Semiconductors: The ‘smart’ behind the ‘smart grid’


By Daryl Hatano

Whenever one hears the word “smart,” as in “smart meters,” “smart grid,” “smart appliances,” or “smart motors,” think “semiconductors.” It is the chips that provide the computation, memory, wireless, sensor and other vital capabilities that make up the network.

Semiconductor technology is also behind the movement towards light emitting diodes (LEDs) as a replacement for compact fluorescent and incandescent bulbs, and semiconductor advances will drive down costs of plug-in electric vehicles, and solar panels and wind turbines.

Taken together, the amount of savings is phenomenal. The Semiconductor Industry Association recently commissioned a study by the American Association for an Energy Efficient Economy that found that semiconductor-enabled efficiencies can save 1.2 trillion kilowatt hours in 2030, 27 percent less electricity than the Department of Energy’s base case assumption.1

What does 1.2 trillion KWh savings in 2030 mean? It equates to:

  • 11% less than today, even though the economy will be about 70% larger;
  • 733 million metric tons less CO2 emitted in 2030 (this does not include the semiconductor-enabled renewable energy sources such as solar and wind);
  • 296 plants (600 MW) that will not be built by 2030; and
  • $1.3 trillion in cumulative savings from 2010-2030.

Of course semiconductors themselves use electricity, but their energy improvements over time are without peer. Consider that from 1978 to 2008, automobile miles per gallon have improved 40%, pounds of steel production per BTU has increased 167%, lumens per watt from incandescent bulbs to compact fluorescent bulbs improved 339%, but computer system instructions per watt improved by 2,857,000%!

To achieve the benefits of semiconductor-enabled energy savings will require the right mix of public policies including:

  • Providing federal grants and tax incentives for manufacturers and consumers of energy efficient and renewable energy components, products and/or technologies;
  • Regular updates of efficiency standards; decoupling utility profits from increased electricity usage; strong leadership through government procurement of energy efficient products
  • Doubling funding for federal science and research, including clean energy projects, and
  • Ensuring that climate change legislation supports rather than hinders the domestic production of products such as semiconductors that enable a net energy savings.

Over the past twenty years, semiconductors have created the information economy through the internet and mobile communications. Over the next twenty years, semiconductors can similarly revolutionise how we generate, distribute, and consume energy.

1 American Council for an Energy-Efficient Economy. 2009. “Semiconductor Technologies: The Potential to Revolutionize U.S. Energy Productivity”.