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Enabling Technologies for the Smart Grid

  • Publication Date:March 2011
  • Publisher:BCC Research
  • Product Type: Report
  • Pages:175

Enabling Technologies for the Smart Grid

REPORT HIGHLIGHTS

  • BCC estimates that the U.S. market for smart grid technologies was worth about $23.6 billion in 2010. The market is projected to increase to nearly $23.7 billion in 2011 and $33.1 billion by 2016, a compound annual growth rate (CAGR) of 6.9% over the next 5 years.
  • Distributed energy generation and storage, particularly grid-connected wind and solar power facilities, account for the largest share of the market for smart grid technologies. This sector is estimated to be worth $18 billion in 2011, increasing at a 9.2% compound annual growth rate (CAGR) to reach $29 million in 2016.
  • Transmission lines represent the smallest market share but will experience the most dramatic growth over the forecast period. This sector is estimated at nearly$17 million in 2011 and is expected to increase at an 87.2% compound annual growth rate (CAGR) to reach $389 million in 2016.

REPORT SCOPE

INTRODUCTION

STUDY BACKGROUND

The century-old U.S. electrical grid has been called the largest interconnected machine on earth. It consists of more than 9,200 electric-generating units with more than 1,000,000 MW of generating capacity, connected to more than 300,000 miles of transmission lines. Several years ago, the U.S. National Academy of Engineering voted the national electrification made possible by this grid as the "most significant engineering achievement of the 20th century."

However, the grid is showing its age. There have been massive blackouts in recent years, including the 2003 Northeast blackout, the worst in the nation's history. Although it was accidental, the 2003 blackout was a reminder of the grid's vulnerability to terrorist attack. And this blackout was foreshadowed by a troubling trend: According to the Department of Energy, 41% more outages affected 50,000 or more consumers in the second half of the 1990s than in the first half of the decade. The "average" outage affected 15% more consumers from 1996 to 2000 than from 1991 to 1995 (409,854 versus 355,204).

Regular power outages and blackouts cost the U.S. economy an estimated $80 billion annually, according to a 2005 Lawrence Berkeley National Laboratory study. The figure reflects only direct losses to the economy, and does not take into account the inconvenience and frustration experienced by users during a power outage.

In addition to growing concerns about the U.S. electric grid's robustness and reliability, the grid was designed and built with one basic objective in mind - keeping the lights on. Meanwhile, other concerns have become increasingly important in the political and public dialogue about the status and future of the electrical grid, particularly:

  • Energy efficiency
  • Environmental impacts
  • Consumer choice.

Governments and utilities in the U.S. and elsewhere are investing in new technologies in order to build a 21st-century grid that:

  • Runs more efficiently
  • Generates higher-quality power
  • Resists attack
  • Is self-healing
  • Enables consumers to manage their energy use better and reduce costs
  • Integrates decentralized generation (e.g., renewable energy) and storage (such as fuel cell) technologies.

In addition to meeting the need for reliable, high-quality power, these technologies are intended to meet the economy's energy needs as efficiently as possible, optimizing energy consumption and related environmental impacts such as greenhouse gas emissions.

These technologies are often referred to generically as smart grid technologies. Smart grid describes a set of related technologies, rather than specific technology with a generally agreed-on specification. These technologies fall into five main areas:

  • Two-way integrated communications: allow for real-time control, information and data exchange to optimize system reliability, asset utilization, and security
  • Sensing and measurement: evaluate congestion and grid stability, congestion and grid stability, monitor equipment health, detect energy theft, and support control strategies support
  • Advanced components: flexible alternating current transmission system devices, high-voltage direct current, first- and second-generation superconducting wire, high-temperature superconducting cable, distributed energy generation and storage devices, composite conductors, and "intelligent" appliances
  • Advanced control that enables rapid diagnosis of and precise solutions to specific grid disruptions or outages
  • Improved interfaces and decision support that reduce complexity so that operators and managers have tools to effectively and efficiently operate a grid with increasing numbers of variables.

GOALS AND OBJECTIVES

This report is an update of an earlier BCC report that was published in early 2009. Since then, there have been many important developments that have the potential to affect the development of the smart grid. These developments include the passage of the American Recovery and Reinvestment Act (stimulus bill) of 2009, which earmarked $4.5 billion for investments in smart grid technology; the growing interest of large private sector players such as Google, IBM, GE, and Cisco; and a significant increase in the amount of venture capital flowing into smart grid-related investments.

