President Obama Announces $3.4 Billion Investment to Spur Transition to Smart Energy Grid

Applicants say investments will create tens of thousands of jobs, save energy and empower consumers to cut their electric bills

ARCADIA, FLORIDA – Speaking at Florida Power and Light’s (FPL) DeSoto Next Generation Solar Energy Center, President Barack Obama today announced the largest single energy grid modernization investment in U.S. history, funding a broad range of technologies that will spur the nation’s transition to a smarter, stronger, more efficient and reliable electric system.  The end result will promote energy-saving choices for consumers, increase efficiency, and foster the growth of renewable energy sources like wind and solar. 

The $3.4 billion in Smart Grid Investment Grant awards are part of the American Reinvestment and Recovery Act, and will be matched by industry funding for a total public-private investment worth over $8 billion.  Applicants state that the projects will create tens of thousands of jobs, and consumers in 49 states will benefit from these investments in a stronger, more reliable grid.  Full listings of the grant awards by category and state are available HERE and HERE.  A map of the awards is available HERE.
   
An analysis by the Electric Power Research Institute estimates that the implementation of smart grid technologies could reduce electricity use by more than 4 percent by 2030.  That would mean a savings of $20.4 billion for businesses and consumers around the country, and $1.6 billion for Florida alone -- or $56 in utility savings for every man, woman and child in Florida.

One-hundred private companies, utilities, manufacturers, cities and other partners received awards today, including FPL which will use its $200 million in funding to install 2.6 million smart meters and other technology that will cut energy costs for its customers.  In the coming days, Cabinet Members and other Administration officials will fan out to awardee sites across the country to discuss how this investment will create jobs, improve the reliability and efficiency of the electrical grid, and help bring clean energy sources from high-production states to those with less renewable generating capacity.  The awards announced today represent the largest group of Recovery Act awards ever made in a single day and the largest batch of Recovery Act clean energy grant awards to-date.

Today’s announcement includes:

• Empowering Consumers to Save Energy and Cut Utility Bills -- $1 billion.  These investments will create the infrastructure and expand access to smart meters and customer systems so that consumers will be able to access dynamic pricing information and have the ability to save money by programming smart appliances and equipment to run when rates are lowest.  This will help reduce energy bills for everyone by helping drive down “peak demand” and limiting the need for “stand-by” power plants – the most expensive power generation there is.   
• Making Electricity Distribution and Transmission More Efficient -- $400 million.  The Administration is funding several grid modernization projects across the country that will significantly reduce the amount of power that is wasted from the time it is produced at a power plant to the time it gets to your house.  By deploying digital monitoring devices and increasing grid automation, these awards will increase the efficiency, reliability and security of the system, and will help link up renewable energy resources with the electric grid.  This will make it easier for a wind farm in Montana to instantaneously pick up the slack when the wind stops blowing in Missouri or a cloud rolls over a solar array in Arizona. 
• Integrating and Crosscutting Across Different “Smart” Components of a Smart Grid -- $2 billion.  Much like electronic banking, the Smart Grid is not the sum total of its components but how those components work together.  The Administration is funding a range of projects that will incorporate these various components into one system or cut across various project areas – including smart meters, smart thermostats and appliances, syncrophasors, automated substations, plug in hybrid electric vehicles, renewable energy sources, etc.
• Building a Smart Grid Manufacturing Industry -- $25 million.  These investments will help expand our manufacturing base of companies that can produce the smart meters, smart appliances, synchrophasors, smart transformers, and other components for smart grid systems in the United States and around the world – representing a significant and growing export opportunity for our country and new jobs for American workers.

The combined effect of the investments announced today, when the projects are fully implemented, will:

