Smart grids present growth opportunity for U.K. economy


David Willetts,
Minister for
Universities and
Science, U.K. 
London, U.K. — (METERING.COM) — November 5, 2010 – The deployment of smart electric grids has been highlighted as a potential area of growth that could be transformative to the U.K.’s economy over the next 20 years.

In a new report from the government’s futures think tank Foresight, the smart electricity grid is described as maybe being the first new transformational infrastructure of the 21st century.

“It has been argued that it will be a prerequisite for an electricity system that meets the carbon reduction requirements of the UK to 2050. But new information and communication technologies will contribute to the improvement of all economic infrastructures (including transport, water and waste), by providing data that enables quick and accurate detection of failures, improvements to the efficiency of control systems, and more intensive use of transmission networks,” says the report.

Specific technologies listed in the smart grid “cluster” include microgeneration, smart grids, complexity theory (which is being used increasingly in modeling applications), intelligent sensor networks, and simulation and modeling.

Other smart grid related technologies listed under other clusters include advanced battery technologies, fuel cells, and intelligent low carbon road vehicles.

The report points out that the two main components of smart grids are the transmission and distribution components, which would entail the installation of sensors and digital relays on power lines. Although complementary, each component could be implemented independently. A number of factors will determine how, and at what pace, the U.K. implements a smart grid, including the increasing penetration of intermittent and inflexible generation, consumer engagement and acceptance, and increase in demand for car recharging and domestic heating/cooking.

The report says that beyond ensuring that planned new capacity, such as offshore wind installations, can be connected to the grid, it is important to weigh up whether the U.K. may benefit more over the next 10 years from investing in R&D of technologies for smart meters and low carbon energy generation, rather than commencing a costly build-out of sophisticated metering applications while technologies are immature and international standards have not been agreed on.

Investment in R&D of grid sensors and metering technology might also be undertaken jointly with the water, waste and transport sectors, as some solutions may be applicable across industries. For example, the development of ubiquitous and distributed sensor networks could help manage all kinds of infrastructure in addition to the electricity grid, such as by providing information about flows and potential system failures in the water supply network.

There will also be business opportunities for U.K. firms that find ways to manage data flows, and develop instruments to interpret them and respond, such as smart configurable telemetrics. This might also lead to integrated consumer applications that enable more efficient resource usage. A challenge – but also a business opportunity – will be to maintain cyber security on these critical economic infrastructures as the vulnerability of information systems increases along with their complexity.

“This timely report looks at how we can benefit from the growth opportunities of the next 20 years,” commented minister for Universities and Science David Willetts. “It calls for more active cooperation between large companies, small and medium enterprises and researchers to plan ambitious strategies for the benefit of their sectors. Developments in this area will help strengthen our economy and enable us to lead the way for innovation.”

On the size of the smart grid market to 2025, the report says the government expects £8.6 billion will be spent on replacing 47 million gas and electricity meters, with an expected benefit of £14.6 billion, over the next 20 years. U.K. transmission companies plan to invest £4.7 billion by 2020 for refurbishment and expansion of their networks.

Building a European smart grid could cost a total of €150 billion (£133 billion).