The smart grid stirring up a debate about public/private responsibility

by / Wednesday, 06 April 2011 / Published in Smartgrid-CI Blog

It is maybe just a coincidence or maybe it is because next year is election year but the debate about the public/private responsibility on the smart grid gained a lot of traction in these past few days.

Interestingly enough, the initiative is not coming only from the public sector or the government but also from the private sector.

The debate was triggered by President Obama’s weekly address on gas and energy security, last week.

In a column published a few days later by the Council for Foreign Relations, four business and policy leaders reminded us how important it is for the US to renovate its infrastructure especially when facing the competition of fast growing emergent economies such as China, Brazil or Russia that are building most of their infrastructure from scratch or from Europe or Japan that have been much better at maintaining theirs.

How much would it cost? Trillion of dollars thinks Felix Rohatyn, Lazare Frères’ Chairman and CEO, including 1.6 trillion for the road and bridge network only, much more if we add the ports, the airports, the railroad, the telecom network and…the grid. A report published a few weeks ago mentioned $90B in the next ten years for the US grid only. What would be the best model for such a gigantic task? Will we need to create a dedicated financial institution as proposed by Rohatyn; A mega financial behemoth that will be able to leverage a trillion dollars? Or can we rely on improved private/public partnership as suggested by Stephen Goldsmith, New York City Deputy Mayor for Operations.  

Some experts go even further than Rohatyn in stressing the need government full involvement. Jeremy Hsu proposes to set up for the smart grid a specific program similar to the Apollo or Manhattan projects. This would mean much stronger government involvement than Rohatyn’s proposal because an “Apollo” type of approach means that the government is not just financing the operation but also managing it with the risk, some may fear, to carry and implement a political agenda along the way. This is certainly not the option suggested by the Global Smart Grid Federation (GSGF), an international organization dedicated to promoting best practices and accelerating the deployment of smart grid around the world.

For Guido Bartels, GSFS’s chairman and IBM’s smart grid leader, the government should be involved at the pilot phase of the smart grid projects and should also be very active in defining standards.

No matter the choice what is at stake, according to journalist Nino Marchetti, is better environment for all, new jobs and the reaching energy independence. For that, we may not need government involvement but, at least, a clear Strategy supported by bi-partisan consensus.

(All the stories referred to in this column were published in Smartgrid-CI in the past three days along nearly 200 other smart grid stories.)
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