Global Smart Grid Overview

A new report presents findings from the Global Smart Grid Federation on smart grid comparisons from its members. It provides insightful analysis of the member’s energy markets and project summaries reflecting leading edge deployments of smart grid technology around the world. It articulates a key goal of the organisation, namely how global collaboration can help accelerate the critical transformation of our energy infrastructure. Creating and sharing international best practices is the best way to maximise consumer involvement, apply both proven and new technologies, and adapt policy and regulatory structures to support this new environment.

At its simplest, the “smart grid” refers to a more efficient, modernized electrical grid. It allows users to manage their electrical demand or output in a way that is most cost-effective for them and beneficial for the power system.

In each of the countries profiled, the smart grid forms a vital part of government strategy to achieve the common goals of energy security and low carbon economic growth. Only the smart grid can integrate distributed renewable generation into the power system, which permits countries to bolster their energy independence while reducing their carbon footprint. The smart grid fosters innovation and economic growth fuelled by skills development and higher employment levels. It presents unique economic opportunities for industry and individuals to profit by engaging in behaviours which help achieve important societal goals like energy security and decarbonisation.

The smart grid forms part of government strategy at a time when utilities need to refresh and modernise their operating infrastructure. In the developed world, most electrical grids were built in the post-World War II period. In all the countries surveyed in this report, electricity demand is growing and load profiles are changing, putting strains on aging infrastructure.

The smart grid can be built. The projects highlighted in the report evidence the fact that smart grids exist. It profiles the leading grid modernisation projects in the world, nearly all of which are still in the development or pilot stage.

Most of the profiled smart grid projects are complex. They attempt to incorporate multiple smart grid elements. The more complex a project, the more inherent risk there is to its successful implementation. A step-by-step approach could mitigate this risk.

The most difficult challenge to a successful smart grid lies in winning consumer support. Without it, the smart grid cannot exist and it cannot deliver its promised benefits. Ultimately, the consumer is paying for the smart grid. The smart grid does yield important benefits for consumers, but they come at a significant cost and, at the individual level, the need for these benefits may feel less immediate.

Winning consumer support hinges on a radical change in thinking by utilities about their customers and by consumers about electricity. Utilities risk taking their customers for granted, being overly technocratic in their relationship with them, and possibly alienating them. They would be well-advised to engage with consumers on a new level, perhaps borrowing from the best practices of more competitive, consumer-centric industries. Likewise, in many developed countries, consumers risk taking electricity for granted as a low-cost commodity, which is always available, rather than a commodity subject to market swings in a manner similar to gasoline. Active consumer engagement in the power system will depend on a change in this perspective.

The government is best positioned to educate consumers on the value of the smart grid. The smart grid is really part of government strategy to achieve societal goals. The electricity sector is highly regulated by government. The government has the resources and skills needed to mount large scale smart grid messaging campaigns. It is also the best advocate for citizens on consumer-oriented issues such as affordability, privacy, cyber-security, health and safety.

Government can be an effective mediator between the consumer and the power system. Governments can (a) better persuade consumers of the benefits of smart grid, (b) better represent and protect their interests in smart grid developments, and (c) provide an effective framework of incentives (and disincentives), which induce the desired behaviours while still empowering consumers with choice.

Download the report here.

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