Strong case for smart grid in U.K., report finds


London, U.K. — (METERING.COM) — April 25, 2012 – The initial investment case for moving ahead with smart grid development sooner rather than later in the U.K. appears very strong with the benefits far outweighing the risks, according to a new report.

Further, the timely creation of a smart grid can unlock significant benefits in other industries, providing a welcome boost to growth, jobs and exports. Between 8,000 and 9,000 jobs are projected, sustained through the 2020s and ’30s.

The report Smart Grid: a race worth winning? was prepared for SmartGrid GB by Ernst & Young and is claimed to provide the most detailed assessment yet of the potential benefits that might accrue to the British economy as a result of the development of smart grid.

The report finds that an incremental £23 billion NPV will need to be spent between now and 2050 on smart investments to upgrade the distribution network. However, this is significantly cheaper than the £46 billion spend to pursue a conventional investment strategy in grids. Compared to that approach, the work of the DECC/Ofgem Smart Grid Forum (SGF) highlights that following a smarter grid investment strategy could deliver cost savings of as much as £19 billion.

Importantly, the savings from smart grids are projected to remain as high as £10 billion even if only low levels of decarbonization/electrification occur. And under all of the scenarios considered, the projected benefits far outweigh the potential downside of moving early which was less than £1 billion.

The report also notes that some elements of the benefits that smart meters have promised to deliver could be at risk without the parallel development of smart grids. The timely roll out of smart grid could therefore also be important from the perspective of recouping the cost and realizing the full benefits from smart metering.

To address the complexities and challenges associated with developing smart grid infrastructure, the report explored possible solutions to the challenges, and broadly recommends the need for some fresh thinking by government, regulator and industry.

“The case for pushing forward the development of smart grid in Britain is compelling and has probably been underestimated by previous studies,” say the SmartGrid GB Executive Committee in the foreword. “But there is a long way to go to make smart grid a reality across the country and without further policy certainty, appropriate regulatory incentives, and more investment, Britain could quickly fall behind in what will be a new global growth market and a source of prosperity and jobs for years to come.”