Smart Grids Explained

Male Speaker: Electricity is fundamental to modern society and the economy. However, most of the world relies
on electricity systems built around 50 years ago. These are inefficient and cannot offer
an appropriate response to today’s urgent global challenges. There is an estimated $13 trillion
investment required in energy infrastructure over the next 20 years. This poses an imminent need and opportunity
to shift towards a low-carbon, efficient, and clean energy system.
Smart grids will be a necessary enabler of this transition. What is a smart grid? A smart grid is an intelligent, digitized energy network delivering electricity in an optimal way from source to consumption. This is achieved by integrating information, telecommunication, and power technologies with the existing
electricity system. The benefits of a smart grid include
improved efficiency and reliability of the electricity supply, integration of more
renewable energy into existing networks, supporting the development of electric
vehicles at scale, new solutions for customers to optimize their electricity
consumption, reduction of carbon emissions.
According to John Krenicki,  Smart grid is not just about improving the existing infrastructure that powers our world. It is about realizing the full potential of what we can offer.
New transport solutions, support for new economies, and to use the resource we have
in the most effective and efficient manner.
The World Economic Forum’s September 2010 report, “Accelerating
Successful Smart Grid Pilots”, developed in partnership with Accenture and industry
experts from across the smart grid value chain, outlines the industry’s challenges
and conditions for success. Governments are increasingly recognizing
the value of smart grids. China aims at building a strong
smart grid by 2020. The U.S. has dedicated $4.5 billion
of its fiscal stimulus package. Significant initiatives are currently
underway in Europe, Japan, Australia, and Korea. Are smart grids guaranteed to succeed? To ensure that public and private money is spent effectively, smart grid pilots must be successful in testing all aspects.
A poorly planned and executed pilot can set back the adoption of smart grids
and negatively impact the public perception of low-carbon technologies. Deploying smart grids at scale will
be challenging, but successful pilot projects can set the direction. From discussions and research in some of
the 90 pilot projects underway worldwide emerged a series of lessons that can improve
the effectiveness of existing and planned pilots and accelerate
their transition to full-scale roll-out.
According to Mark Spelman, Smart grids are absolutely
fundamental if we are going to achieve some of our climate change objectives.
If you like, smart

grids are the glue. They are the energy Internet of the
future and they are the essential component which is going to bring
demand and supply together.  Ken Hu wants to talk about the smart
grid from the ICT’s perspective. Information technology will not only support
the smart grid to be automatically observable and controlled.
More importantly, it will help us to achieve the region of smart
grids for everyone.

The one concern that James E. Rogers has is that we oversell the value of it because it’s going to take a while to roll
it out, and it will enable things like a plug-in electric vehicle but it’s going to enable things we can’t yet imagine. So I think it holds great promise for the future, and it’s really critical that we make the economic decision today to implement it so that we can prepare for tomorrow.
Pilots should be used to improve regulatory incentives. Regulators have a critical role to play
in creating innovation reward schemes that align incentives across the electricity
value chain, and encourage utilities and their partners to develop
new technologies, operating and business models while acknowledging
the risks involved. Pilots need to develop greater consumer
insight and systematically engage with consumers. Utilities will need to develop new business
models, attract everyday customer value propositions, and ways to communicate
them clearly to ensure adoption.
In the mind of Peter Corsell, the most important success factor is consumer acceptance.
Having a smart grid pilot that provides value to consumers, that provides applications
that help consumers reduce their energy bill and gain visibility
and control will I think provide the foundation for popular support for smart
grid investments throughout the industry.
Decision makers need to take on board these recommendations to deliver smart grids, a cornerstone for
a low-carbon, efficient, and secure energy future.

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