Tackling the thorny issue of upgrading the grid to become “smart” is not only a daunting task but assessing its impact, and especially how much it will cost and save money for consumers in the long run is tricky.
The gist is that there is no denying electricity grids, at least in the U.S. if not worldwide, have to be revamped if they are to not only withstand the upcoming onslaught of energy demand, but also become more secure and delivering energy coherently. Decades of differed maintenance and upgrades are now ending up costing tax payers billions of dollars.
The Break Even Point. How should it be upgraded? What is the break even point? What do we start with? Those are questions that are haunting utility officials and governments that need to balance funding and return on investments properly. A PRNewswire, via MarketWatch reported Jackson Associates showed results from a very in-depth and insightful first utility-detailed nationwide study of smart grid savings. It tackled individual utility customer end-use hourly electric loads to evaluate smart grid costs and benefits. This study has taken into accounts many aspects others did not in the past.
Conclusions: Total savings potential, after cost, would be $48 billion for the 200 largest US utilities and individual utility savings range from negative to $3.2 billion in savings. 1 out of 10 utilities could lose money with comprehensive smart grid deployments, while the benefit/cost ratios depend on complicated factors. The trick here is that targeted, strategic technology deployments would significantly increase benefit/cost ratios, and customer end-use hourly load information should be used to ensure economic benefits, hopefully do not exceed costs.
Funding The Upgrades. In the U.S., the Department of Energy, DoE has $3.9 billion dollars it seeks to fund for the smart grid, according to GreenCarCongress. Some $3.3 billion will go to the Smart Grid Investment Grant Program, and $615 million targeted for smart grid demonstration projects.
One thing we can safely deduce from the smart grid project is that differed maintenance and upgrades, usually done to “save money” end up costing more, mostly ponied by tax payers and involves government oversight. If hindsight is 20/20, we can only hope this is a chance for a clean slate and that going forward will be a tricky balancing act between throwing money at problems and fairly short term feasibility.
For more on the Maisy report, click here.