Global smart grid projects are evolving by the day as leaders figure out ways to invest in the technology. And the decisions they make now will likely shape how utilities operate in the future.
China, the U.S., Europe and India all have their own problems to solve, and although they do share some common concerns, each region's leaders have chosen unique grid goals with money being allocated accordingly.
In case you've missed the latest action, here’s where some of the world's biggest players have been putting their investments and why:
The investment: A smart grid show-off, China plans to invest $100.8 billion by 2020 to create a “strong smart grid,” thereby spending the most of any nation -- the World Energy Council reports in 2012. Along the way, China is implementing its 5-year power plan announced in 2011 to accelerate grid innovation in key areas such as grid-connected renewable energy, large-scale energy storage, and intelligent T& D tech. China’s smart grid funding is projected to grow from $22.3 billion in 2011 to $61.4 billion in 2015, helping to deliver more than 6 trillion kWh. By 2016, China will boast 35% of installed clean energy capacity, plug and play, and widespread smart metering.
The latest: In July, China announced a new goal of quadrupling its solar PV capacity to 35GW by 2015 – a move that will only put more demands on the country's smart grid.
2. THE UNITED STATES
The investment: America’s aging power grid continues to drive the smart grid boom, which started in 2009 when the American Recovery and Reinvestment Act invested $4.5 billion to kick-off serious smart grid development. Matching utility funds resulted in an $8 billion windfall for dozens of utility projects.
But there’s been no cake walk for smart grid advancement. State budgets limiting renewable energy incentives and energy efficiency might dim the smart grid’s starring role. And for many utilities, smart grid involves too much regulatory and economic uncertainty. In turn, projects such as the Pacific Northwest Demonstration Project must continually make the business case for smart grids. And in places like Maine where the PUC is actively feuding with Central Maine Power Co. over unproven claims of smart meter energy and money savings-- audits threaten to reveal the slow-coming payoff for smart meter investments.
The latest: If Congressman Jerry McNerney (D-Stockton) has his way, using smart grid tech will become law. In his effort to help utilities slash peak-demand, McNerney introduced the “Smart Grid Advancement Act of 2013” in July requiring states and utilities to set goals to reduce peak demand using smart grid technologies. If passed, utilities will have to post a minimum decrease in peak demand by 2015, and expand the Energy Star Program inspiring customers to buy energy efficient and cost-saving appliances.
Initiatives like these will help the U.S. smart grid market grow to $26.7 billion by 2017, recent Lucintel research finds. And at the very least, the investment will stimulate the economy. For every million dollars spent on the smart grid, America’s GDP increases by $2.5 million, the U.S. Department of Energy reported in April.
The investment: In 2009, The European Union (EU) passed a smart meter mandate requiring utilities to deploy smart meters in 80% of EU households by 2020, granted if there was a strong business case. As such, an estimated $20.6 billion will be invested to install 110 million smart meters in Europe by 2017, Berg Insight found. But implementation has been “patchy,” Bloomberg reports.
To date, Europe has invested $8 billion for 281 R&D smart grid projects and 90 smart metering pilots. That’s a drop in the bucket of the additional $700 billion needed to add 250 million smart meters by 2020 and further grid modernization by 2030, the European Commission’s Energy Directorate said. While the UK, Germany, France and Italy have led investments in smart grid demonstration projects, the UK's one-year smart meter delay to assess functionality indicates future snags for Europe's plan. At the same time, regional demand will ripen, primarily due to Europe's renewables increasing by 2.5% per year through 2035 and new technology such as electric cars entering the grid.
The latest: France announced a $6.5 billion plan to deploy 35 million smart meters by 2020, joining Spain’s blitz of 13 million by 2018.
The investment: India’s Ministry of Power has invested $44.3 million to implement smart grid projects. That may not sound like a lot, but India is making strides considering its struggling electricity system. A mix of power theft, supply shortfalls, and inefficiency in metering and bill collection has caused the nation to lose up to 50% of energy production. Despite this, the India Smart Grid Task Force is seeking government approval for 14 smart grid pilots to develop proof-of-concept and map-out India’s smart grid solutions.
In addition, India’s electricity grid reform program -- R-APDRP -- has committed $3.7 billion to strengthen the distribution system and mitigate losses. Under the program, if a utility can’t reduce inefficiency losses by 15%, the government will reduce its grant. In turn, R-APDRP is considered the grand precursor to a successful smart grid rollout.
The latest: Mysore, India is close to launching a $7 million smart grid pilot at the Chamundeshwari Electricity Supply Company, a government-run utility -- and millions in smart grid projects are planned across the country.
A key driver of India’s smart grid investment will be peak load management. Without the proliferation of peak-load plants, India’s most urgent smart grid need is demand-side management to offset peak demand and load growth. A potential roadblock is India’s government-run distribution business which has elbowed out private companies more likely to invest in smart grids. Politically-motivated electricity pricing has artificially lowered rates and dried up revenue thereby limiting funds to invest in the grid.
Would you like to see more utility and energy news like this in your inbox on a daily basis? Subscribe to our Utility Dive email newsletter! You may also want to read Utility Dive's look at 5 utilities' dynamic pricing programs, technology and results.