You know green has gone mainstream when military contractors talk about it.

Wednesday, Lockheed-Martin executives will outline the company's strategy with regard to alternative energy, energy storage, and efficiency. (More at this link here. We initially said tomorrow. We regret the error.)

Lockheed, Bechtel and other mainline contractors have long been on our list of alternative energy companies to watch. Although startups often come up with innovative, clever ideas, it will be up to these large outfits to transform the concepts into reality. They are the only ones with the technology, talent, time and money. Lockheed has employees who've spent more time in land use hearings than probably all of the solar startups put together.

So far, Lockheed hasn't seen unimpeded success. It signed, and then cancelled a deal to build at 290 megawatt solar farm with Starwood. Clearly, though, that's not the last deal for the company.

As a result, expect to see green become a barbell market: A lot of small companies competing to get acquired or sign strategic alliances with large companies. And in the middle you'll see First Solar.

The alternative energy ATM is almost depleted.

The Department of Energy has already allocated $32.7 billion of the $36.7 billion in funds given to it under the American Recovery and Reinvestment Act, according to this fun applet on the DOE site. That leaves $4 billion, or a little more than ten percent. $4 billion. That wouldn't even cover holiday bonuses on Wall Street. But it was fun while it lasted.

Energy Secretary Steven Chu will to give out some more in Columbus, Ohio tomorrow.

At the end of last month, $28 billion had been allocated, according to Matt Rogers, the senior advisor to Chu. In the short run, the DOE will evaluate how well the stimulus worked to create jobs. Over the long term, the focus will shift to whether it helped created ongoing businesses. One key area to watch will be to see how the companies that received ARPA-E grants for advanced research performed.

The National Institute of Standards and Technologies is busy on one of the most ambitious standards programs in the history of technology: it wants to set 77 standards for the smart grids, including standards for 14 priority areas.

And it wants a number of the important standards, such as demand response monitoring and energy use information sharing, done in a few months.

This is not going to be easy. Some technology standards bodies can linger for years.

Last week, I sat on a panel with George Arnold, who heads up the project for NIST, at the GreenBeat Conference and asked him which are the ones that look like the biggest problems.

Surprisingly, he said home area networks. Homes should be easy to control, right? They only have a few hundred to a few thousand square feet and contain a finite number of appliances which get replaced at a fairly slow rate.

The challenge lay in achieving cooperation. Appliance makers are nervous about added costs. No single standard--ZigBee, WiFi, power line networking, some form of RF mesh--has won out yet and interoperability remains a work in progress. Different camps continue to promote different paradigms for home energy control. For hardware makers, this adds up to compounded risks.

How NIST gets through this will be one of the biggest issues next year in smart grid.

SAN MATEO, Calif. -- Former Vice President Al Gore says the White House will try to get a climate bill passed by late spring 2010 or earlier.

"The window for 2010 probably closes around when spring ends," he said during a speech at GreenBeat taking place in San Mateo. Things are looking a bit up. Senators Joe Lieberman (Gore's former running mate) and Lindsey Graham of South Carolina are already working with Democratic senators to write a piece of legislation that will get at least some bipartisan support. It will probably include more subsidies for nuclear power, but otherwise will be similar to the Waxman-Markey bill that the U.S. House of Representatives passed earlier this year.

If the White House can get a Spring victory, it can go to a international conference in June with a solid U.S. position on climate legislation. Otherwise, the next big international event for the White House to present what the U.S. has accomplished comes in Mexico City in late 2010.

While green power is important, Gore added that infusing the grid with intelligence will likely have a larger impact.

"The single largest solution is efficiency," he said. "The reason efficiency is the largest source of low carbon or no carbon energy is the fact that we waste so much energy."

Distributed generation and power will also increase the need for grid improvements. The average age of transformers in the U.S. is 42 years old. Lots of new products, jobs etc. Whirlpool has smart appliances coming.

Right now it takes 1 gigawatt worth of power just to provide power to TVs that are plugged in yet turned off, Gore stated.

Things will outnumber people on the internet, he stated. By early next year, there will be one billion transistors for every person in the world.

Other highlights of the speech so far: We face a masssive climate change and he used to listen to Minnie Pearl on the Grand Ol' Opry.

SAN FRANCISCO -- Smart Grid is the energy theme of the moment – hundreds of millions of government funding, billion dollar smart meter deployments, and hundreds of millions in venture capital have drawn the attention of entrepreneurs, utilities, and corporate behemoths like Cisco, Intel, Oracle, ABB and Silver Spring.

And almost 500 of these smart grid cognoscenti converged at the PG&E Auditorium in San Francisco to assess the state of this nascent many-faceted industry at Greentech Media's The Networked Grid event.

Rick Thompson, GTM's fearless smart grid leader, kicked off the event with a review of some recent industry polling. Here are a few tidbits:

• Utilities view the benefits of the smart grid as a reduction in peak demand, energy efficiency, and an increased visibility and control.
• As for energy storage, utilities are planning to deploy pilot energy storage systems but there remains lots of uncertainty in storage and many smart grid areas.
• The major concerns for the utilities are back-end management and data management (clearly an opportunity for startups) as well as regulatory issues.

