Last updated: 19 Nov 2010 Update History
Report Status: Archived
Report Pages: 100
Analyst: Kylie Wansink
This report provides valuable insight into the key trends taking place in terms of worldwide smart grid development. The report explores the concept of smart grids in terms of the larger global picture by drawing on the unique strategic vision BuddeComm has developed in this emerging sector. The report provides an overview of the current smart grid and smart meter industry and also explores the issues impacting on consumer perception. It discusses smart grids in relation to the Copenhagen Summit and smart energy in terms of distributed (renewable) energy. Smart grids are a key element in the development of Smart Cities and the report provides insight into Smart City developments and the broader Communications Revolution taking place.
Subjects covered include:
Researcher:- Kylie Wansink, Paul Budde, Lawrence Baker, Lucia Bibolini, Peter Evans, Lisa Hulme-Jones, Paul Kwon, Henry Lancaster, Peter Lange, Stephen McNamara.
Current publication date:- November 2010 (7th Edition)
Next publication date:- November 2011
Smart grids are now well and truly on the agenda of most electricity companies around the world - and indeed on many of their governments’ political agendas. It has become increasingly clear that smart grids are able to transform the energy industry, and that a much broader group of industries are also affected by this, such as the IT, telecoms, white goods, renewables, management consultants, storage and transport sectors.
The electricity grid is becoming the enabler in many industry changes, and by making it an intelligent grid and adding telecoms to it, the power will shift away from the electricity companies to the customers – and the appliances that will be developed will assist this process; some of that on a machine-to-machine (M2M) basis. For more information, see chapter 1.1, page 1 - Global smart grids – overview and insights
While progress has certainly been made in the development of smart grids; it is important to note that due to its very nature, the concept continues to be ill-defined and rather fluid. This makes it difficult to develop firm plans of action, especially when considering that smart grids involve several key elements – the grid itself, the consumer home energy network, and the facility to include and manage renewable energy and e-cars. For more information, see chapter 1.2, page 10 – An industry in transformation
The electricity utilities started off with one of the smart grid elements, the smart meter, and that still dominates many of the developments. At the same time, it does to a certain extent; limit more truly ‘smart’ developments. However smart meters do have the ability to enable more complex time and usage-based tariffs, which will drive change in customer behaviour and create increased opportunity for differentiation by the utilities. They also set the stage for greater use of discounts and incentives, and a wider range of product offerings, including micro-generation and non-energy products. For more information, see chapter 2.2, page 20 – Smart meters – overview and insights
Unfortunately, marketing the benefits to the customer has been something of an afterthought in the development of smart meters and smart grids, and the industry is paying dearly for that oversight. There appears to be very little interest among customers in regards to smart grids and smart meters, and this is mainly because the benefits have not been communicated well to consumers. Perhaps if the industry had had a smart grid vision instead of a smart meter vision, they would have been able to explain to the customer that they would be provided with tools that would enable them to manage their energy use better. This would result in saving energy which would ultimately lower the costs - to such an extent that it could even lead to a neutral outcome in relation to the ever-increasing electricity prices. For more information, see chapter 2.1, page 15 – Smart grids and consumer issues
Environmental policy remains one the key global problems being faced around the world. While the climate change issue has dropped off the headlines, it is still very high on most countries agendas. With fossil fuel energy being the single largest culprit in the problem, no matter how one looks at this issue, the overriding solution is to move as quickly as possible away from fossil fuels to renewables.
A significantly large part of the population is interested in lowering their CO2 footprint. Furthermore there is evidence that this and other energy saving measures can lead to overall savings of around 30%. This could largely offset the increases in electricity prices. Disruptive energy developments from new energy service providers which will lead to the development of new business models around distributed (renewable) energy, will also add to the dynamics of this emerging market. For more information, see chapter 3.2, page 28 – Smart grids and renewables
The Copenhagen Summit was the first global event where countries came together to address a common cause. This in itself was an enormous achievement – a beacon to illuminate future global policy-making. The complex dynamic surrounding the carbon price still needs to be resolved, but it also became clear that smaller steps are necessary, and that now is the time to try and create some wins here, particularly in the area of smart energy. In other words, can we save energy through smart grids, smart infrastructure, smart buildings, smart transport and smart cities? For more information, see chapter 3.1, page 25 – Smart grids after the Copenhagen Summit
The concept of smart cities and smart communities is based on intelligent infrastructure such as broadband (FttH) and smart grids, so that connected and sustainable communities can be developed. However, before these smart communities can be built, trans-sector policies and strategies need to be developed. They can’t be built from the current silo structure that dominates our thinking; rather it requires a holistic approach which includes environmental issues such as energy self sufficient buildings, energy exchanges for renewable energy and e-cars, delivery of e-health, e-education, e-government services as well as digital media and Internet services. For more information, see chapter 4.2, page 37 – Overview of smart cities
The communications revolution is an important element of the broader ICT revolution, and it is unfolding before our very eyes. We are right in the middle of a transition from old communications structures to new intelligent structures that are fully interactive and video-based. This is not simply a technology-based development – it brings with it massive changes to the way we live, work and communicate. It impacts on healthcare and education, as well as on environmental services such as smart electricity grids. This necessitates collaboration between the various industries such as utilities, telcos, IT, vendors and consultants. As well as the benefits the transformation brings to the nation, it also brings with it massive new business opportunities. The energy industry will be one of the last on the planet to be affected by the ICT revolution and a total business transformation will be required over the next 5-10 years. For more information, see chapter 4.1, page 33 – Smart grids and the communications revolution
Data in this report is the latest available at the time of preparation and may not be for the current year.
In 2009 Paul contacted me and we engaged in the brainstorming sessions that led to the development of the UN Broadband Commission for Digital Development.
Paul is a visionary with a keen strategic approach. He is a powerful communicator, provides succinct analyses and has a complete knowledge of all the key information and communications technologies relating to broadband.
Dr Hamadoun Touré, Secretary General International Telecommunications Union (ITU) 2006-2014
BuddeComm's strategic business reports contain a combination of both primary and secondary research statistics, analyses written by our senior analysts supported by a network of experts, industry contacts and researchers from around the world as well as our own scenario forecasts.
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