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Hurdles remain in the race for smart grid deployments

SUBNET Solutions Inc | Friday, September 21, 2012

Many utilities may be overconfident in their abilities to control the power grid, and if the smart grid is expected to flourish, these power companies will need to understand that the grid is indeed susceptible to many disruptions, a new Pike Research study shows.

The most recent reminder of the frailty of electric power grids was what has come to be known as the Great Indian Blackout in August, when more than half of the country's residents lost power. However, these types of reminders may be necessary to encourage higher spending to create a more reliable, efficiency and sustainable power distribution system.

According to Pike's Muni Smart Grid 2012: A Survey of Utility Deployment, Expenditure and Strategy, this higher level of spending may fall on the municipal utilities. Although these companies are a highly fragmented section of the smart grid industry, they are equally important. Still, many utilities are not given due credit when it comes to the smart grid projects they've taken on.

Already, 75 percent of investor-owned utilities have started smart grid deployments, ranging from advanced metering infrastructure rollouts to the installation of substation automation and other technologies. According to GTM Research, these developments are expected drive the next phase of smart grid spending, during which municipal leaders will spend as much as $7 billion in new installations through 2017.

"Integration will be the key to addressing the municipal market and the vendors most capable of integrating legacy hardware and networks will stand to benefit the most," GII said in an accompanying release. "We also anticipate strong demand for next generation applications, which leverage the capabilities of AMI and legacy AMR systems at early-adopter utilities."

The report also noted that the global smart grid SCADA systems market for transmission and distribution substation automation is also growing at a healthy pace, however there is ample room for it to pick up more, depending on the location of projects and the types of devices that are installed. Global revenue from these devices is expected to grow at a 7 percent CAGR from 2012 to 2020.

One of the newest and most ambitious smart grid projects is currently underway in New Mexico, and is a joint effort between the U.S. and Japanese governments.

According to GigaOm, the project was under construction for a year before going live in September, and now that it is online, is expected to provide ground breaking demonstrations on how smart grid technology can better integrate renewable energy sources into the electric grid. Both parties recently held a kickoff ceremony to celebrate the $52 million project, which will test solar power, energy storage and electrical grid management, and how data from these processes can be analyzed.

The media outlet states that utilities will face never-before-seen technical and operational challenges as they introduce renewable energy systems into the grid. Due to the intermittent nature of these sources - meaning they can only generate electricity under certain conditions - utilities will need to develop ways to ensure an even flow of power. It will be up to the nation's grid operators to determine how to cover any drops or surges of energy that are caused by renewables.

Although the New Mexico project is gaining the most press now, several other utilities and municipalities are beginning their own smart grid deployment projects to meet new regulations on renewable energy.

SUBNET's products and solutions can be used by utilities to help gather, manage and analyze the huge amount of data that will be extracted from the smart grid, ensuring operational efficiency among companies. 

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