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EPRI Analysis estimates costs of fully developing US smart grid could reach $476B; benefits up to $2T

Total Smart Grid costs. Source: EPRI. Click to enlarge.

The Electric Power Research Institute (EPRI) has released a broad assessment of the costs and benefits to modernize the US electricity system and deploy the smart grid. Factoring a wide range of new technologies, applications and consumer benefits the investment needed to implement a fully functional smart grid ranges from $338 billion to $476 billion and can result in benefits between $1.3 trillion and $2 trillion.

The analysis updates EPRI’s 2004 EPRI assessment, which estimated the cost of implementing a smart grid at $165 billion. The updated analysis assumes steady deployment of smart grid technologies beginning in 2010 and continuing through 2030. Mark McGranaghan, EPRI vice president of Power Delivery and Utilization, says the increased costs of the current analysis reflect a more advanced and expansive vision for the smart grid.

Plug-In Electric Vehicles (PEVs)
EPRI’s Prism analysis estimates a potential CO2 emissions reduction in 2030 of 9.3% as a result of electricity displacing gasoline and diesel to fuel a substantial portion of the vehicle fleet. EPRI bases this estimate on the rapid growth of market share to almost half of new vehicle sales within 15 years.
EPRI Prism analysis assumptions include 100 million PEVs in the fleet by 2030; and the fraction of non-road transportation applications (e.g., forklifts) represents three times the current share by 2030.
Net emissions reduction estimates factor in vehicle miles traveled, carbon savings from gasoline not burned, and the trend for the electric system to become “cleaner” – i.e., for an increasing share of power generation to emit less or no CO2.

The new estimate reflects new technologies related to the grid, information, and communication technologies; market structures; demands of an increasingly digital society; more widespread deployment of renewable power production and its integration into the grid; expansion and maintenance of existing infrastructure; and technologies and systems to address grid security.

The report says that the benefits of the Smart Grid are numerous and stem from a variety of functional elements which include cost reduction; enhanced reliability; improved power quality; increased national productivity and enhanced electricity service, among others. The Smart Grid will allow the benefits resulting from the rapid growth of renewable power generation and storage as well as the increased use of electric vehicles to become available to consumers.

Without the development of the Smart Grid, according to the report, the full value of a lot of individual technologies such as Electric Vehicles, Electric Energy Storage, Demand Response, Distributed Resources, and large central station renewables such as wind and solar will not be fully realized. Benefits of the Smart Grid include:

  • Allows Direct Participation by Consumers. The smart grid consumer is informed, modifying the way they use and purchase electricity. They have choices, incentives, and disincentives.

  • Accommodates all Generation and Storage Options. The Smart Grid accommodates all generation and storage options.

  • Enables New Products, Services, and Markets. The Smart Grid enables a market system that provides cost-benefit tradeoffs to consumers by creating opportunities to bid for competing services.

  • Provides Power Quality for the Digital Economy. The Smart Grid provides reliable power that is relatively interruption-free.

  • Optimizes Asset Utilization and Operational Efficiently. The Smart Grid optimizes assets and operates efficiently.

  • Anticipates and Responds to System Disturbances (Self-heal). The Smart Grid independently identifies and reacts to system disturbances and performs mitigation efforts to correct them.

  • Operates Resiliently against Attack and Natural Disaster. The Smart Grid resists attacks on both the physical infrastructure (substations, poles, transformers, etc.) and the cyber-structure (markets, systems, software, communications).

Estimated benefits of the Smart Grid. Source: EPRI. Click to enlarge.

The project team analyzed projected costs over the next 20 years, looking at core smart grid technologies in four areas: transmission, substation, distribution and customer interface. It then subdivided estimates into two segments:

  • Investment required to meet load growth and to correct deficiencies – such as power flow bottlenecks and high-fault currents that damage critical equipment -- through equipment installation, upgrades and replacement.

  • Investment needed to develop and deploy advanced technologies to achieve “smart” functionality of power delivery systems.

The assessment found that deploying a smarter grid will require careful policy formulation, accelerated infrastructure investment, and a greater commitment to public-private research, development and demonstrations to overcome barriers and vulnerabilities.




The thing they probably leave out is that a very large percentage of the grid has to be replaced every 30 years or so anyway, and that a lot of this would be maintenance of upgrade, rather than purchasing from scratch. So, over the course of a few decades, this is just being paid for out of petty cash.


"Operates Resiliently against Attack and Natural Disaster. The Smart Grid resists attacks on both the physical infrastructure (substations, poles, transformers, etc.) and the cyber-structure (markets, systems, software, communications)."