On the negative side, the 2008 and 2009 recession and the subsequent slow recovery have dampened the growth of the smart grid, for example, by making it harder for utilities and suppliers to obtain credit, making the weighted average cost of capital higher, and impacting the discounting of costs and benefits in the business case. Regulators in some states (e.g., Maryland and Hawaii) have rejected utilities' smart grid proposals, arguing that consumers were expected to bear too much of the cost and risk and that potential returns do not justify the cost.

In view of these developments, BCC believes that an update of the earlier report is timely. The overall goal of updating this report is to reassess the business opportunities for providers of smart grid technologies that will arise over the next 5 years as products utilizing these technologies increase their market penetration. In support of this goal, specific objectives of the report include:

  • Identifying the smart grid technologies with the greatest commercial potential over the next 5 years (2011 to 2016)
  • Estimating the market for these technologies in 2010
  • Analyzing the technical, economic, and other demand drivers for these products, and other prerequisites of success in these markets
  • Projecting the potential U.S. markets for these technologies through 2016
  • Analyzing macro-level political and economic forces that are helping to shape the market for smart grid technologies.

INTENDED AUDIENCE

The report is intended especially for providers of smart grid technologies and products based on these technologies. Although the report is structured around specific technologies, it is largely nontechnical in nature. That is, it is concerned less with theory and jargon than with what works, how much of the latter the market is likely to purchase, and at what price.

As such, the report's main audience is executive management, marketing, and financial analysts. It is not written specifically for scientists and technologists, although its findings concerning the market for their work, including the availability of government and corporate research funding for different technologies and applications should interest them as well.

Others who should find the report informative include government agencies, environmental, and public policy interest groups with an interest in energy, the environment, and sustainable development in general.

SCOPE OF REPORT

The study covers the major enabling technologies for the smart grid, including:

  • Communications technologies
  • Sensing and measurement technologies
  • Advanced components
  • Control technologies
  • Interface and decision support technologies.

The study format includes the following major elements:

  • Executive summary
  • Definitions
  • Benefits of smart grids
  • Smart grid "roadmap"
  • Policy, regulatory, and economic environment for the transition to a smart grid
  • Enabling technologies for the smart grid
  • Developers and suppliers of smart grid-enabling technologies
  • Current (2010) and projected market for smart grid technologies through 2016
  • Patent analysis.

METHODOLOGY

The report is based on the results of targeted interviews with producers and users of smart grid technologies, complemented by a thorough literature review and BCC's internal databases. The base year for analysis and projection is 2009 or 2010, in cases where data for all of 2010 were not available at the time the report was written.

With 2009 or 2010 as a baseline, market projections were developed through 2016. These projections are based on a combination of a consensus among the primary contacts combined with BCC's understanding of the key market drivers and their impact from an historical and analytical perspective.

The methodologies and assumptions used to develop the market estimates and projections are described in detail in the chapters on smart grid markets. That way, readers can see how the market estimates were developed and, if they so desire, test the impact on the final numbers of changing assumptions such as price.

AUTHOR'S CREDENTIALS

Andrew McWilliams, the author of this report, is a partner in the Boston-based international technology and marketing consulting firm, 43rd Parallel, LLC. He is the author of the previous edition of this report, as well as several other reports that analyze selected smart grid technologies, such as Energy Management Information Systems: Global Markets (EGY052B); The U.S. Market for Clean Technologies (ENV011A); Superconductors: Technologies and Global Markets (AVM066B); Metamaterials: Technologies and Global Markets (AVM067A); and Advanced Materials and Devices for Renewable Energy (EGY053B). Mr. McWilliams is also the author of several other energy-related BCC reports, including Petroleum Fuel Optimization Technologies (EGY051A); Building the Global Hydrogen Economy: Technologies and Opportunities (EGY055B); and Nanotechnology in Energy Applications (NAN044A).