• Create tens of thousands of jobs across the country.  These jobs include high paying career opportunities for smart meter manufacturing workers; engineering technicians, electricians and equipment installers; IT system designers and cyber security specialists; data entry clerks and database administrators; business and power system analysts; and others.
• Leverage more than $4.7 billion in private investment to match the federal investment.
• Make the grid more reliable, reducing power outages that cost American consumers $150 billion a year -- about $500 for every man, woman and child in the United States. 
• Install more than 850 sensors - called ‘Phasor Measurement Units’ - that will cover 100 percent of the U.S. electric grid and make it possible for grid operators to better monitor grid conditions and prevent minor disturbances in the electrical system from cascading into local or regional power outages or blackouts.  This monitoring ability will also help the grid to incorporate large blocks of intermittent renewable energy, like wind and solar power, to take advantage of clean energy resources when they are available and make adjustments when they’re not.
• Install more than 200,000 smart transformers that will make it possible for power companies to replace units before they fail thus saving money and reducing power outages.
• Install almost 700 automated substations, representing about 5 percent of the nation’s total that will make it possible for power companies to respond faster and more effectively to restore service when bad weather knocks down power lines or causes electricity disruptions.
• Power companies today typically do not know there has been a power outage until a customer calls to report it. With these smart grid devices, power companies will have the tools they need for better outage prevention and faster response to make repairs when outages do occur.
• Empower consumers to cut their electricity bills.  The Recovery Act combined with private investment will put us on pace to deploy more than 40 million smart meters in American homes and businesses over the next few years that will help consumers cut their utility bills.
• Install more than 1 million in-home displays, 170,000 smart thermostats, and 175,000 other load control devices to enable consumers to reduce their energy use.  Funding will also help expand the market for smart washers, dryers, and dishwashers, so that American consumers can further control their energy use and lower their electricity bills.
• Put us on a path to get 20 percent or more of our energy from renewable sources by 2020.
• Reduce peak electricity demand by more than 1400 MW, which is the equivalent of several larger power plants and can save ratepayers more than $1.5 billion in capital costs and help lower utility bills.  Since peak electricity is the most expensive energy – and requires the use of standby power generation plants – the economic and environmental savings for even a small reduction are significant.  In fact, some of the power plants for meeting peak demand operate for only a few hundred hours a year, which means the power they generate can be 5-10 times more expensive than the average price per kilowatt hour paid by most consumers.

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Remarks by the President Challenging Americans to Lead the Global Economy in Clean Energy

Massachusetts Institute of Technology, Boston, Massachusetts

12:44 P.M. EDT

THE PRESIDENT:  Thank you very much.  Please, have a seat.  Thank you.  Thank you, MIT.  (Applause.)  I am -- I am hugely honored to be here.  It's always been a dream of mine to visit the most prestigious school in Cambridge, Massachusetts.  (Applause.)   Hold on a second -- certainly the most prestigious school in this part of Cambridge, Massachusetts.  (Laughter.)  And I'll probably be here for a while -- I understand a bunch of engineering students put my motorcade on top of Building 10.  (Laughter.)

This tells you something about MIT -- everybody hands out periodic tables.  (Laughter.)  What's up with that?  (Laughter.)

I want I want to thank all of you for the warm welcome and for the work all of you are doing to generate and test new ideas that hold so much promise for our economy and for our lives.  And in particular, I want to thank two outstanding MIT professors, Eric Lander, a person you just heard from, Ernie Moniz, for their service on my council of advisors on science and technology.  And they have been hugely helpful to us already on looking at, for example, how the federal government can most effectively respond to the threat of the H1N1 virus.  So I'm very grateful to them.

We've got some other special guests here I just want to acknowledge very briefly.  First of all, my great friend and a champion of science and technology here in the great Commonwealth of Massachusetts, my friend Deval Patrick is here.  (Applause.)  Our Lieutenant Governor Tim Murray is here.  (Applause.)  Attorney General Martha Coakley is here.  (Applause.)  Auditor of the Commonwealth, Joe DeNucci is here.  (Applause.)  The Mayor of the great City of Cambridge, Denise Simmons is in the house.  (Applause.)  The Mayor of Boston, Tom Menino, is not here, but he met me at the airport and he is doing great; he sends best wishes.

Somebody who really has been an all-star in Capitol Hill over the last 20 years, but certainly over the last year, on a whole range of issues -- everything from Afghanistan to clean energy -- a great friend, John Kerry.  Please give John Kerry a round of applause.  (Applause.)

And a wonderful member of Congress -- I believe this is your district, is that correct, Mike?  Mike Capuano.  Please give Mike a big round of applause.  (Applause.)

Now, Dr. Moniz is also the Director of MIT's Energy Initiative, called MITEI.  And he and President Hockfield just showed me some of the extraordinary energy research being conducted at this institute:  windows that generate electricity by directing light to solar cells; light-weight, high-power batteries that aren't built, but are grown -- that was neat stuff; engineering viruses to create -- to create batteries; more efficient lighting systems that rely on nanotechnology; innovative engineering that will make it possible for offshore wind power plants to deliver electricity even when the air is still.