David J. Leeds, GTM's smart grid analyst, introduced the Real World Deployments and Policies: 2010 to 2020 panel. What follows are some of the more interesting quotes from the speakers.

Thomas Bialek, Chief Engineer, Smart Grid SDG&E:

• "Smart grid is not a revolution, it's evolution."
• "In California, we've been very progressive in our utility networks and smart grid is just a furtherance of those activities."
• "Will the utilities be the gas station of the future?"

Erfan Ibrahim, EPRI:

• "The rumor is that the grid is antiquated – that rumor is coming out of Silicon Valley and it's not true."
• Our grid has already been made intelligent "the challenge is we don't have a way of internetworking these nodes, we need a cost effective way of interconnecting already intelligent sensors."
• On cybersecurity: "We need more than just a big wall, we need successive challenges to the hacker. Think of grid cybersecurity in a systemic way. It's sophisticated and needs to be done with diligence."
• "Pool pumps, water heaters, AC and thermostats are the items that utilities would like to control in order to tackle peak demand."
• Amongst the many critical issues with the smart grid are: "Who owns the data and who has the right to use the data collected by the smart grid?"

Andrew Campbell, Senior Energy Advisor, CPUC:

• The biggest challenge in the smart grid is considered the regulatory aspect, at least in the eyes of the utilities.
• PG&E, SDG&E, and SCE will deploy 12 million advanced electric meters and five million gas meters by the end of 2012. (That's almost 15,000 meters a day!)
• There is no specific smart grid related regulatory framework for these deployments.

Kevin Dasso, Senior Director, Smart Grid Strategy at PG&E:

• "What does PG&E think of when we think smart grid? The simple explanation: An overlay of intelligence and automation over the existing grid – wires and substations – to offer new services and features. It can enable new services and features – uptake of renewables, bill management, and reliability."
• "There is a lot of excitement but excitement can be fleeting – we need to strike while the iron is hot. There will be some kind of half-life – so strike now."
• "Build customer awareness and expectations early. Plugging in a smart meter doesn't automatically reduce a customer's bill."
• Standards and roadmaps can make or break the success of the smart grid. Smart grid is a journey and we really need a roadmap to guide that journey."
• "There will be features ten years from now that we have no idea that could be done."

Smart grid has been the buzzword on utility, entrepreneur and investor's lips in 2009. 

Funding the smart grid has certainly been on the Obama administration's agenda – as evidenced by the billions being funneled into this sector (see Jeff St. John's pieces about the winners and losers in this contest).

Venture Capital investors have been talking about smart grid investments for a while now. Foundation Capital's Steve Vassallo even authored a "Smart Grid Manifesto" to "help drive a single point of view across our four Smart Grid portfolio companies." Vassallo writes, "Smart Grid and smart pricing together answer the riddle of how you get market forces to make a difference in a monopoly environment." 

Foundation's smart grid investments include EnerNoc, Silver Spring Networks, eMeter and Control4.

Another theme amongst VC investors in 2009 has been the capital efficiency of smart grid plays. In other words: Don't expect too many Solyndra or Nanosolar-magnitude deals from the VC community in 2009 or 2010. 

That said, in looking at the numbers, although funding in smart grid is recovering:



It's a bit surprising to see the small proportion of smart grid deals relative to VC in greentech as a whole:



So are VCs talking and not diving in?  Are they looking to see the outcome of Silver Spring Networks' utility roll-out? Are we only in early days? 

Or will these initial forays into Advanced Meter Infrastructure and Home Energy Networks give way to a bigger and steadier wave of other smart grid technologies like Vehicle to Grid, EV charging stations, data management and analytics, network optimization tools, and independent energy storage operators?

The next few quarters will tell. Smart people in Greentech Media's smart grid practice see a new smart grid innovation and investment wave about to break.

Siemens is the company that just can't resist.

The German industrial giant is considering purchasing solar cell maker Q-Cells, according to Reuters (via Forbes here.).

Earlier this month, Siemens bought solar thermal vendor Solel for $418 million. Earlier, it has bought an number of water companies and ramped up its investments in smart grid.

In a list of the top ten acquirers in greentech, we picked Siemens as number two, right behind General Electric.

This is a pattern you should get used to. Small, innovative startups often have tremendous technology, but they lack the capital, distribution networks and relationships to bring their ideas to fruition. Large conglomerates often fail to capitalize on the interesting stuff in their labs, but they do know how to buy stuff that seems to work and take it commercial. Thus, greentech will be a barbell market – a lot of small companies and a few large companies with not a lot of things in between.

As acquisitions spread, you can start to think of Silicon Valley as a farm system for conglomerates. That doesn't sit well with some: Didn't Silicon Valley win out over old-style conglomerates like Digital and IBM? Yes, but it doesn't mean it happens in every situation. Green startups are born to be bought.

And if Siemens isn't interested, start talking to Philips (two lighting acquisitions this year), Toshiba, TSMC, and Cisco Systems.