Memoori’s annual report, The Smart Grid Business in 2011-2016, shows that the step by step approach to its development applied in the last 5 years is flawed.
Even if you don’t have a new canvas, you need to have a clear vision of how you are going to join the parts together before you start, and this is only now being considered. When the early adopters come to deliver the holistic solution, they will find it more difficult and expensive to achieve
Leonardo Da Vinci was obliged to finish off his first version of “Virgin of the Rocks” some 25 after being first commissioned; forensic evidence now shows that he totally rebuilt the framework of the painting which then allowed him to incorporate all the technical improvements of light and shade, expression, beauty that he had since mastered.
No simple refining of minor details (which is all he was paid to do) but a complete retrofit that is now---some 528 years later---one of the world’s finest paintings.
We are now faced with restoring an outdated and inefficient electrical grid and a supreme challenge to provide one that meets the needs for a low carbon economy. Do we now rebuild the framework in order to achieve this, or do we play around at the edge and go for incremental improvement that we hope can be seamlessly joined together later?
Sadly we are going for the later in most regions of the world. We are investing where the quickest ROI can be achieved commensurate with lowest technical risk, and that, in most cases, is putting maximum investment in smart meters. We have the opportunity to rebuild the framework with the latest digital communications and control technology and analytical software and produce an Internet of Things (IOT) and test this out at full-scale. Had the Leonardo mindset been applied some 5 years ago, we now would have been close to a total solution that could be transferred around the world. Yes, we are working on it now, but it's well behind where it should be today.
Should we be surprised that this solution was not adopted? Possibly not. Faced with a $2000 billion investment, this was always going to be swayed by eco-political matters and restricted by existing regulatory frameworks and a need to drastically change the architecture of the grid. These are formidable barriers to overcome in order to deliver a truly smart grid.
Our report clearly shows that the breakdown of investment so far is heavily biased to smart meters, currently taking by far the largest single segment spend in the smart grid business in almost all countries in the world. The spend over the 20-year period will be approximately $194 billion representing approximately 9% of the total budget and will reach its maximum peak by 2014.
The latent potential for AMI complete with smart meters amounts to approximately 9%; while current sales took almost 40% of the pure smart grid market in 2010.The prime reason that smart meters have run away with the investment dollars is that they are considered by the utilities as a relatively safe bet to provide a return on their investment.
However, the basic grid topology was built on stand-alone facilities offering limited, if any, interactive networked intelligence, and this is a more expensive and technically demanding challenge for smart grid. It will require an investment of some $1620 billion and is running some 10 years behind smart meter penetration.
This will mean that the full benefit of AMI will not be realized well after it has been installed, but, more importantly, it would appear that our salivating on this irresistible low hanging fruit has held back progress on other vitally important issues. Insufficient attention has been given to developing open communication standards and delivering a solution for protecting the grid from cyberattack.
We firmly believe that, in 10 years time, when we are in the midst of trying to seamlessly join up and secure smart grid and counting the cost, we will wish we had spent more time and effort in doing a da Vinci on it.