Consensus on Need to Update Energy Delivery but Debate on How to Get There

Feb. 4, 2009— -- If the likes of President Obama, former Vice President Al Gore and environmental advocate Robert Kennedy Jr. have their way, the United States will build a so-called smart grid that does for energy what the Internet has done for communication.

In their vision of the future, renewable energy like wind power from North Dakota will course through electric transmission lines on the way to population centers like Chicago. Or consumers will generate their own solar power at home for plug-in cars and sell any excess energy to their neighbors or back to the smart grid, which is described as a way to upgrade the distribution of power over long distances.

"For less than a trillion dollars a year, every American can have clean energy forever," Kennedy told ABC News. "Compare that to the $700 billion the U.S. spends on oil a year."

Whatever the cost, some experts say, adopting the kind of emissions-free energy sources needed to manage climate change will require a new "highway system" to move energy throughout the country, drawing on smart-grid transmission, energy efficiency and renewable electricity.

Among the biggest impediments to upgrading America's infrastructure are the myriad state and federal authorities that govern the existing power grid, which is a patchwork of electricity networks that is losing the technological race.

First and foremost, a modernized electricity grid would require federal legislation to create new power lines, control circuits and communication systems criss-crossing the country to connect all power plants and buildings, as well as new training for the people who would service the system. Consistent with worldwide interest, a comparable effort is underway in China, for instance, although its socialist government has the luxury of expediting the process.

Here, the Obama administration has a plan of its own, to double renewable energy capacity within three years and add more than 3,000 miles of new transmission lines on the way to building a new electricity smart grid.

The $800 billion American Recovery and Reinvestment Act President Obama has proposed would allocate $32 billion to transform the nation's energy transmission, distribution and production systems by allowing for a smarter and better grid and focusing investment in renewable technology.

It would also allocate $20 billion in renewable energy tax cuts and a tax credit for research and development on energy-related work, and a multiyear extension of the renewable energy production tax credit, although the financial crisis has damp ended excitement, at least in the short run, for these kinds of incentives.

And loan guarantees and loans to public and private transmission owners provided in the stimulus would accelerate already planned projects that might have otherwise slowed down in a recession, which has dampened the pursuit, at least in the short-run, of these environmental initiatives.

The environmental component of the recovery act would be part of the "largest investment in the backbone of our economy since the Interstate highway system," Obama's chief economic adviser, Lawrence Summers, said on "Meet the Press" recently. "It's going to double renewable energy."

For all its ambition, however, the United States is unlikely to undertake a prohibitively costly overhaul of its entire electrical grid, said Jim Owen, spokesman for Edison Electric Institute, an association of U.S. shareholder-owned electric power companies.

Many New Transmission Lines

The institute has no specific policy on a federal transmission grid but is leery of the federal government's delving into what has been the purview of individual states. Its members would be opposed to "the heavy, intrusive hand of the federal government overtaking states rights," Owen said.

Still, a recent report commissioned by the institute concluded that if the United States is going to add clean energy sources to the grid without suffering from blackouts, many new transmission lines are needed.

To that end, supporters are campaigning to "Repower America" with 100 percent clean energy within 10 years. "We are trying to open up a dialogue on the possibility of updating the electric grid so that it can run completely off clean energy within a decade," Cathy Zoi, CEO of Gore's Alliance for Climate Protection, told ABC News recently.

"Besides helping to fight climate change, updating the grid will actually save money by increasing the efficiency of energy, as well as create jobs in the process."

The nation has about 10,000 large-scale utility power plants, with more than 95 percent of them spewing hazardous byproducts such as mercury. And there are about 157,000 miles of high-voltage electric transmission lines in the country, according to the U.S. Department of Energy.

To achieve a cleaner system, new transmission lines would be required to transport renewable energy many miles (solar power from the Mojave Desert, for instance) so the large-scale facilities could be taken offline. Renewable energy isn't always found in abundance close to population centers, meaning that the challenge would be to transport it while keeping escaped energy to a minimum.

