Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Get Smart: Is Grid Technology Enough to Reach Our Energy Goals?


Transmission upgrades are one crucial step, but microgrids and distributed generation may be a higher priority.

These days it's about more than just being smart -- it's about creating a world that we would be proud to leave for future generations. As the conversation for smart grids continues to grow, we need to realize that more must be done. Smart grid technologies are a step in the right direction for environmental, financial, and security purposes, but we should focus on distributed generation and microgrids rather than large transmission upgrades.

Smart Grid

When we talk about smart grid technologies, we're talking about transmission upgrades, substation automation, distribution automation, smart grid information and operations technology, and smart metering. While transmission upgrades require the greatest investment (over 70% of US transmission lines are over 25 years old), they also represent the greatest area of revenue generation of smart technologies.

In 2012, smart grid technologies generated over $33 million in revenue. According to a study done by Navigant Research, this number has the potential to grow to almost $73 billion in yearly revenue by 2021 and total $461 billion in cumulative revenue from 2013 to the end of 2020. In addition, modernizing the grid and incorporating smart technologies could create as much as $2 trillion in consumer benefits over the next 20 years, making this investment look like a no-brainer.

In 2013, global spending for grid modernization reached about $15 billion, with China leading at $4.3 billion and the US reaching $3.6 billion. In fact, according to Bloomberg New Energy Finance, this was the first time the US has been outspent by China in the smart grid market.

Experts say that all of these technologies combined improve grid reliability, efficiency, and IT capabilities.

Be the Smartest

However, something just isn't adding up. It makes sense to invest in smart metering, distribution automation (adjusting defects and voltage levels in the system automatically), and IT operations technology, but right now might not be the best time for investing in transmission upgrades.

Yes, research shows that this is the greatest potential revenue stream from smart grid technologies, but much of these technologies will go toward upgrading our current grid structure. There are other changes that should be prioritized, such as microgrids and distributed generation.
Smart grid technologies alone won't reach the reliability needs that our nation is discussing; we need to combine smart grid technology with microgrids and distributed/community-generated clean energy. Not only does this move reduce reliance on fossil fuels, improve our grid reliability, and protect our planet for future generations, but it also is another potential investment revenue stream.

According to another report from Navigant Research, microgrids could become a $40-billion-a-year business by 2020. We need to change the way the electricity game is played rather than just tweaking the rules. When an entity such as University of California-San Diego can save $850,000 a month by self-generating electricity and using its own microgrid, it makes perfect sense that this industry will take off.

Companies are taking note of this potential investment opportunity, as well as looking at it as a way to help improve the way of life in many underdeveloped countries. General Electric (NYSE:GE) recently launched a new Distributed Power business sector and pledged to invest $1.4 billion over only four years to help meet the world's needs of on-site generated electricity -- another example of the progress of distributed generation. By combining distributed generation with smart and microgrid technologies, we can visualize making a reliable and interconnected globe possible with 100% renewable energy.

If transmission upgrades are the way to go for our current grid structure, it would then be an intelligent move to reinvest the revenue generated from these technologies into microgrids and distributed generation. It must be recognized that smart grid technologies alone will not solve our problems and reach our national energy goals. Only a well-crafted combination of smart grid technology, microgrids, and distributed generation will ensure a meaningful transition to a stable grid and 100% clean energy.

Editor's note: This article by John Steller was originally published on Mosaic.

Mosaic is the online platform connecting investors with high-quality solar projects; we invite everyone to participate in the clean energy economy.

Make Solar, Not War

The Supergrid: Connecting a Globe Powered by Renewable Energy

Can a Solar-Powered Microgrid Provide Universal Energy Access?
< Previous
  • 1
Next >
No positions in stocks mentioned.
Featured Videos