Department Of Energy Report Indicates Companies In Play For Big Contracts

Ten years after a power outage that left ten of millions of Americans without energy, the Department of Energy and White House Council of Economic Advisors published a report on energy grid stability Monday.

Specifically the report explores the need to increase power grid resilience when faced with adverse weather conditions: “Scientific research predicts more severe hurricanes, winter storms, heat waves, floods and other extreme weather events being among the changes in climate induced by anthropogenic emissions of greenhouse gases.”

Each year, weather related power outages cost the United States anywhere from 18 to 33 billion dollars in lost wages, output, spoiled inventory and the cost of restarting industrial operations. To combat these expenses, the president allocated $4.5 billion for grid stability in 2011.

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The newly released report highlights several strategies to optimize resilience. Because most outages occur alongside distribution centers, relocation to more secure areas and preparing plants for hurricane winds is a key strategy. Construction, steel and concrete companies are expected to see the biggest benefit from these initiatives.

Above ground utility lines are also a prime point of weakness. Burying these lines cost between $500,000 and $2,000,000 per mile which is why the Department of Energy suggests replacing the current system with steel or concrete. If committed to this plan, commodity prices should jump with miners and refiners seeing a huge increase in activity and construction companies reaping some benefit.

The report also highlights the need for energy storage. This would reduce production during periods of high demand, but will be especially difficult to utilize with renewable energy. Enterprise software companies and energy control system producers will both seek lucrative government contracts.