Environmental Leader

The Association of Home Appliance Manufacturers (AHAM) has laid out guidelines for establishing a smart grid in a newly released white paper at the Copenhagen Climate Conference. The U.S.-based trade group said smart-grid-enabled home appliances, through a fully functional smart grid, will significantly reduce greenhouse gas (GHG) emissions, and provide better integration and coordination of renewable energy resources.

The white paper, “The Home Appliance Industry’s Principles & Requirements for Achieving a Widely Accepted Smart Grid“, advises that consumer choice, control and security must be  priorities in the development of a smart grid.

The white paper outlines three key requirements for a widely accepted smart grid. These include a uniform pricing rate and usage structure and incentives to consumers, open communications standards and protocols with smart appliances, and consumer choice and privacy.

One solution for controlling emissions is implementing smart grids, said Brendan Herron, vice president of corporate development and strategy at CURRENT Group, LLC in a bylined article for TMCnet. Herron said in the article that early deployments show that a smart-grid enabled electric distribution network can reduce electric power requirements by 3 to 5 percent and related carbon without impacting customer service.

The Climate Group concluded in its SMART 2020 report that smart grids deployed worldwide could reduce 2.03 gigatons of carbon dioxide equivalent (GtCO2e) annually by 2020, said Herron.

The Climate Group found that a smart grid was the most productive information technology investment that could be made to reduce global warming, more than smart buildings, improved motor efficiency or improved logistics, said Herron.

The report estimated that over 85 percent of those savings came from efficiency improvements of the electrical grid itself (0.9 GtCO2e) and from the integration of renewables (0.83 GtCO2e), said Herron. Only 15 percent (0.3 GtCO2e) of the estimated savings was derived from smart-meter related reductions such as demand response and changes in customer behavior, he added.

Herron is also calling for more incentives for utilities. He said unless incentives created by traditional rate base regulation are changed, there is no reason for a for-profit company to spend money in order to earn less.

Yet, the smart-meter market is growing at a fast pace. As an example, the European smart meter markets are projected to reach $11 billion by 2015, according to a new report from Frost & Sullivan. The study covers automated meter infrastructure (AMI), IT systems and communication technologies.

The report, “European Smart Meter Markets“, indicates that the European smart meter markets have made significant progress over the past few years compared to the rest of the world, and are moving towards total grid automation. However, challenges such as interoperability and data security are restraining the markets’ growth, together with the lack of clarity regarding their business case, which has resulted in delays in investments and large-scale deployments by utilities, according to the report.

Frost & Sullivan said smart meter manufacturers need to move from a product to a services-based model and to customize their entire AMI solution for consumers in order to grow market share.

Research and consulting firm Zpryme advises U.S. hardware and software companies to capitalize on the $3.4 billion in smart-grid grants recently announced by the U.S. Department of Energy. The research and consulting firm said there are opportunities to the tune of $152.3 billion or 89 percent of the global smart grid market in 2014 for devices, hardware, software and communications equipment.

IBM, a big proponent of smart-grid technology, is moving forward with another smart-grid pilot program. IBM has selected Australian energy provider Western Power as the systems integration and project management partner for its SmartGrid-Advanced Meter Infrastructure pilot program.

IBM recently unveiled a new standards-based industry software platform and business partner validation program that will enable utility companies to operate more efficiently and accelerate the development of their smart utility solutions.