Friday, October 18, 2013

Building Support and Knowledge for Smart Grid Investments: This Just In

By Patty Durand, Executive Director, SGCC

On Oct. 8 we released our latest report,
Smart Grid Economic and Environmental Benefits: A Review and Synthesis of Research on Smart Grid Benefits and Costs, which is available for download at no charge. Our intent is to provide consumer and environmental advocates with real numbers in order to build knowledge and support for investments in a smarter grid. We expected, and this report shows, that such investments pays big dividends to individuals as well as society.

By conducting a careful meta-analysis of existing data, we outline the value to be found from the economic, environmental, reliability and customer choice benefits of a smart grid. Wherever possible we present the findings in terms of the metric “per customer per year,” based on actual data from smart grid deployments.
We analyzed investments along a spectrum of nine smart grid capabilities. The Smart Grid capabilities with the highest economic and environmental benefits are:

·                     Integrated Volt/VAr Control
·                     Remote meter reading
·                     Time-varying rates

Some Smart Grid capabilities, such as the ability to integrate higher percentages of renewables, have the potential to produce savings and environmental benefits well in excess of these benefits; however, more research is needed to fully quantify this potential.

An important concept in the report is Net Present Value (NPV), which is an analytical technique for converting future benefits and costs into present-day dollars for comparative purposes. The report provides a NPV for a conservative “Reference Case” projection as well as for a more optimistic “Ideal Case.” We found the ratio of benefits to costs ranges from 1.5 to 1 in the Reference Case and 2.6 to 1 in the Ideal Case.

This report was written in a lay-reader friendly style so that non-experts can use the findings to understand utility investment decisions as well as generally understanding smart grid concepts. We also prepared a guide for technical terms to be used in conjunction with the report for those needing more help understanding the concepts that exists within the U.S. electric grid. That publication, Technicaland Economic Concepts Related to the Smart Grid – A Guide for Consumers, is a companion resource for the new report.

How do each of the Smart Grid capabilities contribute to available benefits?

In summary, the key findings of the study are:
  • Smart Grid capabilities offer significant cost savings, on the order of $89.36-154.65 per customer per year.
  • Smart Grid capabilities also offer environmental benefits, reducing CO2e emissions per customer by 55-592 lbs per year.
  • Smart Grid capabilities increase reliability by 25%, or 27.2 minutes of avoided outages per customer per year.

In closing, I’d like to add that SGCC research reports have been garnering substantial power industry attention. I had the opportunity to write a piece calling attention to our latest findings for Renew Grid, while and Fierce SmartGrid ran their own articles, Electric Light & Power and Yahoo! Finance ran our press release and Smart Grid Network linked directly to the new report. I’d like to thank these publications for their interest in our work.

Further traction is up to each and every one of us. Please assist us in sharing this report with your colleagues and constituents so its findings are widely read and fully understood. Please also join us for our fall webinar series at

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