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California's Silicon Valley has all the right ingredients to make it a local and national leader in the development of the smart grid and related products, according to an economic analysis released by the Silicon Valley Smart Grid Task Force.

For example, the area boasts a number of technology companies that produce components and services that are essential to the smart grid. Potential growth is not just concentrated on the smart grid industry alone. As more metering devices, sensors and communications technologies are deployed, the volume of data will increase. This will drive new demand for information-technology companies to provide data management, according to the analysis.

Silicon Valley-based companies that can benefit from smart grid growth include Cisco, Oracle, Honeywell, Google and GE.

"For decades, Silicon Valley has been on the forefront of new technologies," Carl Guardino, president and CEO of the Silicon Valley Leadership Group, said in a press release announcing the release of the study. "Increasingly, those new technologies touch the smart grid, and Silicon Valley is reaping the economic benefit of these advances."

The analysis categorizes smart grid-related industries into four sectors: power management and energy efficiency products; energy storage; distributed energy generation (DG); and electricity transmission and distribution.

DG makes up the largest portion of smart grid sector employment, with 59%. Energy storage comes in second, with 17%; power management and energy-efficiency products make up 17%; and the transmission and distribution sector employs 10%.

Growth in the smart grid industry in the Silicon Valley area from 1995 to 2009 has been impressive. During that time, employment in the smart grid sector in the Bay Area has increased 129%, while total employment grew 8%, according to the analysis. Even during the recession from 2008 to 2009, smart grid jobs in the region grew by 4%.

"A central tenet of San Jose's Green Vision is that clean technologies are the economic drivers of the future," Chuck Reed, mayor of San Jose, said in a press release. "This report shows that the future is now and that the smart grid has already begun creating jobs in Silicon Valley."

The Silicon Valley Smart Grid Task Force was launched in 2010, and it commissioned the analysis to see how a national smart grid rollout would affect the Silicon Valley and the Greater Bay Area. The task force is made up of the Silicon Valley Leadership Group, the City of San Jose and Pacific Gas and Electric Co. (PG&E), which is in the midst of upgrading its 10 million gas and electric meters to smart grid technology.

"Investment in the smart grid by PG&E and other utilities nationwide is good for customers, good for Silicon Valley jobs, and good for the Bay Area economy," Chris Johns, president of PG&E, said in a press release. "The smart grid is a part of PG&E's commitment to delivering safe, reliable and affordable energy to our customers."

In addition to PG&E, other utilities and companies are involved in smart grid projects in the region, including the Moffett Park Community Smart Grid Project, which is a public-private partnership developing a fully integrated smart grid in and around Moffett Field in Sunnyvale, Calif. This is home to the NASA Ames Research Center and Lawrence Berkeley National Laboratory (LBNL). Other participants in the projects are the City of Sunnyvale, Google and Juniper Networks.

The analysis also shows that area research and academic institutions are contributing to the development of smart grid technologies. These include the Center for Information Technology Research in the Interest of Society, which is located at the University of California at Berkeley; LBNL's Demand Response Research Center; and the Electrical Power Research Institute.

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