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.