Understanding the benefits of the smart grid


A number of studies have concluded that, when viewed at a high level, the benefits of a smart grid far outweigh its costs – that is, when all costs and all benefits applicable to all stakeholders are included – but is it a good deal when viewed from each individual beneficiary, particularly the end consumer who ultimately foots the bill?

This issue forms the subject of a recent report, Understanding the Benefits of the Smart Grid, in the U.S. National Energy Technology Laboratory’s (NETL) Smart Grid Implementation Strategy series. In particular the report addresses three questions, which require clear answers to achieve alignment in moving forward with a smart grid:

  • What’s in it for the utilities?
  • What’s in it for the consumer?
  • What’s in it for us (society)?

The results suggest that most stakeholders will enjoy some benefits of a smart grid. So far, the utility community is gaining momentum in moving forward given the value proposition they see. On the other hand, the consumers, particularly the residential consumers, remain reluctant because their perceived value proposition is not viewed by them as compelling. More work is needed to communicate the smart grid benefits to the consumer group.

By far, the biggest winner will be society as a whole. The smart grid is expected to provide benefits to society in the following areas:

  • Reduced losses to society from power outages and power quality issues
  • Improved operating efficiencies of delivery companies and electricity suppliers will reduce their O&M and capital costs, keeping downward pressure on electricity prices for all consumers
  • Improved national security
  • Improved environmental conditions
  • Improved economic growth.

When the societal benefits are understood by consumers, their overall value proposition will be compelling and will create the tipping point needed to sustain and even accelerate the transition that is currently underway in the United States.

Click to view Understanding the Benefits of the Smart Grid