2 Minute Expert Briefing: Smart Grid Technology

Article reposted from NRG Expert

After reviewing NRG Expert’s latest report on Smart Grid technology and reading about the industry in general, Edgar van der Meer highlights some interesting facts:

Top 5 Smart Grid stats*

  • $2 trillion – estimated total investment needed to achieve full smart grid penetration
  • $480 billion - maximum cost of smart grid-related upgrades in the US
  • $100 billion – true value of the smart grid market by 2020
  • 400% - the percentage by which Western countries’ electricity prices will soar in the next 30 years if electricity grids do not become smart grids
  • $90 billion – the investment that China plans to make in smart grid technology by 2020

Why is the smart grid and smart metering of interest?

The electricity infrastructure in place today requires significant investment to modernise. The smart grid is viewed as a solution due to its:

ability to detect faults and to make repairs.
ability to enable a two-way flow of communication
ability to help companies better match supply and demand.
Drivers of the smart grid include:

Increases in electricity demand
The need to minimise power outages
The need to reduce carbon emissions
Pressure to integrate renewable energy sources (particularly wind and solar PV) into the energy mix
Requirements to reduce energy consumption

Smart Grid – Pros outweighing cons

“According to the International Energy Administration, the deployment of a smart grid can result in a 0.9 to 2.2 gigatonne reduction in CO2 emissions by 2050.”

PROS: Overall, the smart grid business case is becoming loaded in favour of utility organisations:

Reduced labour costs (e.g. due to less field metering)
Reduced investments in additional power capacity
Improved electricity supply
Lower compensation payments to businesses for blackouts
Significantly reduced penalties for lower carbon emissions
CONS: However, initial barriers exist to smart grid take up, which include:

Current low cost of electricity
Shorter life span and a less reliable track record than conventional meters
The risk of security breaches, hacking of smart meter data transmissions and potential malicious attacks

Key players

Key players in the smart grid sector include Echelon, Elster, Itron (formerly Actaris), Landis+Gyr and Sensus. No one company is vertically integrated across the entire smart grid sector, although Cisco and GE are the furthest along.

Interesting fact: IBM joins Smart Grid development

IBM has entered the smart grid arena, particularly on the telecommunications side. IBM is able to help utility companies by:

Adding digital intelligence to their grids.
Using sensors, meters, digital controls and analytic controls to help manage the flow of energy across the grid.
Using their expertise in system integration, large scale data management and security solutions
http://www.ibm.com/smarterplanet/us/en/smart_grid/ideas/

Key countries: China to lead smart technology investment by 2050

Initial investment will be focused in the European and US markets but is expected to shift to the Asia Pacific region, particularly China, where most investment will occur by 2050. Chinese leaders view smart grid technology as the ‘next industrial revolution’.

With the future value of the Smart Grid sector forecast to grow to 100 billion by 2020, governments, companies and individuals are researching this market heavily. For in-depth information and analysis, see NRG Expert’s reports: