Published: November 3, 2010

Most people do not know about the troubles regarding the U.S. energy grid. In the near future there will be many changes to the U.S. electric power system and how it is implemented.

I was in Mechanicsburg, Pa., for a couple of days. Mechanicsburg is nestled amid rolling hills and cornfields in the middle of Pennsylvania. And no, I wasn't visiting the Navy's Ships Parts Control Center, located here. Nice guess, though.

I was attending a two-day conference on electric power. The conference is sponsored by the Pennsylvania Bar Institute, the educational arm of the Pennsylvania Bar Association. Basically, it's continuing legal education (CLE), which I still attend despite my current status as a recovering attorney.

This conference was not an investment seminar. That is, the difference between CLE and an investment seminar is that nobody there was trying to sell me anything. It's just a bunch of top-level energy professionals talking to other top-level energy professionals.

Thus, I got to sit back and listen to a series of world-class lawyers, engineers and energy economists talking about the astonishing changes that are occurring in the U.S. and Canadian energy grid.

One key theme of this conference was the rapid national build-out of the so-called "smart grid," which is occurring all around us. Wow, there's serious planning, money and technology going into smart grid. Yet according to national surveys, most people have barely heard of the term, let alone know what it means. The smart grid is big science, big engineering, big technology and really big money.

The inside joke is that if Thomas Edison came back today, he'd look around and pretty much understand completely how the U.S. electric power system works. That's the problem. It highlights how little things have changed over the past 100 years.

But with the smart grid? The smart grid is utterly transformational. It'll be like grafting an energy equivalent of the Internet onto the electric power lines of the nation. It's a dramatic move toward enabling energy markets to work more efficiently, from the standpoint of the consumer, the producer and the distributor.

In a sense, the smart grid is being driven by the same forces that are causing much other change in the energy and resource economies of the world. The rise of China and India is altering everything.

Due to rising global demand, there's increasing scarcity of energy and materials across the world. It means high prices for the good stuff. And that means we can no longer afford - in any sense of the word - to do business with the old energy and material models of our youth, let alone of our parents' and grandparents' time.

Another theme at the power conference is the rapid growth of alternative energy systems - the usual suspects being wind, solar, geothermal and hydro. Plus, if you're going to do alternative energy, you have to have lots of well-functioning storage.

Overall, the alternative energy sources are well-known investment ideas to longtime subscribers of Agora Financial newsletters. If you ever attend the Agora Financial conference in Vancouver, held every July, you get an earful of alternative energy discussion as well.

But longtime readers also know that alternative energy systems are, at best, a small part of the total energy equation - under 5% on the good days. For big energy supplies to run entire countries, for now - and far into the future - it's coal, oil, natural gas and nuclear.

Still, there's serious money going into the alternative plays.

-- Byron King
Contributing Writer
Whiskey and Gunpowder

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Note: This article originally appeared on Penny Sleuth