Jump-start the smart grid

Against this backdrop, policy and corporate leaders,
technology innovators, legislators and regulators are gathering this week in
Washington at the inaugural GridWise Global Forum to discuss how we can work
together to create a well-functioning smart grid.

The world’s electricity network is expected to change more
in the next 20 years than it has in the past 100 years. To keep pace, the
United States must take the opportunity – and meet the responsibility – to
modernize our nation’s energy infrastructure.

Time is short. The decisions made in the next five years
will determine whether the transition to a smarter energy ecosystem is
considered a success. And we cannot afford to let the smart grid revolution
pass us by.

In its simplest terms, electrical grid renovation means
modernizing the nation’s aging electrical system to meet 21st century reality.
These infrastructure upgrades promise more efficient power stations, delivering
electricity with fewer blackouts, while wasting less power and labor. It also
means homes and businesses can save energy, and money, with appliances that
know when to shut themselves off.

An improved grid will enable the deployment of larger
amounts of renewables, such as wind and solar. Likewise, high-mileage electric
cars require that the grid be able to send and receive data about power pricing
and availability. And beyond the electric grid, comparable improvements can
deliver benefits to how we manage our natural gas and water resources.

So, the question comes: How do we keep the smart grid
revolution alive, and how do we accelerate its progress?

Here in Washington, at the top of any to-do list are
policies encouraging capital investment in the grid and targeting the adoption
of advanced technology. Long term tax incentives for the installation of
qualified smart grid technology would spark broader industry effort and help
provide the backbone of the smart grid. Good policy would help utility planners
focus future investment plans. It could also guide technology providers and
attract financial investors.

Internationally, government-to-government efforts could
help transfer best practices – and prevent pitfalls – learned in Shanghai to
efforts in San Francisco and Seville. Within the U.S., cooperation could
improve not only between utilities but also among the multi-state “regional
transmission organizations” where utilities connect with one another.

We’ve made some important progress in recent months. The
stimulus act, for example, steered $3.4 billion toward smart grid technologies.
Already, it is boosting the number of trials and electrification, and creating
jobs and workforce training, as well as accelerating research and development
in university and industry labs.

President Obama’s recent initiative to boost exports also
will benefit smart grid technology, where U.S. companies are leaders.
Indirectly, any federal energy policies boosting renewable energy and
efficiency would also be a boon to the smart grid, since both are enabled by
smart grid technologies.

On the industry side, progressive utilities have begun to
embrace new business models that prioritize upgrading the electrical grid by
installing smart meters, customer Web portals and intelligent monitoring
systems that track electricity flow to improve efficiencies and prevent
outages. But more of their peers need to change the prevailing financial
culture that today manages risk at the cost of innovation.

Collaboration is critical. The infrastructure challenge
facing our country, as vast as it is, has even larger implications – on what it
will take to build a cleaner, safer and more secure future. Congress must act
on energy policy sooner rather than later. Without their support, our recent
progress will slow down and make us less competitive as other countries
proactively invest in their energy futures.

Guido Bartels is general manager of the Global Energy
& Utilities Industry at IBM and the chairman of the GridWise Alliance,
which is hosting the GridWise Global Forum in collaboration with the Department
of Energy.