Cisco: Smart Grid Will Be $20 Billion-A-Year Business


As members of President Barack Obama's Cabinet met with more than 70 executives from utilities, manufacturers, telecommunications and IT firms Monday to lay out creation of the so-called "smart grid," Cisco Systems outlined its own strategy for delivering an "end-to-end, highly secure network infrastructure" to help utilities and energy consumers manage energy more efficiently.

"Networking technology will serve as the platform of a smart, more secure energy grid for the 21st century," said Cisco CEO John Chambers in a statement. "Cisco is uniquely positioned to provide a converged Smart Grid communications fabric and to assist our utility customers with the kind of business transformation that will enable the efficient, effective transmission of energy and deliver entirely new, environmentally friendly services to consumers."

"Smart grid" refers to the next-generation electric grid that will, according to the president, be more efficient and rely on IT to regulate the country's energy consumption. Energy Secretary Steven Chu and Commerce Secretary Gary Locke kicked off a two-day summit with energy experts by reiterating to reporters that the smart grid was a top priority for the Obama administration. Funding for smart grid infrastructure in the U.S. is a key component of the American Recovery and Reinvestment Act (ARRA).

"We made very clear that accelerating the standards' development is an urgent national priority if we are to realize what everyone calls a smart grid," Locke said to reporters outside of the White House, according to The Wall Street Journal and other reports from the briefing.

According to reports, the Obama administration has also increased the maximum award available through ARRA's Smart Grid Investment Grant Program from $20 million to $200 million, and the Smart Grid Demonstration Projects from $40 million to $100 million.

Cisco itself noted in a statement that it expects the Smart Grid communications infrastructure market to be a $20-billion-a-year business within half a decade, and cited figures from the GridWise Alliance saying smart grid work will generate about 280,000 jobs in various categories. Cisco also cited data from Electrical Power Research Institute (EPRI) saying the smart grid could reduce greenhouse gas emissions in the U.S. equivalent to 60 to 211 million metric tons of carbon dioxide by 2030.

Cisco's smart grid strategy includes a transmission and distribution automation solution that includes Cisco switches and routers and what the company calls solutions for "efficient, IP-based backhaul communications for smart meters." Cisco's EnergyWise solutions, which the company debuted back in January, are in place to help businesses manage their own energy concerns. Cisco's strategy also includes secure architecture, data center and life-cycle services.

Cisco has also unveiled two city-specific smart grid projects, including "Energy Smart Miami" -- a collaboration with General Electric, Florida Power & Light and Silver Spring Networks to bring a smart grid to Miami. It also launched the "Pecan Street Project," a collaboration with Austin, Texas, and the Environmental Defense Fund to make Austin a "virtual laboratory" for the clean energy needed to support smart grids nationwide.

"Creating a smart, secure infrastructure for the 21st century is critical to the United States' energy and environmental future," said Todd Arnold, senior vice president of Smart Grid and Customer Systems at Duke Energy, in a statement. "We look forward to working with Cisco to build out a Smart Grid that will create jobs, improve energy efficiency and create options for consumers in the areas that we support across the Midwest and the Carolinas."