Smart grid – real economic and environmental benefits demonstrated


A fully deployed smart grid has the potential to provide savings between $39.69-101.57, and reliability improvements of 25% or 27.2 minutes, per consumer per year in the U.S., according to a new report from the Smart Grid Consumer Collaborative (SGCC).

Further the indirect economic benefits from the reliability improvements as well as the potential carbon emission reductions – between 55-592 lb per consumer per year – could amount to a further $49.35-53.08 per consumer per year.

The report, Smart Grid Economic and Environmental Benefits, is aimed to help smart grid stakeholders better understand the benefits – economic, environmental, reliability and customer choice – associated with smart grid investments.

The report assesses nine smart grid capabilities – integrated volt/ var control, remote meter reading, time varying rates, prepayment and remote disconnect/reconnect, revenue assurance, customer energy management, service outage management, fault location and isolation, and renewable generation integration.

The direct benefits are those that could affect customers’ bills, while the indirect benefit calculations are a translation of the reliability and environmental performance improvements from smart grid capabilities into economic terms.

The report also presents a benefit-cost summary, finding benefits to costs ratios ranging from 1.5 for a current average capability deployment to 2.6 for a well optimized deployment. These correspond to net benefits per customer of $247 and $713 respectively.

This report is a contribution to the growing literature on the impacts of smart grids based on data from real projects – in this case from projects in the U.S. Another recent study, the Smart Grid Global Impact Report from VaasaETT and Ventyx, adopted a different, rating, approach and assessed smart grid projects on all the continents. What these studies are finding is that smart grids can and are having a positive impact and that the benefits can and are outweighing the costs. This should bring added confidence to the industry, both on the utility and regulatory sides, and enable business plans to be honed and other projects to start moving ahead.

By Jonathan Spencer Jones