Whats the real price of smart grids?

Published: Mon 22 Jul 2013
A blog entry by Sasha Bermann

Contributed by:

Sasha Bermann
Chief Dissemination Officer

Sasha Bermann's Blog

The very first question in all discussions about smart grids is: Do we really need them? The pros and cons arguments are provided and it turns out the worst thing about smart grids is actually their cost. It is incredibly expensive!

According to Worldwatch Institute global investment in smart grid technologies amounted to USD 13.9 billion worldwide in 2012. The natural question which arises next is: How much does it cost for the consumer? According to our research, which is done with the support of Ventyx, ABB company, the answer is USD 390 and excluding smart meters cost, the smart grid cost for the consumer is roughly USD 200. It does not seem too much. How did we come to this conclusion? We selected 30 of the best from the 200 demonstration projects, collected information from initiating utilities and performed in-depth analysis of core Smart Grid Pillars, namely economic benefits, environmental impact, consumer impact, reliability & resilience and innovativeness. These 30 projects are located in 16 countries within 5 continents, they represent USD 9.5 billion investment and cover over 24 million customers. Uncomplicated mathematical calculations give us a cost per customer of USD 390. Taking into account the fact that most of the projects have a reduction of peak demand and consumption reduction as their goals, which presumably should lead to increased savings for the consumer, it is possible to conclude that the investment should pay off without an increase of electricity bill in couple of years.

To find out what are the obstacles, what predetermines the success of the project and which innovative solutions were applied in real life cases, read the Smart Grid Spectrum report publically available in September on our website: www.vaasaett.com