Tuesday, 7 June 2011

Smart grids could bring $2 trillion in benefits to the US

The US Electric Power Research Institute (EPRI) has published an interesting cost benefit analysis of deploying a smart grid in the US. Taking into account a range of technologies, applications and consumer benefits, the EPRI concludes that the cost of implementing a fully functional smart grid ranges from $338 billion to $476 billion, but the benefits would be worth between $1.3 trillion and $2 trillion.

The assessment considers the impact of grid technologies, ICT, market structures, other digital society demands, more widespread deployment of renewable power production, expansion and maintenance of existing infrastructure, and security technologies and systems. The full analysis is here.

It’s not the first time that EPRI, which describes itself as an independent, non-profit the organisation, has made such an assessment. In 2004 the organisation estimated the cost of implementing a smart grid at $165 billion and lead to a
benefit-to-cost ratio of 4:1. A separate report estimated that the smart grid could reduce CO2 emissions from the electric sector by 58% by 2030, relative to 2005 emissions.

The updated analysis assumes steady deployment of smart grid technologies from 2010 through to 2030.


Its a very detailed analysis which gives an insight into the issues that need to be taken into consideration in estimating smart grid benefits. 

The report does make the point 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’. Smart grids have obvious benefits, particularly in an energy-constrained world, but it’s a huge investment for any country and the challenges are not just technical. It requires political will and public acceptance to make it work. The latter may yet be the main challenge.

© The Green IT Review

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