And it's a reminder that all of you are heirs to a legacy of innovation -- not just here but across America -- that has improved our health and our wellbeing and helped us achieve unparalleled prosperity.  I was telling John and Deval on the ride over here, you just get excited being here and seeing these extraordinary young people and the extraordinary leadership of Professor Hockfield because it taps into something essential about America -- it's the legacy of daring men and women who put their talents and their efforts into the pursuit of discovery.  And it's the legacy of a nation that supported those intrepid few willing to take risks on an idea that might fail -- but might also change the world.

Even in the darkest of times this nation has seen, it has always sought a brighter horizon.  Think about it.  In the middle of the Civil War, President Lincoln designated a system of land grant colleges, including MIT, which helped open the doors of higher education to millions of people.  A year -- a full year before the end of World War II, President Roosevelt signed the GI Bill which helped unleash a wave of strong and broadly shared economic growth.  And after the Soviet launch of Sputnik, the first artificial satellite to orbit the Earth, the United States went about winning the Space Race by investing in science and technology, leading not only to small steps on the moon but also to tremendous economic benefits here on Earth.

So the truth is, we have always been about innovation, we have always been about discovery.  That's in our DNA.  The truth is we also face more complex challenges than generations past.  A medical system that holds the promise of unlocking new cures is attached to a health care system that has the potential to bankrupt families and businesses and our government.  A global marketplace that links the trader on Wall Street to the homeowner on Main Street to the factory worker in China -- an economy in which we all share opportunity is also an economy in which we all share crisis.  We face threats to our security that seek -- there are threats to our security that are based on those who would seek to exploit the very interconnectedness and openness that's so essential to our prosperity.  The system of energy that powers our economy also undermines our security and endangers our planet.

Now, while the challenges today are different, we have to draw on the same spirit of innovation that's always been central to our success.  And that's especially true when it comes to energy.  There may be plenty of room for debate as to how we transition from fossil fuels to renewable fuels -- we all understand there's no silver bullet to do it.  There's going to be a lot of debate about how we move from an economy that's importing oil to one that's exporting clean energy technology; how we harness the innovative potential on display here at MIT to create millions of new jobs; and how we will lead the world to prevent the worst consequences of climate change.  There are going to be all sorts of debates, both in the laboratory and on Capitol Hill.  But there's no question that we must do all these things.

Countries on every corner of this Earth now recognize that energy supplies are growing scarcer, energy demands are growing larger, and rising energy use imperils the planet we will leave to future generations.  And that's why the world is now engaged in a peaceful competition to determine the technologies that will power the 21st century.  From China to India, from Japan to Germany, nations everywhere are racing to develop new ways to producing and use energy.  The nation that wins this competition will be the nation that leads the global economy.  I am convinced of that.  And I want America to be that nation.  It's that simple.  (Applause.)

That's why the Recovery Act that we passed back in January makes the largest investment in clean energy in history, not just to help end this recession, but to lay a new foundation for lasting prosperity.  The Recovery Act includes $80 billion to put tens of thousands of Americans to work developing new battery technologies for hybrid vehicles; modernizing the electric grid; making our homes and businesses more energy efficient; doubling our capacity to generate renewable electricity.  These are creating private-sector jobs weatherizing homes; manufacturing cars and trucks; upgrading to smart electric meters; installing solar panels; assembling wind turbines; building new facilities and factories and laboratories all across America.  And, by the way, helping to finance extraordinary research.

In fact, in just a few weeks, right here in Boston, workers will break ground on a new Wind Technology Testing Center, a project made possible through a $25 million Recovery Act investment as well as through the support of Massachusetts and its partners.  And I want everybody to understand -- Governor Patrick's leadership and vision made this happen.  He was bragging about Massachusetts on the way over here -- I told him, you don't have to be a booster, I already love the state.  (Applause.)  But he helped make this happen.

Hundreds of people will be put to work building this new testing facility, but the benefits will extend far beyond these jobs.  For the first time, researchers in the United States will be able to test the world's newest and largest wind turbine blades -- blades roughly the length of a football field -- and that in turn will make it possible for American businesses to develop more efficient and effective turbines, and to lead a market estimated at more than $2 trillion over the next two decades.

