IDG News Service — U.S. President Barack Obama on Tuesday unveiled US$3.4 billion in grants to update the nation's electrical grid, but the benefits could reach to the broadband sector as well, one community broadband adviser said.

The announcement of so-called smart-grid grants to 49 states is focused on creating a more efficient and reliable electric system in the U.S. However, the backbone of the smart grid, which uses digital technology to deliver electricity and control use, will be an Internet Protocol-based network, and the result could mean new broadband deployment in some areas, said Craig Settles, a broadband analyst and president of consulting firm Successful.com.

The money for the smart-grid deployments comes from the American Recovery and Reinvestment Act, a $787 billion economic stimulus package passed by the U.S. Congress in February. The legislation included $11 billion for smart-grid projects, and also included $7.2 billion for broadband deployment to rural and other unserved areas.

"The interdependencies and mutual influences of smart grid and broadband technologies should enable both grant programs to have a greater payback for their respective awardees," Settles said in an e-mail. "All of the things people are talking about doing with smart grid, such as moving "green" energy from windmill farms and proactively managing energy usage, require at some point a fast data connection. That means fiber (the ideal) or possibly super-fast fixed wireless."

The smart grid will include a smart-meter monitoring device paired with electricity meters at buildings. That device will collect data on energy use, as well as control many of the electrical appliances in the building, Settles said.

Those devices will need to connect back to the electric utility through an IP network.

With that in mind, smart grid and broadband applicants can work together, or piggyback on each other's networks, Settles said.

"A community's fiber network can provide the backhaul for this [smart-grid] data," he said. "Or a utility can build its own fiber backhaul and determine how to make that fiber available for local government and other institutions for their use. It's cheaper to expand than to build from scratch."

The Electric Power Research Institute estimates smart-grid technologies could reduce electricity use by more than 4 percent by 2030. One-hundred private companies, utilities, manufacturers, cities and other partners received the smart-grid grants Tuesday.

About $1 billion of the grants will go toward energy-savings projects by focusing on creating smart-grid infrastructure and expanding access to smart meters, the U.S. Department of Energy (DOE) said in a press release. Smart meters will allow electricity consumers to save money by programming smart appliances and equipment to run when rates are lowest.

Another $2 billion will go toward integrating so-called smart components into smart grids. The money will go toward integrating smart meters, smart thermostats and appliances, automated substations, plug-in hybrid electric vehicles and renewable energy sources, the DOE said.

The Obama administration expects the smart-grid grants to create "tens of thousands" of jobs across the U.S., the DOE said.