Smart grid investment intensifies but still insufficient, IEA reports


Paris, France and New Delhi, India — (METERING.COM) — April 18, 2013 – Demonstration and deployment of smart grid technologies is intensifying, driven by forces such as accelerating integration of large scale variable renewable energy sources, but accelerated investment and new regulatory and business models that enable sharing of smart grid costs and benefits will be required to meet 2020 targets, according to the International Energy Agency (IEA) in a new report.

In 2012 globally public and private investment in advanced metering infrastructure, distribution automation and advanced smart grid applications was $13.9 billion – up fourfold from $3.4 billion in 2008. However, by 2020 cumulative smart grid investment needs to be in the range $594 billion to $738 billion to meet the targets of the IEA’s 2°C scenario, under which the long term average global temperature increase would be limited to 2°C (with 80% chance).

The IEA’s Tracking Clean Energy Progress 2013, which reviews multiple clean energy technologies, points out that an indicative view of progress is provided by individual smart grid technologies and projects. For example, global cumulative smart meter deployment increased by 500% between 2008 and 2012, from 46 million to 285 million meters installed, with a further increase to almost one billion installations projected before the end of 2018.

However, in general tracking progress in smart grid deployment is complex. Efforts are ongoing by several organizations to determine appropriate metrics, but improved data collection and knowledge sharing are essential to harness lessons learnt from the many smart grid projects under way globally, and to ensure replicability and scalability for future projects. To this end governments should accelerate national data collection and support international data coordination efforts.

The report also notes that the integration of the many individual smart grid technologies is the largest challenge in the development and deployment of smart grids. Many smart grid technologies are mature but require further demonstration to determine how they can work in a coordinated fashion. Hence, there is a continued need for additional pilot and demonstration projects.

Further, as the deployment of sensor and measurement technologies such as smart meters and PMUs generates increasing amounts of data, innovative efforts will be required to manage, protect and process system data. To ensure that privacy concerns do not become a barrier to smart grid deployment, governments should proactively address data and cybersecurity issues through regulation and by applying best practice in generation, transmission, distribution and end-user sectors.

Smart grid technologies are not the only ones lagging in what the IEA describes as a “bleak assessment.” The only clean energy developments on track to meet the 2°C scenario are renewable power and the deployment of electric and hybrid electric vehicles. Sales of EVs more than doubled from 2011 to 2012, but to reach 20 million EVs by 2020, they must continue to increase by 80% per year, while HEV sales must increase by 30% per year to reach the 14 million target.