This grant follows other Recovery Act investments right here in Massachusetts that will help create clean energy jobs in this commonwealth and across the country.  And this only builds on the work of your governor, who has endeavored to make Massachusetts a clean energy leader -- from increasing the supply of renewable electricity, to quadrupling solar capacity, to tripling the commonwealth's investment in energy efficiency, all of which helps to draw new jobs and new industries.  (Applause.)  That's worth applause.

Now, even as we're investing in technologies that exist today, we're also investing in the science that will produce the technologies of tomorrow.  The Recovery Act provides the largest single boost in scientific research in history.  Let me repeat that:  The Recovery Act, the stimulus bill represents the largest single boost in scientific research in history.  (Applause.)  An increase -- that's an increase in funding that's already making a difference right here on this campus.  And my budget also makes the research and experimentation tax credit permanent -- a tax credit that spurs innovation and jobs, adding $2 to the economy for every dollar that it costs.

And all of this must culminate in the passage of comprehensive legislation that will finally make renewable energy the profitable kind of energy in America.  John Kerry is working on this legislation right now, and he's doing a terrific job reaching out across the other side of the aisle because this should not be a partisan issue.  Everybody in America should have a stake -- (applause) -- everybody in America should have a stake in legislation that can transform our energy system into one that's far more efficient, far cleaner, and provide energy independence for America -- making the best use of resources we have in abundance, everything from figuring out how to use the fossil fuels that inevitably we are going to be using for several decades, things like coal and oil and natural gas; figuring out how we use those as cleanly and efficiently as possible; creating safe nuclear power; sustainable -- sustainably grown biofuels; and then the energy that we can harness from wind and the waves and the sun.  It is a transformation that will be made as swiftly and as carefully as possible, to ensure that we are doing what it takes to grow this economy in the short, medium, and long term.  And I do believe that a consensus is growing to achieve exactly that.

The Pentagon has declared our dependence on fossil fuels a security threat.  Veterans from Iraq and Afghanistan are traveling the country as part of Operation Free, campaigning to end our dependence on oil -- (applause) -- we have a few of these folks here today, right there.  (Applause.)  The young people of this country -- that I've met all across America -- they understand that this is the challenge of their generation.

Leaders in the business community are standing with leaders in the environmental community to protect the economy and the planet we leave for our children.  The House of Representatives has already passed historic legislation, due in large part to the efforts of Massachusetts' own Ed Markey, he deserves a big round of applause.  (Applause.)  We're now seeing prominent Republicans like Senator Lindsey Graham joining forces with long-time leaders John Kerry on this issue, to swiftly pass a bill through the Senate as well.  In fact, the Energy Committee, thanks to the work of its Chair, Senator Jeff Bingaman, has already passed key provisions of comprehensive legislation.

So we are seeing a convergence.  The naysayers, the folks who would pretend that this is not an issue, they are being marginalized.  But I think it's important to understand that the closer we get, the harder the opposition will fight and the more we'll hear from those whose interest or ideology run counter to the much needed action that we're engaged in.  There are those who will suggest that moving toward clean energy will destroy our economy -- when it's the system we currently have that endangers our prosperity and prevents us from creating millions of new jobs.  There are going to be those who cynically claim -- make cynical claims that contradict the overwhelming scientific evidence when it comes to climate change, claims whose only purpose is to defeat or delay the change that we know is necessary.

So we're going to have to work on those folks.  But understand there's also another myth that we have to dispel, and this one is far more dangerous because we're all somewhat complicit in it.  It's far more dangerous than any attack made by those who wish to stand in the way progress -- and that's the idea that there is nothing or little that we can do.  It's pessimism.  It's the pessimistic notion that our politics are too broken and our people too unwilling to make hard choices for us to actually deal with this energy issue that we're facing. And implicit in this argument is the sense that somehow we've lost something important -- that fighting American spirit, that willingness to tackle hard challenges, that determination to see those challenges to the end, that we can solve problems, that we can act collectively, that somehow that is something of the past.

I reject that argument.  I reject it because of what I've seen here at MIT.  Because of what I have seen across America.  Because of what we know we are capable of achieving when called upon to achieve it.  This is the nation that harnessed electricity and the energy contained in the atom, that developed the steamboat and the modern solar cell.  This is the nation that pushed westward and looked skyward.  We have always sought out new frontiers and this generation is no different.

