Smart Grid Less Important Than Building More Power Lines

Mar 9, 2009 - Jay Yarow - The Business Insider

In the Wall Street Journal venture capitalist Vinod Khosla, says "90% of the senators in Washington" don't know the difference between a smart grid and merely building transmission lines.

If you're in that group, the difference is simple. Building the transmission lines is just building the capability for electricity to flow over power lines. The smart grid allows for information to travel across those power lines as well, meaning that your home or business can communicate energy usage with the utility company in real time. In that way the utility can charge tiered rates for hourly energy usage like a phone company. For example, when more people need energy during the day, rates are higher. At night when most are asleep, energy rates are lower. A smart grid also helps make energy use more efficient and allows high voltage power to travel through electic lines. (Smart grid explained here.)

Khosla says that the transmission lines are "10 times more important" than the smart grid. The reason for that is getting energy from remote wind and solar installations to more urban and suburban areas can't be done without more power lines. Khosla also says we don't need the government to build the power lines. We merely need the government to clear the way for private industry to build power lines. If the government can solve eminent-domain problems, then we'll get the power lines we need.

Khosla also threw out this cool, non-grid related tid-bit:

Maybe I can give you a very specific example. I did a little analysis. If we said we want to replace all gasoline in this country by 2030, it's only 22 years. How much capital would it take? Far less per year than we invested in telecom during the telecom 10-year boom. That's pretty amazing statistics.