HardAssetsInvestor

Written by Julian Murdoch  |

November 02, 2009

Smart Investing In Smart Grid

Details

• $3.4 billion in grants: Who won?
• Ways to play: stocks vs. ETFs
• Smart grid's ‘ripple effect’ on energy demand

President Obama made the overhaul of the nation's electrical infrastructure a vocal part of his 2008 campaign. In an interview with MSNBC's Rachel Maddow just days before the election, he outlined his promise of involvement:

Last week, the administration finally made good on its promises, announcing an award of $3.4 billion in grant money to 100 cities, utilities, equipment makers, systems developers and other organizations around the country (out of 390 applications). The grants were awarded in six different project areas: advanced metering infrastructure, customer systems, electric distribution systems, electric transmission systems, equipment manufacturing  and integrated and/or crosscutting systems.

Ranging in size from just under $400,000 to $200 million, each grant represents only a fraction of the proposal's estimated cost. But in every case, there are matching resource commitments from other sources, bringing the actual fully funded investment from the program to over $8 billion.

Source: U.S. Department of Energy

The projects are all over the map—both literally and figuratively. Rather than a government handout to a few obvious, entrenched players, the funding will be sprinkled across multicompany collaborations and private/public partnerships.

In particular, the money will buy millions of smart electric meters at a hodgepodge of utilities, pushing new tech into the field and even newer tech out of the lab and into commercial testing. Some awards even fund security research on how to prevent terrorist attacks on this new smart grid.

With all of these new projects starting, what's it mean for commodity investors?