Today's frontiers can't be found on a map.  They're being explored in our classrooms and our laboratories, in our start-ups and our factories.  And today's pioneers are not traveling to some far flung place.  These pioneers are all around us -- the entrepreneurs and the inventors, the researchers, the engineers -- helping to lead us into the future, just as they have in the past.  This is the nation that has led the world for two centuries in the pursuit of discovery.  This is the nation that will lead the clean energy economy of tomorrow, so long as all of us remember what we have achieved in the past and we use that to inspire us to achieve even more in the future.

I am confident that's what's happening right here at this extraordinary institution.  And if you will join us in what is sure to be a difficult fight in the months and years ahead, I am confident that all of America is going to be pulling in one direction to make sure that we are the energy leader that we need to be.

Thank you very much, everybody.  God bless you.  God bless the United States of America.  (Applause.) 

END                

1:03 P.M EDT

WASHINGTON, D.C. - Vice President Biden today unveiled Recovery Through Retrofit, a report that builds on the foundation laid in the Recovery Act to expand green job opportunities and boost energy savings by making homes more energy efficient.  Joining the Vice President today were Nancy Sutley, Chair of the White House Council on Environmental Quality; Steven Chu, Secretary of Energy; Hilda Solis, Secretary of Labor; Shaun Donovan, Secretary of Housing and Urban Development; and Karen Mills, Administrator of the Small Business Administration.

At a Middle Class Task Force meeting earlier this year, the Vice President asked the White House Council on Environmental Quality (CEQ) to develop a proposal for Federal action to lay the groundwork for a self-sustaining home energy efficiency retrofit industry. In response, CEQ facilitated a broad interagency process with the Office of the Vice President, eleven Departments and Agencies and six White House Offices to develop recommendations for how to use existing authority and funding to accomplish this goal.  These recommendations are described in detail in the Recovery Through Retrofit Report. 

“Recovery Through Retrofit is a blueprint that will create good green jobs – jobs that can’t be outsourced, and jobs that will be the cornerstones of a 21st-Century economy,” said Vice President Biden. “And, thanks to the Recovery Act’s unprecedented investments in energy efficiency, we are making it easier for American families to retrofit their homes - helping them save money while reducing carbon emissions and creating a healthier environment for our families.”

“This report builds on the foundation laid in the Recovery Act to expand green job and business opportunities for the middle class while ensuring that the energy efficiency market will thrive for years to come,” said Nancy Sutley, Chair of the White House Council on Environmental Quality.  “An aggressive program to retrofit American homes and businesses will create more work, more savings, and better health for middle class Americans.”

Existing techniques and technologies in energy efficiency retrofitting can reduce energy use by up to 40 percent per home and lower total associated greenhouse gas emissions by up to 160 million metric tons annually.  Retrofitting existing homes also has the potential to cut home energy bills by $21 billion annually.  Yet, despite the real energy cost savings and environmental benefits associated with improving home energy efficiency, a series of barriers have prevented a self-sustaining retrofit market from forming.  These barriers include a lack of access to information, financing and skilled workers.

The recommendations and actions in this Report have been carefully designed to help overcome these barriers and to leverage Recovery Act funding to help ensure that the energy efficiency market will thrive long after the Recovery Act money is fully spent.  

Some recommendations in the report include:

• Provide American Homeowners with Straightforward and Reliable Home Energy Retrofit Information:  Consumers need consistent, accessible, and trusted information that provides a reliable benchmark of energy efficiency and sound estimates of the costs and benefits of home energy retrofits. 

• Reduce High Upfront Costs, Making Energy Retrofits More Accessible:  Access to retrofit financing should be more transparent, more accessible, repayable over a longer time period, and more consumer-friendly. 

• Establish National Workforce Certifications and Training Standards:  A uniform set of national standards to qualify energy efficiency and retrofit workers and industry training providers will establish the foundation of consumer confidence that work will be completed correctly and produce the expected energy savings and benefits.  Such standards should incorporate healthy and environmentally friendly housing principles, as outlined in the report titled, the Surgeon General’s Call to Action To Promote Healthy Homes (2009).  Proper certification and training standards will ensure that retrofitted homes are healthy homes.  Consistent high-level national standards will spur the utilization of qualified training providers that offer career-track programs for people of all skill levels, promote and expand green jobs opportunities and facilitate the mobilization of a national home retrofit workforce.

To read the full report and recommendations, please go to http://obamawhitehouse.archives.gov/assets/documents/Recovery_Through_Retrofit_Final_Report.pdf

“As Secretary of Labor I'm working to help build the clean energy economy of tomorrow by investing in our workers today," said Secretary Solis "Training for green jobs can empower workers to climb the career ladder, sustain a family and provide a secure retirement. Through Recovery through Retrofit, we're committing to meet the needs of workers, employers and homeowners, so we can shape our clean energy future into one that supports working families and is inclusive of the diversity of our nation.”

"I am proud to join my colleagues today in announcing Recovery through Retrofit," said Secretary Donovan. "It will allow us to work closely together to remove barriers to creating more energy efficient homes for American families.  This initiative will not only lead to cost savings for homeowners and reduce negative environmental impact, but will also be a powerful vehicle for economic recovery by creating quality middle class jobs and lasting neighborhood benefits. This is another demonstration of HUD's commitment to creating jobs for the new economy in high growth industries by encouraging and investing in “green” building and energy retrofits."

"This initiative will not only result in considerable cost savings for homeowners on their energy bills, but also put resources in the hands of green sector small businesses who will in turn create good-paying jobs in communities across the country," said SBA Administrator Mills.

EPA Administrator Lisa Jackson, who was unable to attend this event due to travel added, “This is the Recovery Act at work.  Communities will benefit from good jobs, families will benefit from lower energy bills, and we will all benefit from reduced air pollution and a growing green economy. Our Energy Star program can help families cut up to 30% off their energy bills -- saving the average household more than $700 a year through efficiency investments.  EPA is proud to be working with all of our partners to help people save money when they need it the most, and build a new foundation for prosperity through a growing green economy.”

The Department of Energy today also announced $454 million under the American Recovery and Reinvestment Act for energy efficiency efforts nationwide.
The Department is now accepting applications for a new $390 million "Retrofit Ramp-Up" program that will deploy innovative approaches to energy efficiency building retrofits. These Recovery Act funds will help create new partnerships to deliver energy bill savings to entire neighborhoods and towns.  Bringing energy retrofits to whole neighborhoods at a time will simplify the process for homeowners and significantly reduce costs. When applied on a national scale, the program could save billions of dollars annually in utility bills for households and businesses and create thousands of jobs across the country. In addition, the Energy Department announced $64 million in energy efficiency funding for cities, counties, and Indian tribes.

"The Retrofit Ramp-Up initiative is designed to slice through the barriers identified in this report - inconvenience, lack of information, and lack of financing - and to make energy efficiency easy and accessible to all," said Secretary Chu.  "We want to make our communities more energy efficient, block by block, neighborhood by neighborhood -- eventually expanding to entire cities and states.  We can literally bring energy efficiency to the doorsteps of the American people."

Separately, the Department of Energy will accept state proposals to use State Energy Grant or Energy Efficiency Conservation Block Grant funds for Property Assessed Clean Energy (PACE) pilots.  This is an innovative model which allows communities to provide financing to homeowners to install renewable energy systems and retrofit buildings that can be paid off over time on their property tax bills.  Today, the White House is announcing a “Policy Framework for PACE Financing Programs” developed through an interagency process to ensure that effective homeowner and lender safeguards are included in PACE programs. 

To read the framework, please go to

http://obamawhitehouse.archives.gov/assets/documents/PACE_Principles.pdf

To ensure implementation of the Recovery Through Retrofit Report’s recommendations, CEQ will continue to convene an interagency Energy Retrofit Working Group which will be co-chaired by the Department of Energy, the Environmental Protection Agency, the Department of Housing and Urban Development, the Department of Labor, and the Department of Agriculture. 

The group will track the progress of the Report’s recommendations, develop additional strategies to support expansion of the retrofit market, including recommendations for rental housing, and operate as the single point of contact for the implementation of this effort.   Within thirty days, the group will submit an implementation plan to the Vice President.  Moreover, the group will report to the Vice President regularly on its progress toward implementing each of the recommendations identified in the Report.