Annual global spending on smart grid technologies, including smart meter implementations, as well as upgrades to transmission and distribution infrastructure, is expected to reach $65 billion by 2017.
Much of the electricity infrastructure in operation today is antiquated, highly inefficient, and cannot reliably manage the loads of today and tomorrow without significant upgrades taking place. With climate change high on the political agenda and utilities keen to increase operational efficiencies, there is an obvious and pressing need for a complete overhaul of all aspects of the grid in order to make it smarter. To this end, work has begun on ensuring that the smart grid will soon become a reality with large-scale smart metering deployments, which are the most visible example of these efforts.
However, the installation of smart meters is just the tip of the iceberg as far as the smart grid is concerned. “A number of major utilities throughout the world are either actively engaged in or planning the enormous task of connecting grid assets such as substations, capacitor banks, and transformers to their head-end systems for improved monitoring, control, and automation,” says Craig Foster, senior analyst, home automation and M2M. “This involves the installation of a plethora of sensors, controls, and other grid optimization solutions such as synchrophasors and advanced reclosers.”
As such, transmission and distribution (T&D) investments are expected to account for the lion's share of smart grid investments up until 2017. On a cumulative basis, a total of almost $278 billion will have been invested globally in T&D infrastructure by this time, compared to $48 billion for the purchase of smart meters, thus illustrating a smart grid opportunity that goes way beyond advanced metering infrastructure.