  • CHAPTER ONE: INTRODUCTION
    • STUDY BACKGROUND
    • GOALS AND OBJECTIVES
    • INTENDED AUDIENCE
    • SCOPE OF REPORT
    • METHODOLOGY
    • AUTHOR'S CREDENTIALS
    • RELATED BCC RESEARCH
    • BCC ONLINE SERVICES
    • DISCLAIMER
  • CHAPTER TWO: EXECUTIVE SUMMARY
    • SUMMARY TABLE U.S. MARKET FOR SMART GRID TECHNOLOGIES, THROUGH 2016 ($ MILLIONS)
    • SUMMARY FIGURE U.S. MARKET FOR SMART GRID TECHNOLOGIES, 2010-2016 ($ MILLIONS)
  • CHAPTER THREE: OVERVIEW OF "SMART GRIDS"
    • DEFINITIONS
    • BENEFITS OF SMART GRIDS
    • DIRECT BENEFITS
    • Benefits to Utilities
    • Lower Capital Costs
    • Reduced Operating Costs
    • Benefits to Users
    • Improved Quality and Reliability
    • Lower Costs
    • Greater Consumer Choice
    • INDIRECT BENEFITS
    • Reduced Consumption of Fossil Fuels
    • Improved Balance of Payments Position
    • Enhanced National Security
    • Job Creation
    • Economic Development
    • Environmental Benefits
    • THE PATH TO A SMART GRID
    • GRID 2030
    • National Electricity "Backbone"
    • Regional Interconnections
    • Local Distribution, Mini- and Micro-Grids
    • NATIONAL ELECTRIC DELIVERY TECHNOLOGIES ROADMAP
    • National Electric Delivery ...(Continued)
    • EARLY ADOPTERS
    • Southern California Edison Company
    • Southern California ... (Continued)
    • Pacific Northwest Smart Grid Demonstration Project
    • TXU Energy Broadband over Power Line Smart Grid
    • Xcel Energy Smart Grid City
    • Austin Energy Smart Grid Program
    • Other Projects
    • ENABLING TECHNOLOGIES FOR THE SMART GRID
    • COMMUNICATIONS TECHNOLOGIES
    • SENSING AND MEASUREMENT TECHNOLOGIES
    • ADVANCED COMPONENTS
    • CONTROL TECHNOLOGIES
    • INTERFACE AND DECISION-SUPPORT TECHNOLOGIES
    • MARKET SUMMARY
  • CHAPTER FOUR: MARKET ENVIRONMENT FOR SMART GRID-ENABLING TECHNOLOGIES
    • LEGAL AND REGULATORY ENVIRONMENT
    • BARRIERS TO SMART GRID DEPLOYMENT
    • Federal-State Coordination
    • Cost Recovery
    • Cost Recovery (Continued)
    • Other Incentives to Increase Grid Efficiency
    • Least Cost Planning
    • Environmental, Public Health and Safety Impacts
    • Lack of Standards
    • LEGISLATION AND REGULATION
    • Federal Initiatives
    • Energy Policy Act of 2005
    • Energy Independence and Security Act of 2007
    • Section 1301. Statement of Policy on Modernization of Electricity Grid
    • Section 1302. Smart Grid System Report
    • Section 1303. Smart Grid Advisory Committee and Smart Grid Task Force
    • Section 1304. Smart Grid Technology Research, Development, and Demonstration
    • Section 1305. Smart Grid Interoperability Framework
    • Section 1306. Federal Matching Funds for Smart Grid Investment Costs
    • Section 1307. State Consideration of Smart Grid
    • Section 1308. Study of the Effect of Private Wire Laws on the Development of Combined Heat and Power Facilities
    • Section 1309. DOE Study of Security Attributes of Smart Grid Systems
    • Emergency Economic Stabilization Act of 2008
    • American Recovery and Reinvestment Act of 2009
    • Federal Regulation
    • Rulings Expanding Use of Demand Response
    • Assessment of Demand Response and Advanced Metering
    • Interim Rate Policy
    • Smart Grid Standards
    • State Legislation and Regulation
    • Arizona
    • Regulation on Time-Based Rates
    • California
    • California Senate Bill 17
    • California Senate Bill 1491
    • Colorado
    • House Bill 07-1037
    • Illinois
    • Senate Bill 1592
    • Maryland
    • EmPower Maryland Energy Efficiency Act
    • Massachusetts
    • Green Communities Act
    • Michigan
    • Legislative Activities
    • Smart Grid Collaborative
    • Advanced Metering Infrastructure Standards