Sorry, this is just plain not true. A "smart" anything that is not hardened against nature and attack - is more vulnerable than a plain vanilla system. With all the "smarts" in a smart grid, susceptibility to sabatoge, natural elements and hardware/software failure - increases.

They're still stringing high voltage wires all over the landscape, still building sub-stations, installing transformers, poles, wires - all exposed and vulnerable. Smart grids are over-engineered, over-blown, big tech projects that could be replaced with low cost, low maintenance home appliances. Distributed energy centered around CCHP eliminates power poles and wires, transformers, exposed wiring and unnecessary computer processing.

The way to generate energy going forward is via distributed energy systems CCHP. Residences and small business will accept responsibility for small energy appliances that deliver efficient electricity, hot water, heating and chiller cooling. That would alleviate the demand to build and maintain even more big nukes or coal or NG power plants. THAT is smart.


The fact is we all know the cost will be 10x higher and the benfit 10x lower then they say.. because its always that way.

Best to just wait till its just regular replacement and thus doesnt cost anything to add in.

But nooo we will waste a trillion or 3 doing this because some of that money lines the pockets of those in power... on all sides.


Good points W-2000. If done over a 30 to 50 years periods, on an as required basis, starting with the oldest existing areas, the real added cost would be much lower, if any. A fully integrated, fail save, ultra smart grid is not required nor possible over night.

Partial distributed e-energy production is a possibility but not everybody will be interested and a power grid will always be required. To make a power grid more acceptable, power cables could be buried, even high DC Voltage lines. It would add another $0.01/Kwh but it is technically and financially possible.

Henry Gibson

A few years ago a 400000 Volt direct current cable was run from Norway to the Netherlands under the sea and under the ground. There were two lower voltage(30000 Volt) direct current circuits sent from Norway to a gas production platform to save on expense and carbon release whilst running two large compressors with inverters and 30000 V Cablewound AC motors.

Before a road of any kind is paved or repaved an inter connected direct current cable should be put into place to start the creation of an underground DC grid that is easier to use than an AC grid now that semiconductors are available. Mass production will make the DC to DC equipment cost effective and efficient.

Natural gas pipelines are also a grid that supports distributed cogeneration. Not one natural gas fired central power plant should be built again, but all large and many small buildings can have gas fired long life turbines and engines. ..HG..


HG: I agree with you with regards to buried DC lines (high and low voltage) possibilities. Selective local co-generation NG systems would not completely replace the existing e-power grids unless selected areas are 100% converted. That's not for tomorrow. Not every areas are connected to NG grid. In our Province, less than 12% have NG lines but 100% have e-power lines and low cost clean hydro power.

I for one prefer clean e-power with buried transport and distribution lines. More efficient appliances, displays, lights, computers etc and specially very high efficiency combined (hot-watter-cooling-heating-ventilation) heat pumps in every home could liberate enough e-power to operate one or two+ electrified vehicles per family.

No new extra e-power has to be produced for electrified vehicles. An all out e-energy efficiency program could liberate more than enough energy. We reduced our daily consumption for our all electric home from 65 Kwh to 22 Kwh (enough for 4 to 8 BEVs) and increased our comfort level at the same time. A combined very high efficiency heat pump to include hot water could lower our consumption by another 5+ Kwh/day. Technology may be the solution.

Johnny B Good

Does anyone know what is better than the Smart Grid?

No Grid !

Think about it.


JBG: Would you beam in e-energy to every household or use solar cells or other type of solar energy transformer?

We all have running water. May be we could find ways to transform it into e-energy. Using NG is not a sustainable way.


I am not really sure what a smart grid is. It sounds good, but what is it and what can it do for me and how soon at what cost?


I don't think that a worldwide accepted standard definition of a 'smart grid' exist yet. It's a lot like the definition of electrified vehicles.

It would be fair to assume that a 'smart grid' should be failure prove and include, but not be restricted to following features:

1) automatic bypass of failed lines.
2) automatic re-routing and re-balancing of the grid.
3) automatic disconnect of troubled production plants.
4) automatic re-start and stop of peak load plants.
5) automatic short term disconnect of non-essential loads at users to avoid grid overload, i.e. EVs, Hot water heaters, Dryers etc.
6) automatic connection of participating users EVs and/or fixed e-storage to feed the grid during peak loads.
7) variable rate bi-directional meters to all participating users.



should read .....DOES Not exist yet.....

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