Study: Smart Grid Technologies Can Yield $110M Annually for Typical Utility

A new study, Smart Grid Economics: Making the Business Case for Smart Network Technology, says the typical electric utility can profit from the benefits of Smart Grid technologies to the tune of at least $110 million annually. The study, released by the Utilities Telecom Council (UTC), cited a variety of benefits, including an increased rate of return, lower carbon emissions and the creation of new jobs.

The study was conducted for UTC by The Shpigler Group. Shpigler used a sophisticated financial model and calculated the economic effects of a comprehensive Smart Grid deployment of one million electric meters by a typical utility.

The study notes that with the use of Smart Grid technologies:

·         System reliability is increased from 99.48% to 99.75%, reducing outage minutes by 16.8 million customer minutes

·         Nearly 300,000 tons of carbon emissions are eliminated annually

·         Over 9,000 direct and indirect job-years are created

·         The internal rate of return for the smart network program is calculated at 13.8% without accounting for the value customers may place on the increased reliability of the electric grid; when factoring in these benefits, internal rate of return exceeds 35%

·         System benefits calculated by the end of a 10-year forecast period are likely to exceed $110 million per year

The 50-page report on the financial model and analysis describes the most important developments that are driving Smart Grid technology and gives an in-depth explanation of the central elements of a Smart Grid program: advanced metering, distribution automation and distributed energy resources.

"This study further underscores that the billions of dollars received by UTC members in the Smart Grid stimulus grant program announced last week by President Obama will spur much-needed new jobs while reducing the environmental impacts of non-renewable energy use," said William Moroney, UTC president and CEO. "But the analysis also provides hard evidence that deploying Smart Grid technology makes good business sense for the nation's electricity providers and will provide real, long-term benefits to the American consumer."

UTC core utility members can download the report free of charge from the UTC Web site (listed below). It also is available to non-members for $2,499.

   UTC Web site

   Business Case resources on SGN