A new report by ABI Research on utilities and smart grids spotlights the rapidly increasing capital investment in the component technologies that form the backbone of smart grid infrastructure. We have discussed aspects of the smart grid in the past here and here but the pace of investment is becoming parabolic as the benefit and value of the technology is becoming more profound.
A smart grid is an electrical grid that uses information and communications technology to gather and act on information, such as information about the behaviors of suppliers and consumers, in an automated fashion to improve the efficiency, reliability, economics, and sustainability of the production and distribution of electricity.
According to the ABI Report,
Spending by utilities transitioning their networks to Smart Grid capabilities reached $23.68 billion in 2012. Highlighting the growing momentum behind the spending, 2012’s total alone represents 48% of Smart Grid spending to date. During the year, spending on transmission and distribution capabilities surpassed smart meter investments as utilities increasingly looked to improve their core networks and maximize the benefits of their growing Advanced Metering Infrastructure (AMI) deployments.
Smart grid spending in 2012 was up 47.1% from $16.10 billion in 2011 as remaining government stimulus funds were spent in the United States and utilities around the world increased their own investments. Even so, these remain the early years of Smart Grid investments and spending will continue to grow over the next five years to reach $80.8 billion during 2018.
Key areas for strategic investment in the smart grid build out remain the same as they have been for the past decade, including:
- Demand Response
- Grid Optimization
- Distribution Automation
- Software and Application provision
- System Integration
You can read more of ABI’s research on smart grid here.