The United States is pacing global investment in smart grid applications and capabilities, according to The Smart Grid Utility Data Market by market research publisher SBI Energy. The report reveals that the most important potential smart grid capabilities are centered on self-awareness and automation, managing thousands—or even millions—of inputs to optimize grid functioning.
At least 27 American Recovery and Reinvestment Act (ARRA) projects are being funded from the almost $5 billion allocated to the U.S. Department of Energy (DOE) for grid modernization projects that have some portion of the award going toward data management or back-end smart grid applications. Just over half of these projects have described a transmission or distribution management system, confirming survey results from several different sources that utility professionals are seeing distribution management as a key smart grid technology to be implemented in the coming years. Much of the remaining money from this group of ARRA projects is going toward end-to-end smart grid projects that will include management systems, analytic systems and data management systems.
For fiscal year 2010 the U.S. DOE’s Office of Electricity Delivery and Energy Reliability (OE) Smart Grid research & development budget was $125 million, up from just $83 million in fiscal 2009. The funding request for fiscal 2011 is up almost 16% to $144 million. Additionally, $30 million in funding in fiscal 2011 is set aside for cybersecurity for energy delivery systems. Some of the cybersecurity projects being funded originally come from the visualizations and controls R&D program, but the DOE has now recognized the need for specific cybersecurity funding.
Globally, much of the smart grid funding available is still hardware-focused, particularly for the installation of smart meters. But advanced meters and other sensors are just the fingers of an emerging smarter electrical grid. Rather it is the data that these devices generate and the backend applications that will manage and use said data that will be the nervous system and brain of an active and fully capable smart grid.
While there are sound financial benefits to implementing a fully capable Smart Grid, there is also a huge financial cost as well. The number of new hardware and software systems that must be implemented across all levels of the grid is staggering, with cost estimates ranging from a few hundred billion dollars to over one trillion dollars just to fully upgrade the U.S. electrical grid.
“In the short term, utilities need to justify these costs to regulators and investors and also need to raise the capital to implement Smart Grid programs,” says Norman Deschamps, SBI Energy analyst and author of the industry study. “While the (ARRA) stimulus bill of 2009 went a long way towards kick-starting smart grid implementations, that money is only the tip of the iceberg for what an entire smart grid will cost.”