Smart is the enabler for more secure, affordable and green energy in the future.
There are some pressing challenges transforming the power and utilities (P&U) sector:
- How to make energy systems less carbon-intensive and less dependent on fossil fuels by integrating decentralized and intermittent renewable energy into the electricity grid
- How to increase energy efficiency to meet growing demand, given the increasing scarcity of energy resources
- How to increase access to energy, decrease the likelihood of black-outs, make energy more affordable or keep up with demand for power – in accordance with national agendas
To address these challenges, new and more intelligent electricity systems are needed, including new communications structures, better utilization of IT, and the active participation of consumers.
The solution? Smart grids.
Vision for the future
What is smart? It is the enabler for more secure, affordable and green energy in the future. Smart will have an impact on businesses across the value chain, from production to transmission to retail sales.
Smart will affect every aspect
of the value chain
What will the industry look like in, say, 10 years' time?
That depends on the speed of change and whether smart is treated as an infrastructure upgrade, an evolution or the beginning of a revolution.
For example, National Grid, one of the world's largest utilities, anticipates an evolutionary approach in the UK market. Microsoft even believes that a revolution has already started and concludes that the disruptive nature of the smart grid revolution has surprised many in the industry.
In most cases, smart will bring about changes in electricity production — incorporating much greater use of renewables and decentralized generation.
Smart meters and grids will provide utilities with new sources of revenue — from, for example, a mass roll-out of electric vehicles — as well as many opportunities to decrease costs by better matching energy production to demand. And consumers will become "prosumers," generating and reselling their own energy and playing a more active role in their energy consumption and management.
In particular, smart will have a major impact on: