A requirement for matching funds brought in a total of $1.6 billion to be invested in smart grids. In a first round of grants, 100 organizations were selected in late October to share $3.4 billion in federal funds to accelerate deployment of smart electric grids. Those programs included a wide range of projects spanning 49 states.

Altogether, observers estimate about $8 billion in public and private funds have now been committed to smart grid projects. That's about five percent of what will be needed to transition the U.S. grid to a digital power network.

"These demonstration projects will further our knowledge and understanding of what works best and delivers the best results for the smart grid, setting the course for a modern grid that is critical to achieving our energy goals," said Steven Chu, secretary of the Department of Energy, in a prepared statement.

The Electric Power Research Institute estimates that implementing a smart grid could reduce electricity use by more than four percent by 2030, a savings of $20.4 billion annually.

"We're looking forward to the data these projects get about what really works and where the gaps are," said Katherine Hamilton, president of the GridWise Alliance, an ad hoc coalition of organizations promoting the smart grid.

The funding awards were divided into two topic areas. Sixteen awards totaling $435 million will support end-to-end smart grid demonstrations in 21 states. Another 16 awards for a total of $185 million will help fund utility-scale energy storage projects that support renewable sources such as solar and wind.

The largest award was an $88.8 million grant that will fund a demonstration system spanning five states in the Pacific Northwest. It will serve 60,000 customers and provide two-way communications between distributed power generators, storage units and substations.

The group had already announced details of its proposal which includes partnerships with vendors such as 3Tier Inc., Areva USA, IBM, Netezza Corp., and a team of QualityLogic, Inc. and the Drummond Group, Inc.

An Ohio utility won the second largest grant, a $75 million award. It will serve 110,000 users and use 13 different technologies from the substation to the consumer, including distribution automation.