By Jonathan Spencer Jones
“Smart grid is now coming of age in all the continents of the world,” says Philip Lewis, CEO of the VaasaETT global energy think-tank, commenting on an interesting new report being released today, which analyzes 200 smart grid projects around the world with an in-depth focus on 30 of the leading projects.
The Smart Grid Global Impact Report 2013, the first issue of what will be an annual study, is the first to review smart grid project outcomes, and was carried out by VaasaETT for Ventyx and ABB. As the title indicates, it is focused on the ‘impacts’ and these are evaluated according to the 5 smarter grid goals or ‘pillars’ – Economic, Environmental, Consumer, Reliability, Innovation – which are seen to deliver returns against some of the industry’s biggest challenges.
These pillars were chosen following extensive discussion with people in the industry, explains Lewis, who authored the report. “The logic is that Economic, Customer, Environmental and Reliability impacts are the most important impacts of smart grid, while Innovation is at the very core of the ability of smart grid to achieve those impacts.”
What then are some of the many findings? Smart grid projects are surprisingly similar across all regions, with grid side technology components the key focus – including smart metering, demand response, and sensing and monitoring – but with customer and demand components also very powerful.
Perhaps not surprisingly given the nature of smart grids, innovation is the most successful pillar across all regions – and today, innovation is focusing on smart grid analytics. Also not surprising is that most of the projects surveyed have achieved improvements in network reliability, and they have also achieved diverse environmental benefits including renewable energy integration and emissions reductions.
However, there are some surprises and one is the geographical breakdown of the projects. The 30 leading smart grid projects represent 16 countries on 5 continents, but the top 10 projects do not include any from Europe and fully half of them are from Asia (the other five of the top 10 projects include 2 from U.S., 2 from Oceania and 1 from Latin America).
Another surprise is the relatively low level of investment in the projects, despite their varying scales (larger in the U.S. and Asia), averaging from under $200 per customer for projects without smart metering to approximately $400 for projects with smart meters installed, while the savings per customer for the projects range up to approximately $500 per year.
Several clear messages emerge, of which one is that project impacts do not necessarily correlate with the project spend – or as the report puts it, “you do not have to spend the most to be the best.” However, leading projects do have a more holistic approach, deploying innovation across many elements and capitalizing on their interdependencies. Further, the most successful smart grid projects overall are typically also those that deliver the greatest customer impact – and to do that they must be strongly customer focused at all stages.
Projects are being invited for inclusion in the next and future editions of the report – and particularly interesting would be more from the under-represented regions such as Latin America and the Middle East.
For more insights see the article “New research reveals global return on investment from smart grid” by Philip Lewis and James Braatvedt in Smart Energy International Issue 3 2013, p 76.