Are Smart Grids Profitable? Yes.

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Conventional grids require expensive upkeep and increase the likelihood of electrical blackouts. However, smart grid implementation also comes with a significant cost. Is it worthwhile? Can smart grids pay for themselves?

Smart Grid tools provide reliable, safe, and efficient power to the grid. And, according to GTM’s report, Global Smart Grid Technologies and Growth Markets 2013-2020, GTM Research predicts the smart grid market will cumulatively surpass $400 billion worldwide by 2020, with an average compound annual growth rate of over eight percent. Smart grid enabling technologies are obviously doing more than a few things right.

Smart Utilities ebook

Inevitably though, the expense of these tools will lead to tough return on investment conversations with leadership. Bottom line, are smart grids profitable? You can be sure that question is on the mind of nearly every energy utility executive at one point or another and fortunately, the answer is a resounding yes.

Excerpted from our new book, Powering an Always-On World, there are nine ways utilities are realizing the cost benefits of smart grids today:

  1. Reduced peaks, which in turn reduce peak capacity
  2. CapEx deferral
  3. Reduced outage times and outage frequency
  4. Reduced fuel usage
  5. Fewer personnel and higher job satisfaction
  6. Better customer loyalty and less churn
  7. More revenue from new services
  8. More security
  9. Less pollution

Although investments in new smart grid technologies may increase short-term capital costs, long-term advantages far outweigh the upfront investment. Lower operating costs, reduced energy waste, and a more integrated and flexible network are all within reach.

For more details about smart grid development and the future of the utility industry, download Powering an Always-On World.

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