Blog Post

Khosla on Smart Grid Stimulus: Not the Best Use of Funds

Robert Rapier, energy blogger and engineering director for Accsys Technologies, has been poring over an interview that Vinod Khosla did recently with Forbes journalist Elizabeth Corcoran at the Milken Institute (Paul Kedrosky’s video clip here). Khosla and Rapier have a long history of arguing over the ethanol industry (Khosla is bullish on ethanol, while Rapier says Khosla is overhyping ethanol), but in Rapier’s transcription of the interview I just read about Khosla’s stance on the smart grid funds in the stimulus package and his experience with Silver Spring Networks.

Around 36 minutes into the video Khosla says:

The smart grid is a good thing to do. It is very fashionable among environmentalists. . . But if I was asked, the money that was allocated for the smart grid from the stimulus, is that the best use of money? Absolutely not.

He goes on to explain that if he had to pick between a transmission grid (which just builds out power lines for transmission) and a smart grid (which makes the grid responsive) he would pick the transmission grid. A transmission grid is priority one, he says, while a smart grid is valuable but a secondary priority. Hmmm, he has a point, though I don’t think it has to be as “either/or” as he puts it. If anyone has an interesting take on this, leave it in the comments.

But, of course, Khosla has still been looking to invest in smart grid technologies, given smart grid is going to be such a big market. He says he would have absolutely invested in smart grid leader Silver Spring Networks if he had seen the company when it was raising money at a $20 million valuation, but he saw the company closer to a $300 million valuation. We don’t invest at those types of valuations, he says.

7 Responses to “Khosla on Smart Grid Stimulus: Not the Best Use of Funds”

  1. Smart Grid Scam – Rage Against the Machine
    Ken Bosley
    Wind Energy Consultant
    Wind Power Services
    [email protected]
    800 894 6352
    voicemail pager – leave your phone number

    Disconnected starving people can’t use the Smart Grid. There is an electric and gas glut. People won’t be paying for energy at any price. The BGE smart grid scam is the beginning of the end for the worldwide Smart Grid scam. Remember, a wind energy consultant in Maryland stopped the Smart Grid.


    Yuppie scum in McMansions want the smart grid. Spoiled green brats want the smart grid. Geeks want the smart grid toys. Real people don’t need it and can’t use it. You got to have it. You got to do it. You got to want it now. Everybody is getting it. You will save hundreds on your bill. What is next? An Ethernet cable in your belly button and a WIFI nose ring.
    Did someone say depression? Ssssh. Disneyland is empty. No body is buying nothing. The smart grid will solve all your problems. Blow into your smart grid Command Control scene and Uncle Slim Pickens will rev up a windmill for you a thousand miles away to recharge your electric Barbie doll. Not. The Cowboy’s 666 giant windmills are glutting the unused surplus windmill market. Big Hat, no Cattle. Is the closed giant windmill factory in England still occupied by the protesting laid off workers?
    Ontario’s power glut has shut down any more windmill projects. The hundred-year-old grid works fine. Canada sends down power on hot days to New York at the sped of light. There is no power gap. There is a power glut. The smart grid would not have stopped the 2003 black out. The grid operator didn’t blackout a few zip codes first, when they had the chance, as is standard utility procedure to preserve the grid.
    How are we going to pay for the smart grid? What are we supposed to do with it? Think of all the money you are going to save from the smart grid.
    With the home Smart Grid Command Center, you can play Star Trek Mr. Scott and Mr. Sulu routing your last kilowatt-hour from the phasor banks to life support. When the smart grid is about to disconnect you for not paying your bill, just try to tell it to wait another couple of kilowatt hours while you finish cooking your dog on the stove. You ate the last of his dog food yesterday.

  2. Jenn Rodriguez

    Certainly the transmission grid is very important, but what would happen once you had it? Immediately, you’d want to make it smart. Working out Smart Grid technology now means that you can be smarter in where you upgrade your transmission grid first. The Smart Grid also helps reduce demand, which is something that will still be beneficial, even after the transmission grid is improved.

  3. We certainly need improvements in both transmission and distribution, but it is worth noting only one option helps both. Adding more transmission does little, if anything, to benefit the performance of the distribution system downstream. But investing in making the distribution grid smarter goes a long way toward both improving efficient utilization of existing transmission assets, as well as minimizing the need for new transmission infrastructure, which is expensive and challenging to site. BOTTOM LINE: Smart Grid > More Grid