China’s state-owned State Grid Company of Chinasigned a strategic cooperation agreement last month with General Electric to develop smart grid protocols in the country. The news was another step toward opening the world’s second-largest consumer of electricity to cutting edge smart grid technology. The State Grid Company had previously set an aggressive target of building a robust smart grid in China by 2020 and plans to invest $600 billion in developing its national smart grid over the next decade. [Disclosure: GE is an investor in Consert, the company I work for.]
China exceeded the United States in federal smart grid subsidies for the first time in 2010, and it looks poised to increase that lead if the US government doesn’t take further action. Utilities in the US are not centrally controlled like State Grid in China, so investment in smart grid technology must come from the private sector rather than government funding.
China operates its state-owned industries like businesses. It aims to decrease the amount of money it must spend to build additional generating capacity by using existing energy production with smart grid technology. Through smart grid installations, China will be able to accurately predict and control energy consumption, lowering costly demand peaks and decreasing downtime.
US utilities that are contemplating smart grid investments would be prudent to consider the undertones of China’s smart grid initiative. China’s central planners have seen the economic benefits of large-scale smart grid expansion and are quickly moving to integrate new technologies to realize that economic promise. US utilities should accelerate plans to add intelligence and real-time data gathering to their footprint, so that they, too, reduce the need to build additional generating capacity and lower their demand peaks. As Jesse Berst writes in SmartGridNews, utility commissions “focus far too much on the initial, short-run costs instead of total lifetime cost.”
Utilities should consider programs like the ARRA Smart Grid Investment Grant Program, which pays 50 percent of eligible project costs for smart grid development to help modernize their operations. Instead of relying on estimates of demand, utilities can leverage smart grid technologies such as device-specific load resource management to better understand the energy usage of their consumers, so that they can operate more efficiently and increase profitability by lowering demand peaks.
Jeff Ebihara is vice president of sales and marketing at Consert, an energy management systems company based in Raleigh, N.C. He has significant experience in the telecommunications and energy industry
SOURCE : VentureBeat
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