    • New Jersey
    • New Jersey Demand Response Working Group
    • Oregon
    • Approval of Smart Meters
    • Pennsylvania
    • Act 129
    • Texas
    • SB 3693
    • Rules for Smart Metering
    • Public Utility Commission Report on Advanced Metering
    • Vermont
    • Energy Efficiency and Affordability Act of 2008
    • Collaborative Smart Grid Pilot Program
    • FINANCIAL AND ECONOMIC ENVIRONMENT
    • FINANCING THE SMART GRID
    • Government-Funded Programs
    • Government-Funded R&D
    • Federal R&D
    • State-Financed R&D
    • Smart Grid Pilot and Demonstration Projects
    • Matching Grants for Smart Grid Investments
    • Capital Investments
    • American Reinvestment and Recovery Plan of 2009
    • UTILITIES
    • R&D
    • R&D (Continued)
  • CHAPTER FIVE: INTEGRATED COMMUNICATIONS FOR SMART GRIDS: TECHNOLOGIES AND MARKETS
    • SUMMARY
    • HOME AREA NETWORKS
    • TECHNOLOGIES
    • ZigBee
    • Wi-Fi
    • Z-Wave
    • In-Home Power Line Communications
    • COMMERCIAL STATUS AND OBSTACLES TO DEPLOYMENT
    • PRODUCERS AND DEVELOPERS
    • MARKETS
    • NEIGHBORHOOD AREA NETWORKS
    • TECHNOLOGIES
    • Broadband over Power Line
    • Meshed Wi-Fi
    • ZigBee
    • WiMAX
    • Licensed Spectrum
    • COMMERCIAL STATUS AND OBSTACLES TO DEPLOYMENT
    • Commercial Status and Obstacles ... (Continued)
    • PROVIDERS
    • MARKET
    • BACKBONE COMMUNICATIONS
    • TECHNOLOGIES
    • MARKETS
  • CHAPTER SIX: SENSING AND MEASUREMENT FOR SMART GRIDS: TECHNOLOGIES AND MARKETS
    • SUMMARY
    • SMART METERING
    • TECHNOLOGIES
    • COMMERCIAL STATUS AND BARRIERS TO DEPLOYMENT
    • PRODUCERS
    • MARKET
    • WIDE-AREA MEASUREMENT SYSTEMS
    • TECHNOLOGY
    • COMMERCIAL STATUS AND BARRIERS TO DEPLOYMENT
    • PROVIDERS
    • MARKETS
    • DYNAMIC LINE-RATING SENSORS
    • TECHNOLOGY
    • Online Methods
    • Offline Methods
    • COMMERCIAL STATUS AND BARRIERS TO DEPLOYMENT
    • PROVIDERS
    • MARKET
    • INSULATOR LEAKAGE SENSORS
    • TECHNOLOGIES
    • COMMERCIAL STATUS AND BARRIERS TO DEPLOYMENT
    • PROVIDERS
    • MARKET
    • OTHER MONITORING SYSTEMS
    • TECHNOLOGIES
    • COMMERCIAL STATUS AND OBSTACLES TO DEPLOYMENT
    • PROVIDERS
    • MARKETS
  • CHAPTER SEVEN: ADVANCED COMPONENTS FOR SMART GRIDS: TECHNOLOGIES AND MARKETS
    • SUMMARY
    • POWER ELECTRONICS
    • TECHNOLOGIES
    • COMMERCIAL STATUS AND OBSTACLES TO DEPLOYMENT
    • PROVIDERS
    • MARKETS
    • FAULT CURRENT LIMITERS
    • TECHNOLOGY
    • Resistive FCLs
    • Inductive FCLs
    • COMMERCIAL STATUS AND OBSTACLES TO DEPLOYMENT
    • PROVIDERS
    • MARKET
    • HIGH-CAPACITY TRANSMISSION CABLE
    • TECHNOLOGIES
    • Superconducting Cable
    • Superconducting Cable (Continued)
    • High-Capacity Overhead Conductor Cable
    • Aluminum-Conductor Composite Core Cable
    • Aluminum-Conductor Composite Reinforced Cable
    • Annealed Aluminum, Steel-Supported Trapezoidal Cross-Section Conductor Wire
    • COMMERCIAL STATUS AND BARRIERS TO DEPLOYMENT
    • PROVIDERS
    • MARKET
    • Superconducting Cable
    • High-Capacity Overhead Conductor Cable
    • Aluminum-Conductor Composite Core Cable
    • Aluminum-Conductor Composite Reinforced Cable
    • Annealed Aluminum, Steel-Supported Trapezoidal Cross-Section Conductor Wire
    • DISTRIBUTED ENERGY RESOURCES
    • DISTRIBUTED GENERATION DEVICES
    • Technologies
    • Photovoltaics
    • Wind Turbine
    • Microturbines
    • Fuel Cells
    • Providers
    • Markets
    • Photovoltaics
    • Wind Turbines
    • Fuel Cells
    • Microturbines
    • DISTRIBUTED STORAGE SYSTEMS
    • Technologies
    • Sodium-Sulfur Batteries
    • Vanadium Redox Batteries
    • Supercapacitors
    • Superconducting Power Storage
