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Energy Trends Point Toward Smart Grid Innovation

Posted by Sam Eichberg

Jul 16, 2014 9:00:00 AM

smart grid city, featured on www.blog.marketresearch.comSince the world first started integrating electricity into everyday life, electricity and power has been based around “the grid.” The grid is the system that creates, transforms, delivers and even stores all of the electricity and power that we use, while also transferring power from suppliers to consumers.  Including wires, switches, transformers, substations, meters, gages and more, the grid’s infrastructure is vast and broad (the size of the entire continent), yet also intricate and detailed (each individual consumer is connected). It powers everything in our society, from power plants to homes, and everything in-between. The grid is our national engine and keeps our society running at all times.

Problems with current grid system

While the grid has served Americans well for more than a century, vulnerabilities have been exposed, risks have been taken and the time has come for an upgrade bringing the industry into to the 21st century. Manual management of the grid has become increasingly more difficult due to the rising demand for electricity. And, the demand will continue to grow as society further modernizes—it is expected to grow to 32,000 TWh (terawatt hours) by 2035, a 70% increase from 2012, according to a study by MarketsandMarkets. With the current system, people must monitor power levels at all times, and with this increase in demand, it will become increasingly difficult for them to manage the whole system without computerized assistance.

In order for the system to function properly, the production and demand of electricity need to be almost identical to ensure that no network components are overloaded. Too much power can cause a surge, while not enough power can cause brownouts, yet both can cause blackouts. This current system incurs costs of around $150 billion per year from outages, despite being more than 99.9% reliable.

Having been implemented in the industrial age, the grid has existed in this same state since before the current mindset that efficiency and environmental impact should be goals for society. The current system has one mission: to keep the country powered. We need to bring the grid from the industrial age into the information age. Efficiency, environmental impact and many other societal values are not currently viable options. The grid needs to be modernized, more efficient, easily manageable, but most of all, it needs to get “smart.”

“Smart Grid”

“­Smart Grid” refers to the computerized management of the traditional grid and the movement to bring it into the 21st century. Using solid state transformers, power line communication, smart solar technology, advanced sensors and other “smart” technology, the power grid can be revamped to better fit our society. Much like a smart phone, computers and sensors will be integrated that will allow for the system to adjust and adapt on-the-fly. These computers allow the grid to manage itself and its components to fully communicate.

Benefits of a smart grid

  1. Self-Regulation: The change to a smart system gives us the ability to address many of the problems with the current grid. A self-regulating smart grid will be able to handle the increased demand for electricity and will be able to better contain the power using load-sharing techniques so that there are no overloads. This self-healing grid is the computerized assistance that helps people manage large amounts of energy.
  2. Balance Supply & Demand: While managing large amounts of energy moving through the system, the smart grid can also keep the disparity between supply and demand at a minimum. Using its sensors to detect the levels, the smart grid can then instantly communicate with the other components of the system. It will limit blackouts, brownouts, surges and various other issues associated with this disparity and will save some of the $150  billion that Americans spend per year on blackouts.
  3. Eco-Friendly: A smart grid also allows for the grid to be environmentally friendly and efficient at the same time. The new system encompasses the technology that enables us to integrate devices such as energy storage options (plug-in electric vehicles, super capacitors, fuel cells, etc.), distributed generation and intermittent renewable (wind & solar). Super capacitors, environmentally friendly energy storage units, are being developed as instantaneous power supply. The efficiency levels achieved with super capacitor are close to 95%, according to a report by MarketsandMarkets. They are also being hybridized with batteries to enhance their performance.

Pitfalls of a smart grid

  1. Cost: While smart grid is a huge upgrade to the current system, it is neither perfect nor is it 100% practical. There is one obvious pitfall when it comes to the smart grid: the implementation of it. With a project so large and intricate, the cost and time of such a project is staggering. In 2012, it was projected to be developed steadily through 2021. It was also projected that over $560 billion will be spent on smart grid technologies worldwide.
  2. Utility Engagement: One of the biggest challenges for the smart grid is how to engage utility companies in the idea. Essentially, these companies are losing money by switching to a smart grid (when consumers use less energy, obviously, the providers lose money). One proponent of this is for utility companies to create a new system for which they generate revenue. That way, utility companies don’t have reasons to protest a smart grid and are more likely to help the process.
  3. Conceptual Phase: Even though implementation has already begun, the smart grid is still mostly a concept rather than a blueprint – significant development is needed behind analytics to be able to leverage smart grid-generated data (from meters and other smart nodes or sensors in transmission and distribution). In order for the smart grid to become more than just that idea, utilities need to find use for the tons of data they have collected over the past few years. Without any conclusions, there will be no step forward in the process.

Looking forward

Despite these pitfalls, society appears to be heading in the direction of the smart grid. There are many great things to come from the smart grid, and the market and industry have a lot of room to grow. Some additions that could potentially be made once the smart grid is implemented are a technology for mobile management, an added security system and even integration of other utility systems (water, gas, etc.). The ceiling for the smart grid industry isn’t in sight, and much opportunity remains for innovators.

MarketsandMarkets is a top source for market information on the energy industry. If you are heavily involved in the Energy & Resources industries, check out our new MarketsandMarkets Knowledge Center, providing your company with unlimited access to a vast library of MarketsandMarkets reports for one cost.

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Thanks for reading!

Sam Eichberg
Marketing Intern,
MarketResearch.com

Topics: Energy & Resources

    

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