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Environmental Impact By relying on a smart grid, the United States will significantly reduce its emissions of GHG as well as toxic pollutants such as nitrogen oxide, sulfur oxide, and particulates. The electricity sector alone emits 40 percent of all the carbon dioxide produced, twice as much as the transportation sector. If the grid were only 5 percent more efficient, the energy savings would be equivalent to permanently eliminating the fuel and greenhouse gas emissions from 53 million cars.41 Barriers While cost and technological barriers stand in the way of swift smart grid deployment, the main obstacles are a confusing patchwork of regulations and powerful existing business interests. First and foremost, the advancement of large grid projects across regions and states is a regulatory challenge. Federal, regional, state, and municipal agencies must all have their say and, depending on the nature and location of the project, some may opt to delay its progress. This is not only a bureaucratic problem but an economic one, because it deters private investors. At the same time, investor-owned utilities serve roughly 74 percent of domestic consumers.42 These entities often have no incentive to improve their transmission efficiency. Current ratemaking structures reward them for producing more energy. Producing and transmitting less energy, on the other hand, will cause their sales to drop without any offsetting benefit to the utility and its shareholders. Thus they continue to rely on old technologies, which in many cases were developed long before microprocessors were invented, reaping profits from sunk investments. In addition, the advent of the smart grid, while beneficial to the economy and society as a whole, threatens the status of existing privately owned utilities as the industry moves from a centralized, producer-controlled network to one that is less centralized and more consumer-interactive. These issues make the development of a nationwide smart grid, which some sources say might cost $1.5 trillion43 over the next 20 years, a huge economic and political challenge. Potential Role and Implications A smarter grid is the essential building block of a future energy economy. It will allow the United States to fully realize its renewable energy potential by enabling the seamless integration of distributed generation technologies and making long-distance transmission of electricity practical. At the same time, it will dramatically increase the efficiency of our antiquated electricity infrastructure and stimulate growth in all sectors of the economy that depend on electricity. 94PDF Image | Shaping Energy Technology Transition
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