Sunday, October 18, 2009

Smart Grid - Why utilities don't participate in Smart Grid initiative?

There are many utility experts that don’t see the benefits of Smart Grid initiative. As consequence, we might get into new high tech bubble situation. Without utilities’ participation the stimulus and other money might not be spent wisely.

Last week, I have heard one of local (Alberta) utilities’ VP saying that AMI investment can not be justified. Those smart meters (AMI) for residential market for example are going to be obsolete in 5-7 years, while financial calculations for those equipment amortisation through energy saving are based on 30 years.

On the other hand, US DOE consultants are saying that each percent of T&D system efficiency improvement means billions dollars in savings. The DOE claims that cost of outage is $500 per capita per year in the USA and probably in Canada as well. Now, it seems to me, that the utilities don’t see the situation the same way as the others.

Now, the question is “why?” Why the utilities are not motivated to participate in Smart Grid initiative? Is it because the cost of outage is much bigger for the end user of energy (mostly commercial and industrial), compared to utilities’ cost of “energy not delivered” during outage? Is it because the AMI is dominant focus in Smart Grid initiative, instead of focusing on substation automation and integration?