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Quick Take: We've said periodically we need to talk about smart grid in ways consumers can relate to. The comments on the critical need for smart grid investment made by Global Smart Grid Federation Chairman Guido Bartels is a prime example of how to do that. - By Jesse Berst

Bartels delivered his remarks at the Israel Smart Grid Consortium held last month. His comments were reported by Globes, an Israeli financial newspaper. Israel is embarking on a pilot smart grid program to make power consumption more efficient and plans eventually to deploy 2.5 million smart meters to replace existing meters.

While estimates of the total cost of global smart grid development and deployment vary, the figure of roughly $400 billion to provide significant long-term savings has been quoted. When asked if raising electricity prices to fund that development and deployment was realistic, Bartels commented "It's not an easy decision politically, certainly not in countries that have elections every two to four years. I'm often asked 'Who will pay all these billions, the poor consumer?' I answer 'And who will pay if we don't do the smart grid?' As far as electricity consumers are concerned, the investment in a smart grid pays off handsomely in the long term.

"We estimate that if the current grid is not upgraded, electricity tariffs will be 400% higher by 2050. Introducing a smart grid makes it possible to reduce this rise to just 50%."

Bartels added that the reason for the heavy cost increase without a smart grid is an eventual decline in grid reliability as infrastructure continues to age – and that the integration of renewable energy sources will require "massive investment, because the grid isn't sufficiently flexible."

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Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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