Smart Grid and Energy Storage Technologies Spread

Public and private investors make effort to update outdated infrastructure
  • The product of a global effort to update aging grid infrastructure, global investment in smart grid technologies saw a slight uptick in 2012.
  • Although the United States saw nearly a 20% decline in investments from 2011, the combination of public and private investment helped the country maintain its status as the global leader in smart grid development.
  • The next few years will likely see numerous nationwide smart grid deployment projects and advancements in energy storage markets.
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Click to enlarge. (Horizon Energy)

Around the world, public and private investors are making an effort to update aging enegy infrastructure, as evidenced by the fact that global investment in smart grid technologies saw a 7 percent uptick last year. On top of direct investments, numerous countries around the world are making headway on smart grid regulatory policies, development plans, and frameworks to support future grid infrastructure upgrades.  Commonly defined as an electricity network that uses digital information and communications technology to improve the efficiency and reliability of electricity transport, smart grids consist of many different technologies serving different functions. Such modernized grids are becoming more important as current grid infrastructure ages and regions begin connecting more variable generation from renewable energy sources into the electricity network.

Despite a 19 percent decrease in smart grid spending from 2011, last year the United States maintained its status as the global leader in smart grid development.. While the federal government has funded smart grid development and supported deployment projects throughout the country, the efforts have been amplified by the many individual utilities that are contributing their own efforts to update grid infrastructure. By the start of last year, U.S. smart grid development efforts had resulted in 37 million smart meters covering a third of American households. Continued efforts by utilities to deploy smart grid solutions will become increasingly important in the U.S. as federal funding initiatives enacted under the American Recovery and Reinvestment Act of 2009 begin to expire.  

But as investment in the U.S. declined, smart grid investment in China experienced another year of growth. Included in the massive overhaul of its inefficient transmission infrastructure has been the deployment of wide-scale smart grid technology. The country’s investment in smart grid technology accounted for 57 percent of all smart grid investment in Asia, an already very active region for smart grid development: the continent accounted for around 40 percent of global investment, with Japan and South Korea heavily focused on development plans and installations.

Meanwhile, the European Union saw lower financial investment than the United States or Asia, but has established smart meter installation mandates in recent years and is funding research and development programs focused on smart grid technologies. Electricity Directive 2009/752/EC requires that by 2020 EU member states deploy smart meters in 80 percent of households where the cost-benefit analyses for installations is positive. Smart grid progress in individual countries in Europe varies at present, with high penetrations of smart meters in some and planned nationwide smart meter rollouts in others.

Energy storage technologies offer their own benefits to the modern electricity grid, but can also act as alternatives to or complements of smart grid infrastructure. The number of energy storage projects worldwide rose 19 percent in 2012. Pumped hydropower still dominates all global energy storage infrastructure, accounting for 98 percent of installed storage capacity globally. However, the location-dependent aspect of pumped hydro and the recognition of the growing need for grid-tied energy storage have put emerging technologies, such as advanced batteries, into sharper focus as well.

Smart grid networks and energy storage technologies are gaining traction in energy sector development plans with larger-scale deployments currently beginning or being planned for the near future. The next few years will likely see numerous nationwide smart grid deployment projects and advancements in energy storage markets. The success of these developments will surely influence the respective paths of each technology’s development. 

Read the full report at Vital Signs Online.

Reese Rogers is a MAP Sustainable Energy Fellow at the Worldwatch Institute.