Cool City: Getting Down With the Grid

Pecan Street Project seeks $10 million grant

Pecan Street Project booster Brewster McCracken
Pecan Street Project booster Brewster McCracken (Photo by John Anderson)

"I love the Pecan Street Project," someone told Brewster McCracken at a recent event. "But, um, I don't really understand what it is."

Addressing that common predicament, the Clean TX Foundation held an Aug. 26 panel discussion on the project, explaining the tech market and economic development it hopes to generate and how inventing an "energy Inter­net" for alternative power can, in theory, help slow global warming. "You guys are all potential evangelists," moderator Steven Tyndall told the impressively large (and visibly geeky) crowd at City Hall. In a nutshell, the Pecan Street Project is tackling the invention of "the urban power system of the future," one that would work on a citywide scale to use the energy generated by thousands of renewable sources (e.g., rooftop solar panels and plug-in hybrid cars) instead of a few huge ones (e.g., coal plants). Oh, and it needs to compete with dirty coal on price, too.

As McCracken explained it, he sees the project as comparable to the dawn of the Internet. Personal computers couldn't be connected, via the Web, until a uniform system and the right technological tools were invented. Thanks to the Web, we have eBay and Amazon and YouTube. "If we can all agree on the 'rules of the road,' it can explode," said McCracken of energy connectivity. "Once the right devices are in place and participants agree on a standard, then there will be tremendous innovation. All sorts of business will be viable."

McCracken told the crowd that, just that afternoon, he'd turned in an application for a $10.4 million U.S. Department of Energy Smart Grid Demonstration Program grant. (It's still expected that McCracken will serve as the project's executive director, provided issues about his prior PSP work as a City Council member can get ironed out, said the Environmental Defense Fund's Jim Marston, a founding partner in the project.)

The grant project would enable a "smart grid" demonstration community at Mueller, which can test out the Pecan Street Project's innovations – including tools to give customers real-time information and control over their electric and water usage – on the ground. The city's already-committed $14 million in infrastructure improvements at Mueller would serve as the local match. Austin Energy is hoping to invest more than $200 million over five years for smart grid technology; to help fund it, the utility is seeking a separate $113 million federal Smart Grid Investment Grant.

Tyndall, a partner with Baker Botts LLP, said it's the market opportunities of a shifting energy landscape that brought in the heavyweight roster of PSP corporate partners – GE Energy, IBM, Microsoft, Intel, Dell, Oracle, Cisco Systems, Freescale, and Gridpoint – which have put top staff on the project. They see an opportunity to command an early market share of the next big thing – including new products that reduce energy use. "The demand for electricity is projected to increase by as much as 40 percent in the next 20 years," Tyndall noted. That would mean well over 300 new coal plants, unless renewable energy can be made to work on a massive scale. Paul Williamson from IBM noted that "many of the required components haven't yet been invented." IBM believes that "to really move people, you have to address their pocketbooks." For example, "We have to incent new owners of plug-in vehicles to do it at night," not during peak-use hours, by making afterhours kilowatts far cheaper.

Marston said that fighting global warming is the nonprofit's No. 1 motivation. "By 2050, we need 80% reductions in CO2," he said, citing the most recent data and goals. McCrack­en said bluntly, "The ramifications of inaction are pretty stark." While the cultural transformation this represents is undeniably daunting, Marston also emphasized the "good news": As we reduce greenhouse-gas emissions by reducing energy consumption, we lower our energy bills. The Environmental Defense Fund has championed an open platform for projects so that its work can become publicly available for everyone to build on, "and change the world."

Austin Energy is also a founding partner in PSP, said AE chief strategy officer John Baker, because "we're going to fundamentally be operating in a new and different environment. We know that – so how do we prepare?" AE is tackling the fundamental problem, for all utility companies on the planet, of how to stay solvent while encouraging customers to use far less of the product it sells. (Imagine Dunkin' Donuts promoting low-carb diets.) He predicted that "this will become an energy transaction marketplace" where "customers will have many more choices and more complex choices; innovation will come in ways we may not even anticipate."

The economic development aspect brought in the Greater Austin Chamber of Com­merce. Jose Beceiro, the chamber's clean energy initiatives director, said that while Austin has lost a worrisome 25,000 jobs in the tech sector, our national reputation for tech innovation makes the city well-positioned to seize the "huge Pecan Street Project opportunity" to attract new alternative energy companies and "repurpose the high tech work force and infrastructure" (e.g., laid-off workers and shuttered plants). Council Member Randi Shade, who represents the city on the project's board, agreed: "This is something we really should become an early adopter on – it's a natural fit for us." She challenged Austin to discard its old, argumentative "business vs. environmental" paradigm and pull together now to become a national leader. "We're competing with many other U.S. cities for federal grants," she noted.

The culmination of Phase I is fast approaching. Recommendations from the project's 12 action teams for the top-priority projects – and a work plan for accomplishing them – should be released and delivered to City Council by late September. Then Phase II's inventions must begin. AE's Baker said Smart Grid 1.0 will tackle the utility side; Smart Grid 2.0 will address the customer side of the meter, yielding all the private-enterprise opportunities. Together, they "will fundamentally change how we interact with customers – a technological revolution that will come at a very fast pace."

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Pecan Street Project, Brewster McCracken, Austin Energy, global warming, smart grid, Jim Marston

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