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How the Smart Grid will Evolve in 2012

Aging grid infrastructure, rising energy costs and demand, and new and pending government legislation are some of the factors motivating consumers and utilities alike to seek more energy efficient, sustainable solutions. Smart grid technologies are the key to addressing these challenges and bringing energy management to the masses.

2012 will prove to be another exciting year to watch the smart grid market evolve. Here are a few top trends to expect next year:

1) Distributed Automation takes centre stage

Many utilities are preparing to leverage smart grid technologies to deliver improved reliability through increased automation.  Distributed Automation (DA) is a key element to this strategy as it enables two-way communication with substations, power lines, intelligent devices, and other physical facilities. As a result, utilities are able to remotely monitor and control systems, automatically identify and isolate faults and quickly restore service.

DA is set to play a significant role in smart grid infrastructure. Two drivers of this trend are: the expected proliferation of plug-in electric vehicles (PEVs) and distributed energy resources (DER) such as renewables.

IDC predicts that there will be 120,000 PEVs sold in North America in 2012. Consequently, the rate of DA adoption will accelerate as utilities seek to provide power to meet the added load requirements from EVs, while simultaneously maintaining grid reliability and safety.  Additionally, DA will be increasingly important as utilities seek to integrate distributed renewable generation resources into the grid.

Over the past 30+ years, DA has helped the utility industry realize cost savings and improve operational efficiency, reliability, and energy conservation, and its impact is projected to continue to grow in coming years (Pike Research forecasts that DA revenues will reach $10.4 billion by 2014, up from $2.7 billion in 2010). 

2) Demand response becomes ubiquitous

By enabling energy users to adjust power consumption based on signals from the grid, demand response (DR) provides a more efficient and less expensive way to use energy.

In recent years, DR has evolved from an economic and reliability tool towards being an active energy management solution. Building owner participation in DR stands to result in significant environmental benefits and help utilities improve grid reliability while meeting increasing energy demand.

Legislation is also encouraging commercial buildings to participate in DR programs.  For instance, the Federal Energy Regulatory Commission (FERC) recently issued ruling 745, which puts DR resources on par with traditional generation resources, enabling building owners to generate a revenue stream through DR participation. Additionally, the U.S. Green Building Council (USGBC) recently announced plans to release an updated LEED DR Pilot Credit which will establish guidelines anticipated to increase participation in automated DR programs.

On the residential front, the proliferation of smart meters and home automation systems in recent years has enabled residential DR participation. As an increasing number of homeowners hear about energy management programs from utilities, DR participation in the residential sector will continue to rise.
3) Cyber Security will continue to be an important focus

Along with the benefits associated with smart grid infrastructure, there are some security challenges that utilities need to consider. Security is clearly a priority – Pike Research estimates that utilities will invest $14 billion, between 2011 and 2018, in cyber security solutions to secure their infrastructure.

Security vendors will increasingly focus on industrial control system (ICS) security to better secure transmission systems, substation automation, and distribution automation.  In the past, security vendors have placed a large focus on IT security functions, such as AMI security. In the coming years, we expect to see increased attention paid towards cyber security solutions which focus on securing control system segments.

4) Utilities will invest in analytics to extract value from big data

Sensors and other smart grid technologies are producing a vast amount of data which, if monitored and analysed properly, can lead to key insights about energy usage patterns and ultimately result in economic and environmental benefits and improved grid stability.  However, managing this data can be overwhelming. The ability to process and analyse data in real-time will be essential for the smart grid.

In 2012, utilities will begin to investigate analytics solutions, and we expect to see broad adoption by utilities over the next two to three years.

5) Utilities will reassess smart grid training, education and communication


The root philosophy behind the smart grid is that open communication between utilities and end-users will help change (for the better) the way we manage and consume energy.  The bi-directional flow of information remains a new concept to many utilities; as a result, education and training of utility stakeholders and customers on the benefits is important. As illustrated by The Smart Grid Consumer Collaborative’s (SGCC) recent report on consumer engagement, over the next few years there will be an increased focus by organizations and utilities with consumer-facing smart grid programs on educating and communicating with consumers about smart grid strategies.

Although it is still early to focus on consumer adoption and education, we will start to see players in the smart grid industry and regulators aim to turn consumers into smart grid advocates through enhanced communication campaigns.

2012 will be a transitional year for the smart grid market as smart grid technologies and solutions increasingly become seen as a key to addressing our country’s energy challenges.  Through the smart grid, utilities and consumers will be able to work together to manage energy more efficiently, resulting in improved energy efficiency and lower costs.  Although there is still work to be done, 2012 will be an exciting year to watch as these trends unfold and we work towards making the smart grid a reality.

By. Donald Rickey

Article provided by The Daily Energy Report

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