At the Smart Grid panel this afternoon at the Global New Energy Summit in beautiful Santa Fe, N.M., I learned a few new things about what could be the largest (and most important) infrastructure investment the U.S government ever makes – a new grid:

1. For the most part, to quote one of the panelists, "the utilities are dinosaurs." A fair share of the engineers who run the complex network of transmission lines, substations and distribution grids are skeptical about introducing microprocessors into the mix and even more paranoid about alleged smart grid hackers. They would much rather use vintage 70's electromagnetic components than get into computerized sensors and new-fangled software, even though modernizing the grid could greatly improve both efficiency and security.

2. Over 50 percent of these "dumb grid" aficionados will be retiring in the next few years, but there will not be a 1-to-1 replacement of staff. With sophisticated software like GE Lighthouse set to come out in 2010, 2-way sensors and real-time monitoring, a couple of engineers can do the work of a traditional 10+ person team. Not good news for green jobs, but great news for Smart Grid advocates how have been blocked for decades by resistance to innovation.

3. Solar and wind probably do not have a chance without a smart grid that is able to handle intermittent loads. I've heard this before, but after the hour-long discussion, it is becoming clear just how big of a barrier this is to adoption. Right now, solar PV is great for urban rooftop installation where the panels are tied directly to the grid, but to do large scale solar or wind out in the desert, additional capital is required for supplemental on-demand power (using natural gas for example) to fill in at night or when the panels loads are down. Storage, as a means to even out the flow of electrons, is not yet a reality.

4. The 3 I's of Smart Grid — instrumented (meaning lots and lots of sensors), interconnected (a data network to go with the electricity network), and intelligent (software does not yet exist to manage this complex system). This will require a LOT of cash. Obama has allocated $850 million to modernize the grid (just transmission) and $4.5 billion for smart grid investments. This won't even come close to covering it. PG & E alone put $3 billion just for sensors in California. The U.S has been woefully neglectful of its grid and sadly did not invest during its halcyon days:

The result is an antiquated grid that prevents the scaling of renewables.

5. Case studies are emerging that now prove the efficacy of smart grid technology. The University of New Mexico just created a campus-wide "Micro Grid" which ties together over 60 buildings and a newly revamped cooling system. The whole thing is monitored online via web-based software tied into Google Earth. I'm going on a tour next week so will get details. Another example is the Gridwise program which provides appliance sensors that light up to warn you if you are buying "peak energy" which costs up to 4 times more than off-peak energy.

6. Lastly, it really doesn't matter how much innovation takes place unless there is a corresponding overhaul of energy policy. All of the utilities have to be operating by the same playbook if we are going to send wind energy from Kansas to California. Right now, even within a single state, there are conflicting regulations that need to be sorted out and brought in line with a comprehensive national energy policy.

IEEE (the Institute of Electronics and Electrical Engineers) has a great video that explains the basics of Smart Grid technology:

Dumb grid 'dinosaurs' set to retire
About 50 percent of legacy engineers are hitting retirement, and smart grid advocates are rejoicing.