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technology review January/February 2011
nies that have little economic incentive to
invest billions in infrastructure.
China, where a significant portion of the
grid is only now being built up for the first
time, spent more than $7.3 billion of govern-
ment funds on its smart grid in 2010. The
United States has also made considerable
federal investment in upgrades, with $4.5
billion in 2009 stimulus funding allocated
specifically to developing smart-grid tech-
nologies and $6.5 billion in increased bor-
rowing authority for power agencies in the
Northwest to build new transmission lines.
But these figures are still just a fraction of
the total required: a 2004 estimate by the
industry-funded Electric Power Research
Institute pegged the cost of upgrading the
U.S. grid at $165 billion over 20 years, and
the figure is still considered accurate.
With so much uncertainty, is there any
new business model that would compel utili-
ties to spend billions on the smart grid?
“ That’s the million-dollar question,” says
Steve Hauser, of the U.S . National Renew-
able Energy Laboratory. “I’m not sure that
anyone has an answer to that.”
— Dave Levitan
Global electricity generation in 2008;
68 percent of this electricity was
produced by burning fossil fuels.
Smart grids alone could help curb the
need for additional power plants and
decrease carbon emissions. But they’ll do
even more good where they can be com-
bined with new heating and transportation
systems, whether that’s on the scale of an
individual building or of an entire city.
“In most places we’ve got completely
separate power, heat, and transport sys-
tems,” says David Clarke, CEO of the U.K .’s
Energy Technologies Institute, an organiza-
tion jointly funded by industry and the Brit-
ish government. Because power generation
appears to be the easiest energy system to
“decarbonize,” Clarke foresees that nearly all
heating and transportation will eventually
be brought under the electrical umbrella,
through technologies such as electric vehi-
cles and residential heat pumps that use
the air or ground as a heat source or sink.
Before that all-electric future arrives, Japan
over the horIzon
a 2050 U.K . co2 emissions target of 125 mil-
lion tons demands a combined energy strategy.
Source: Energy Storage Association
Note: *Does not include $6.5 billion in increased
borrowing authority. Source: Zpyrme
Global smart-appliance market
(in billions of dollars, 2010)
Source: Energy Technologies Institute.
667.2 mil. tons
U.K. annual CO2 Emissions
(millions of tons)
Source: Energy Technologies Institute
564.76 million tons
International aviation and shipping
U.K. annual CO2 energy emissions
(in millions of tons, 2008)
U.S. wind and solar power capacity
Federal stimulus investments by country
(in millions of dollars, 2010)
Storage technology energy densities
(kilowatt-hours per ton)
Miyakojima Island Smart
Grid, Japan (okinawa
Using a small island as a test bed, a Japanese con-
sortium is developing systems for renewable power
generation, grid integration, and energy storage.
Pacific Northwest Smart
Project, United states
(Battelle and Bonneville
Involving 60,000 consumers spread over five states,
this project will test every element of a smart grid.
HVDC transmission net-
work, china (state Grid
corporation of china)
high-voltage Dc transmission lines are being built
to transfer energy from remote hydropower plants
to cities more efficiently than is possible with tradi-
tional ac systems. The chinese are building some of
the world’s highest-voltage Dc systems (up to 1,000
kilovolts) over distances well over 1,000 kilometers.
The consortium is deploying six demonstration proj-
ects over three years to show how wind power can
be integrated with the grid.
Project, arizona (arizona
Public service company)
Enough solar panels to generate 1.5 megawatts are
being installed to see if the grid can cope with hun-
dreds of distributed generation sites and the variabil-
ity of solar power.
proJeCts to WatCh
Demonstrations and Upgrades
Jan11 Briefing.indd 68
12/8/10 7:17 PM
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