Adding new high-voltage direct and alternating current lines that move energy long distances, which existing alternating current lines cannot do, would conceivably contribute to making renewable energy a significant part of the country's energy mix, engineers say.

Sun Not Always Shining

And if the grid had "smart" features and ways to store energy, intermittent availability (when the sun isn't shining, for instance) would be less of an issue, Zoi of the Alliance for Climate Protection said.

Engineers would also incorporate automated two-way communication systems between utilities and users in order to maximize efficiency. This would, for instance, allow energy buildings to generate their own electricity from solar or wind and sell it back to the grid. Homes and buildings will be able to be their own power plants.

"To build an economy that can lead this future, we will begin to rebuild America," Obama said in an economic speech shortly before taking office. "That means updating the way we get our electricity, by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation."

Vice President Joe Biden has linked the need for a new national grid to economic recovery. Creating a new grid "would create tens of thousands of new jobs, high-paying jobs," he told George Stephanopoulos on ABC's "This Week" recently.

"It needs to be done and it will have a long-range payoff, not just for next year and the following year, keeping the economy from nose-diving, begin to turn the nose of that aircraft up, but it will also change our energy picture. It will deal with global warming," Biden said.

Grid Could Pay for Itself

What's unclear is the feasibility of funding a project capable of lower emissions significantly. It would take anywhere from $150 billion to $1 trillion or more in the next 15 years to build enough transmission lines to upgrade the grid enough to clean the energy supply, several experts told ABC News.

Existing limitations on the grid cost the nation anywhere from $80 billion to $188 billion a year because of grid-related power outages and other issues, according to the National Renewables Energy Laboratory, which conducts research and development as part of the U.S. Department of Energy.

The new grid would pay for itself with gains in efficiency alone, in addition to addressing climate change, Zoi of the Alliance for Climate Protection said, citing the National Renewables Energy Laboratory.

Private entrepreneurs such as VantagePoint Venture Partners are ready to step in and help, Kennedy says of the venture capital firm that he advises. "If the president works with governors to lift constraints and encourage investment, utilities and private entrepreneurs will quickly step in to revitalize the grid," Kennedy wrote in a recent Vanity Fair article.

"The cost of updating the grid is $150 billion for transmission and distribution," Kennedy told ABC News. "It would cost an additional $650 to $700 billion for actual capacity, meaning the cost of building the solar and power plants that produce the energy."

As for Obama's stimulus package, Kennedy said, the effectiveness of its renewable energy component would depend on how well the funds are allocated and used.

While several bills are being developed in Congress that aim to make it easier to build new transmissions lines and add renewable energy sources to the grid, experts argue that a complete switch to renewable sources within a decade would require new legislation on par with the Federal Aid Highway Act developed under President Dwight Eisenhower that created the Interstate highway system. It would give the federal government jurisdiction to bypass state and local authorities to build new transmission lines.

Climate Change as Motivation

Senate Majority Leader Harry Reid, D-Nev., has introduced a bill that would give the federal government a larger role in creating new transmission lines. Reid cites climate change as his motivation.

But it might not be that easy with "nearly $500 million in lobbying and advertising spent the first six months of this year by the oil and coal industries in Washington," Zoi said. "That's pretty powerful, the energy legislation, the squeamishness that we had about 'drill baby drill,' the difficulty that we had passing renewable energy tax breaks suggests that in the past the fossil fuel industry has had a pretty tight hold on Washington."

The United States is not alone in needing a new energy grid. Other nations in Europe and Asia have already started to update theirs. China, for instance, is allocating funds from its recent economic stimulus package to update theirs, allowing the country to add more renewable energy such as wind, solar and hydro to its energy portfolio.

But it remains to be seen whether China's upgrade will lower emissions.

Double Renewable Energy?

Then again, it's also unclear whether the Obama administration's American Recovery and Reinvestment Act would make good on the plan to double renewable energy capacity within three years and add more than 3,000 miles of new transmission lines.