:

• In-home and in-building applications engage consumers and other energy users in monitoring their power use, conserving power, and performing electricity-intensive activities during off-peak hours.


• Power quality, reliability and overall grid optimization increase greatly through the use of sensors and data management applications that pinpoint and anticipate problems, thereby preventing costly electricity disturbances and blackouts.


• Grid security against physical and cyber attacks is elevated through advanced communication and decision-making interfaces.


• Smart grid networks can more easily accommodate a greater variety of generation and storage technologies, smoothing the integration of variable renewable energy sources and easing peak load demands.


• Deploying smart grid infrastructure creates new product and service markets and enables varied pricing structures that can help shape consumer demand to reduce consumption during peak times.

The research team also found that "the environmental benefits of smart grid result primarily from the increased efficiency gained throughout the system and the streamlined integration of distributed renewable energy generation.

"The real-time information and responsiveness empowers consumers to better manage their electricity use. The efficiency gains result in the reduction of greenhouse gas emissions and the deferment or elimination of the need for 'peaker plants' which are brought on line to help meet demand peaks."

Photo courtesy of Silicon Valley Leadership Group