Investing In Smart Grid Will Save Trillions In The Long Run
Rebuilding the electrical grid throughout the US will cost billions of dollars but will save trillions over 20 years, industry experts tell Reuters.
A “smart grid” being planned could cost $476 billion and provide $2 trillion in saving and benefits.
The smart grid will save energy, reduce costs and increase reliability by delivering electricity from suppliers to consumers using two-way communication that can control appliances, the charging of electric vehicles and the flow of power from renewable sources at customers’ homes.
“The implementation of the smart grid is a continuous process. As new technology is developed and becomes cost effective, it is being used to find the most effective way to meet supply and demand,” Matt Wakefield, smart grid program manager at the Electric Power Research Institute (EPRI) said in a conference call on Tuesday.
To make the power system of the future a reality, EPRI explains that power companies need to invest between $17 and $24 billion a year over the next two decades. Much of those costs will be passed onto consumers.
“We need to tell power customers there is going to be an improved power system that will result in reduced costs even if they do not see an immediate reduction in their bill,” said Clark Gellings of EPRI.
By the year 2050, EPRI estimated the average electricity bill will likely rise 50 percent if the smart grid is deployed. If not, Gellings said, the average electric bill could go up by almost 400 percent.
The giant technology firms want to manufacture the devices and software needed to enable generating facilities to communicate with the equipment that uses electricity. In addition to these firms, all sorts of companies in the power, renewable, appliance and auto industries can use the smart grid to interact with their customers.
Appliance manufacturers, like Whirlpool and Haier Electronics, can sell more energy efficient appliances, and auto manufacturers, like Ford Motor and General Motors, can use the smart grid to power up their electric cars.
The current power grid has not functionally changed since it was built to power the lights and appliances in your home. It is not ideally designed to meet the demands of a digital society or the increased use of renewable power production.
The grid today primarily consists of large coal, nuclear and natural gas-fired generating stations connected to local distribution networks by a high voltage network. The power flows predominantly from the power plant to the consumer.
Consumers want reliable and low cost power but they also want clean electricity. A smart grid will still depend on large nuclear and fossil-fired power plants but will also include many energy storage and renewable generating facilities.
The United States receives 46 percent of its power from coal, 21 percent from natural gas and 20 percent from nuclear. Renewables, like wind and solar, generate less than 5 percent of the total, according to data from the federal government.
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