Smart Grid in New Mexico the next Silicon Valley?

In the 1950s a Stanford University College of Engineering dean leased vacant university-owned land to high-tech companies to generate income and create job opportunities for graduating students. This simple and brilliant idea generated billions and created one of the most successful U.S. industrial centers – Silicon Valley.

Now there’s an opportunity to create a similar tech center in New Mexico to capitalize on perhaps the biggest business opportunity in decades — smart energy. John Doerr, the legendary Silicon Valley venture capitalist, who helped fund startups like Google, says “green tech,” especially energy, is the “mother of all markets.”

Central to this energy opportunity is “Smart Grid”, which got national attention during the presidential election and then with passage of the American Recovery and Reinvestment Act. ARRA funds $4.3 billion in Smart Grid projects, which could kick-start an industry and give New Mexico an opportunity. Smart Grid uses information technology for the electric system, or grid, to effectively deliver electricity, change the way we buy it and engage consumers to use it efficiently.

Dan Reicher, Climate Change director for Google, wrote in Newsweek: “If the grid could be in constant communication with your air conditioner, we could avoid brownouts and blackouts and you might get paid for allowing your air conditioner to be cycled on and off imperceptibly.”

State Senate Bill 205, passed this legislative session, creates a unique approach called “Green Grid.” Green Grid services could create enterprise zones for electricity to leverage efficiency and on-site renewable electric generation to reduce consumption, and improve facility carbon footprints. Electricity is the cleanest energy source at the point of use, but it accounts for 38 percent of U.S. energy use and produces 39 percent of U.S. greenhouse gas emissions. Efforts to reduce carbon emissions with electricity are particularly important, as our high-tech lifestyles and businesses demand more electricity. The U.S. Department of Energy projects a 40 percent increase in electric demand over 15 years. New Mexico is already active with Smart Grid, and has an opportunity in what will be a $300 billion market by 2015 according to Brattle Group.

Electric utilities face big challenges because they’re dealing with aging infrastructure and increasing demand. Utilities cannot assume that conventional techniques, e.g., building fossil-fueled power plants, are desirable or politically acceptable ways to solve electricity problems. Electricity is more challenging than other commodities, like oil, because it cannot be stored easily or cost-effectively. Electricity is the lifeblood of our economy, and yet Lawrence Berkeley National Lab says power interruptions, like the East coast blackout of 2003, cost U.S. consumers $79 billion per year. Quite simply, the U.S. needs an IT revolution for electricity, like what happened in business, education and entertainment.

New Mexico’s Smart Grid role attracted 200 technology companies to Albuquerque for a 2007 national conference. Mayor Chávez said, “We’ve got the right government and corporate attitude and the perfect environment to attract many of your green energy businesses, and we are committed to doing just that.”

Other New Mexico connections with the Smart Grid agenda:
- Mayor Chávez was the first mayor to sign the
GridWise Constitution in 2007
- Suedeen Kelly, a former UNM law professor, is a Federal Energy Regulatory commissioner cochairing the Smart Grid Collaborative with state regulators
- UNM’s Smart Grid project won a 2008 national DOE award by blending Smart Grid and renewable energy for a higher level of sustainability
- Dr. Tom Bowles, science advisor to Gov. Richardson, launched Green Grid to drive statewide Smart Grid deployments
- Mesa del Sol, an evolving Smart Grid project, was highlighted by Bob Galvin and Kurt Yeager in their book, “Perfect Power”

A University of Massachusetts Political Economy Research Institute study says the U.S. needs a “Green Recovery” to recover from our economic problems. At the heart of a green recovery will be Smart Grid. New Smart Grid in New Mexico the next Silicon Valley?

Mexico can benefit by maintaining existing jobs and attracting companies to create new, clean, high-wage, “green-collar” jobs. This is simultaneously one of the most exciting and one of the most challenging times in U.S. history. It isn’t clear what the future holds, but regardless, there will be an industry center for the Smart Grid industry, so why not in New Mexico?

JACK MC GOWAN is the CEO of Energy Control Inc. (ECI), chairman emeritus of the U.S. Department of Energy GridWise Architecture Council, and Buildings Champion for the Galvin Electricity Initiative. Reach him at jackmcgowan@energyctrl.com.

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