U.S. smart grid costs could reach $476 billion with benefits up to $2 trillion


Palo Alto, CA, U.S.A. — (METERING.COM) — April 8, 2011 – The costs to implement a fully functional smart grid in the U.S. range from $338 billion to $476 billion but can result in benefits between $1.3 trillion and $2 trillion, according to a new study from the Electric Power Research Institute (EPRI).

The study factors in a wide range of new technologies, applications and consumer benefits, including grid technologies, information, and communication technologies, market structures, the demands of an increasingly digital society, more widespread deployment of renewable power production and its integration into the grid, the expansion and maintenance of existing infrastructure, and technologies and systems to address grid security.

The study indicates that an investment level of between $17 and $24 billion per year will be required over the next 20 years, assuming steady deployment of smart grid technologies beginning in 2010 and continuing through 2030. These costs cover a wide variety of enhancements to bring the power delivery system to the performance levels required for a smart grid, and include the infrastructure to integrate distributed energy resources and to achieve full customer connectivity, but exclude the costs of generation, transmission expansion to add renewables and to meet load growth, and a category of customer costs for smart grid ready appliances and devices.

When broken down these costs correspond to average annual increases of 8.4% to 11.8% in the monthly bill of residential customers, of 9.1% to 12.8% for commercial customers, and 0.01% to 1.6% for industrial customers.

“This cost assessment factors in new technologies and customer benefits that create a more resilient, self-healing and interactive grid,” said EPRI’s vice president of Power Delivery and Utilization, Mark McGranaghan, pointing out that it updates a 2004 assessment by EPRI which estimated the cost of implementing a smart grid at $165 billion. “It can serve as a valuable resource for the industry, policymakers and key stakeholders, first to help us appreciate just how far the state of the art has advanced, and second, to help the industry make prudent investment decisions going forward.”

The study also found that deploying a smarter grid will require careful policy formulation, accelerated infrastructure investment, and a greater commitment to public-private research, development and demonstrations to overcome barriers and vulnerabilities.