Most electrical power networks are antiquated. In North America, for example, much of the electrical transmission and distribution infrastructure is more than 50 years old, and was not designed to handle modern load requirements, or to provide much in the way of information to system operators. In order to respond in a timely way to the increasing power demands of modern consumers and businesses, utilities need to upgrade the current grid to a “smart grid” that will allow electricity producers to match energy demand with supply efficiently over an integrated, continuously monitored, resistant-to-failure electrical network.

According to a new study by NextGen Research, “Smart Grid Applications: Demand Response, Decentralized Generation and Smart Meters Increase Electrical Networks’ Capabilities, Efficiency and Reliability” (URL: http://www.nextgenresearch.com/research/1002016-Smart_Grid_Applications) utilities and governments around the world spent more than $12 billion upgrading, strengthening and “smartening up” their electrical power grids in 2008, an amount projected to grow to more than $33 billion through 2014.

The study’s author, research analyst Atakan Ozbek, says he found no clear leadership of the smart grid sector between North America and Europe, the two regions showing the highest levels of smart grid-related development. “While the European markets have a higher number of installed smart meters, one of the essential components of future smart grid networks, the US smart grid market has seen a greater level of activity since late 2007.” He adds that by the end of the study’s forecast period (2014), the US will overtake Europe in its number of smart meters installed.

Mr. Ozbek finds it encouraging for the smart grid sector that governments are allocating billions for upgrades to existing electrical networks to improve their reliability, interactive capabilities, and openness to renewable energy sources. However, he says, a lack of industry-wide smart grid standards is hindering the sector’s growth potential. A number of different electrical and electronic/IT systems must cooperate in a smart grid; a lack of standards means integrators must learn which systems will work together out of the box and which require substantial additional integration. “The early movers, like PG&E and Austin Energy, should take advantage of their early participation in the field to establish open standards,” which would allow smart grid deployments to progress more quickly, with predictable costs.

NextGen Research is the emerging technology arm of ABI Research (www.ABIResearch.com). NextGen Research informs clients of the outlook for applications currently in use and the opportunities presented by new technologies, so they can make sound business decisions. For more information, please visit www.NextGenResearch.com, or call +1.516.624.2526.