    • Superconducting Magnetic Energy Storage
    • Superconducting Flywheel Energy Storage
    • Compressed-Air Energy Storage
    • Plug-In Hybrid and All-Electric Vehicles
    • Plug-In Hybrid and ... (Continued)
    • Providers
    • Markets
    • NaS Batteries
    • Vanadium Redox Batteries
    • Superconducting Magnetic and Flywheel Storage
    • Supercapacitors
    • Compressed-Air Storage
    • Plug-In Hybrid and All-Electric Vehicle Storage
  • CHAPTER EIGHT: ADVANCED CONTROLS FOR SMART GRIDS: TECHNOLOGIES AND MARKETS
    • SUMMARY
    • DISTRIBUTED INTELLIGENT AGENTS
    • TECHNOLOGIES
    • Digital Protective Relays
    • Intelligent Tap Changers
    • Dynamic Circuit-Rating Tools
    • Distributed Energy Management Systems
    • Grid-Friendly Appliance Controllers
    • Dynamic Distributed Power Flow Controllers
    • PRODUCERS AND DEVELOPERS
    • MARKET
    • Digital Protective Relays
    • Intelligent Tap Changers
    • Distributed Energy Management Systems
    • Grid-Friendly Appliance Controllers
    • Distributed Power-Flow Controllers
    • HIGH-PERFORMANCE COMPUTING
    • TECHNOLOGIES
    • Technologies (Continued)
    • MARKETS
    • CENTRALIZED CONTROL APPLICATIONS
    • TECHNOLOGIES
    • PROVIDERS
    • MARKETS
    • INTERFACES AND DECISION-SUPPORT SYSTEMS
    • TECHNOLOGIES
    • PRODUCERS AND DEVELOPERS
    • MARKET
    • Appendices
    • APPENDIX A: COMPANY PROFILES
    • INTEGRATED COMMUNICATIONS
    • ALVARION, INC.
    • AMBIENT CORP
    • AMPERION, INC
    • ARCADIAN NETWORKS, INC
    • ARKADOS, INC
    • CURRENT GROUP, LLC
    • EMBER CORP.
    • GAINSPAN CORP
    • GRIDNET, INC.
    • INTELLON CORP.
    • INTERNATIONAL BROADBAND ELECTRIC COMMUNICATIONS, INC.
    • MAIN.NET POWER LINE COMMUNICATIONS, INC.
    • MMB RESEARCH, INC
    • RUGGEDCOM INC.
    • SMARTSYNCH
    • TELKONET, INC
    • ZENSYS INC.
    • SMART GRID SENSING AND MEASUREMENT TECHNOLOGIES
    • SMART METERS
    • Echelon Corp.
    • Elster LLC
    • eMeter Corp
    • EnergyICT Inc
    • Itron, Inc.
    • Landis+Gyr AG
    • Sensus Metering Systems
    • Trilliant Networks
    • WIRE AREA MEASUREMENT SYSTEMS
    • Doubletree Systems, Inc.
    • Macrodyne, Inc.
    • PowerWorld Corp
    • DYNAMIC LINE RATING
    • Electrotech, Inc.
    • Shaw Energy Delivery Services, Inc
    • The Valley Group, Inc
    • USi Power
    • INSULATOR CURRENT LEAKAGE SENSORS
    • PSP Technologies, Inc
    • Telepathx
    • OTHER SENSORS
    • FISO
    • Intelligent Controls, Inc.
    • ADVANCED COMPONENTS
    • POWER ELECTRONICS
    • Satcon Technology Corporation
    • Xantrex Technology Inc
    • FAULT CURRENT LIMITERS
    • Nexans
    • SuperPower Inc.
    • Zenergy Power plc
    • TRANSMISSION CABLE
    • American Superconductor Corp.
    • Composite Technology Corp.
    • Comverge, Inc.
    • EnerNOC, Inc.
    • Hyper Tech Research, Inc
    • Metal Oxide Technologies Inc
    • 3M Company
    • Southwire Co.
    • DISTRIBUTED GENERATION
    • MICROTURBINES
    • Capstone Turbine Corp
    • PHOTOVOLTAICS
    • BP Solar International Inc.
    • First Solar Inc.
    • HelioVolt Corp
    • Konarka Technologies, Inc.
    • FUEL CELLS
    • Fuel Cell Energy, Inc
    • Materials and Systems Research, Inc
    • DISTRIBUTED STORAGE
    • Accel Instruments GmbH
    • Maxwell Technologies, Inc.
    • NGK Insulators, Ltd.
    • VRB Power Systems Inc.
    • SMART GRID CONTROLS
    • DISTRIBUTED INTELLIGENT AGENTS
    • BPL GLOBAL, LTD
    • GridPoint, Inc.
    • CENTRALIZED CONTROL APPLICATIONS
    • Intergraph Corp
    • Milsoft Utility Solutions
    • Silver Spring Networks
    • INTERFACE AND DECISION SUPPORT
    • Space-Time Insight
    • APPENDIX B: PATENT ANALYSIS
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