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Obama's Large Scale Investment

Published 01/09/09 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

On Thursday, President-elect Barack Obama called for large-scale investment to reinvent and modernize the nation's outdated and inefficient electricity grid, but did not specify how much the government would be willing to shell out.

"We'll also do more to retrofit America for a global economy," Obama said. "That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation."

Advocates of a “smart grid” system claim that it would better handle distribution of more efficient forms of energy such as wind power. The system would also save consumers money on energy bills in the long run; drastically reduce the need for costly capital investments on new power plants, substations and power lines; and provide incentives to conserve and greatly reduce greenhouse gas emissions.

A “smart grid” system would better manage the flow of electricity by digitizing its transmission through computers and sensors in homes, businesses and schools. The new technology would allow power companies to communicate directly with customers and would make it possible to regulate and control appliances remotely.

Advocates say that despite the high initial costs, the possibilities for job creation and cost-saving outweigh the start-up costs.

"Investing in alternative energy, focusing on conservation and rebuilding our power grid to deliver that energy to every corner of our country are critical components of this effort," Billionaire oil investor T. Boone Pickens said in a statement.

Estimates say it would cost at least $50 billion over the course of the next 10 to 20 years to equip investor-owned power companies with the technology. Home installments of smart meters would cost roughly $200 each.

Despite the costs, the plan has the potential to put many Americans to work and reignite American manufacturing if the plan includes a “buy America” clause that stipulates that a government contractor must purchase American-made products.

Source Bloomberg News:

For years we've been hearing about the nation's crumbling and outdated electricity grid.

The 2003 blackout that plunged 50 million people into darkness was a wake-up call. Then this summer T. Boone Pickens, who's planning on investing billions in building wind farms, called for massive investments to revamp our nation's aging grid, so that it can handle wind power distribution.

On Thursday, President-elect Barack Obama called for a similar investment, perhaps billions, to begin work on a new "smart" electric grid to replace the nation's old, fragmented and inefficient system.

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