The American Society of Civil Engineers gave America’s energy infrastructure a D+ in its most recent report card because the United States relies on an aging electrical grid and pipeline distribution systems.

The ASCE’s 2013 Report Card for America’s Infrastructure raised concerns about the capacity to meet future demand, conditions, funding,  operation & maintenance, public safety and innovation.

“While demand for electricity has remained level, the availability of energy in the form of electricity, natural gas, and oil will become a greater challenge after 2020 as the population increases,” ASCE wrote. The good news is that agencies have initiatives to raise ASCE’s grade creating an opportunity for government contractors to step in and help.

State & Local Agencies Invest in Smart Grid Designs and Energy-Efficient Systems

In light of the bad U.S. grade, state and local governments are indeed planning to improve their infrastructures. When searching for government contract opportunities (bids & RFPs) related to the design and engineering of efforts to tackle the aging electrical grid in Onvia’s Project Center, we found that agencies are investing. In 2014 alone, state and local governments released 2,180 engineering and design bids & RFPs related to smart grid and energy efficiency.

One state that is leading the way in procurement activity is California. The Golden State, including all of its cities and counties, released 20% of all bids and RFPs related to smart grid design and engineering and awarded 36% of reported contract awards in 2014. Additionally, a 2014 report from GridWise Alliance and Smart Grid Policy Center provides further evidence that California is a leader in smart grid efforts, finding that the state has one of the nation’s most aggressive policies around renewable energy.

Released an RFP in August 2014 for strategic planning, technology road-mapping for implementing energy research and development, and evaluating and refining the district’s Energy Research and Development Department’s strategic plans in “technology areas such as renewables, climate change, electric transportation, smart grid, distributed generation, storage, energy efficiency and demand response.” SMUD estimated the value of the one-year contract at $500,000.

It’s not all California though, here’s one energy infrastructure improvement example in the Midwest.

Awarded a one-year, $285,100 contract in September 2014 to Inova Energy Group LLC to create a new Missouri Comprehensive Statewide Energy Plan. The state’s energy plan has not been updated since 1992. The new plan will recommend policies to meet the state’s short-term and long-term needs for clean and reliable energy, while encouraging efficient use of energy.

Environmental Impact is a Key Consideration

When issuing smart grid-related planning opportunities, state and local governments are focused on environmental impact as well. In 2014, 69% of bids and RFPs were related to the environmental impact of smart grids.

Issued a bid for an energy management system for their smart grid in May 2015. The system will provide effective energy efficiency and demand response options in order to help customer’s manager costs, risks reliability and environmental impacts. EPB is requesting that the energy management system include a customer web portal, a home area network gateway, a thermostat and load control devices.

Concern for National Security Comes with the Smart Grid Territory

The ASCE warned in its report that state and local governments have to consider the threat of cyberattacks with the shift to automated, dynamic grid networks, wires, substations, transformers and switches.

“Protecting the nation’s energy delivery systems from cyberattacks and ensuring that these systems can recover is vital to national security and economic well-being,” ASCE wrote.

Issued a bid in December 2014 for consulting services related to its Smart Grid Reference Architecture. The scope of work states that the winning contractor must identify all IT security requirements and define security processes and roles – including access, firewalls, monitoring and controls. Responding vendors must also have personnel with specific cybersecurity training.

A recent article by Jeff St. John at Greentech Media discusses security concerns that have come to the forefront in California’s smart grid efforts, specifically around how much data needs to be shared between public utilities and private corporations like SolarCity in order to properly overhaul the grid. Though the article discusses California’s efforts, the concerns are likely relevant to other smart grid investments around the country.

“California's utilities have cited security, privacy and procedural concerns about turning over so much internal data to outside parties,” writes St. John.

In addition, St. John also provides examples of what can happen when security isn’t taken into consideration: “Utilities are under pressure to protect the grid from terrorist attacks, whether they’re physical attacks like that perpetrated by an unknown gunman on a PG&E substation in 2013 or cyber-intrusions aimed at stealing data or disrupting utility control networks.”

This concern for keeping the smart grid secure means that government contractors offering IT consulting and security services also have an important role to play.

Forecasting Smart Grid & Energy-Efficiency Spending

Looking ahead, Onvia’s Spending Forecast Center shows that California agencies have released 32% of all agency plans and budgets related to future energy infrastructure improvement. More specifically, these budgets are concentrated at the local levels of government, with cities, towns and counties representing 59% of all planned smart grid spending.

Plans to spend an estimated $11 million from 2016-2019 on implementing its Smart Grid Road Map. The city wants to gain more efficient use of aging infrastructure, integration of distributed energy resources and accommodation of battery-charging demands, among other goals.

Key Takeaways

State and local governments are investing in smart grid improvements, energy efficient power systems and other smart infrastructures. Vendors will find that most related solicitations are being issued at the city level followed by the state level. To start, contractors should look for opportunities in California, a state that benefits from strong renewable energy policies and is a clear leader in issuing solicitations and awarding contracts related to energy efficiency & smart grid design and engineering. IT contractors that offer security consulting services will also find opportunities from agencies that are looking to keep their smart grid efforts immune from attack.