Top 10 Smart Grid and Smart City predictions

How much can change in the six years leading to 2020?  Think about how much changed from 2007 to 2013.  In that six year timeframe, the costs of solar panels dropped from $3.40/watt to 80 cents/watt, and PV deployments in the USA increased from 735 MW to 7200 MW.

Over 37 million smart meters were installed in the USA alone.  Cybersecurity went from an afterthought to a significant concern for utilities as cyberattacks climbed.  Water utilities alone have experienced a 60 percent increase in attacks in this timeframe.  The term “prius effect” defined how awareness of driving style influences energy consumption.  That insight launched scores of companies that wanted to do the same for home energy consumption.

Home energy management systems became mainstream offerings from national telecommunications providers instead of customized integrations from niche solution providers.  Much can happen in six years time.   Here are ten predictions about Smart Grid and Smart Cities activity occurring by 2020.

  1. California hits and exceeds its RPS objective of 33 percent renewable sources of electricity by 2020 – the most ambitious of all states with this calendar deadline.  Other states also meet their RPS objectives.  Here’s the twist – a significant portion of solar deployment is attached to the distribution grid, not the transmission grid.  The surge in privately-owned deployments occurs as innovative business services reduce expensive friction in planning, financing, and sourcing solar installations.  These distributed generation (DG) deployments obviate the need for expensive transmission grid investments and focus utility money on the historically underinvested low voltage grid.  The Smart Grid’s bi-directional flow of electricity takes a big leap forward.
  2. Grid resiliency strategies take priority for investor-owned, municipal, and rural utilities.  Grid resiliency combines Smart Grid and grid hardening initiatives – because a hardened grid characterized by centralized generation, long distance transmission and dumb distribution is still a brittle grid.  Hardware and software investments have to prove their value in situational awareness by reducing service outages and/or accelerating service recoveries from natural and human-caused disasters.  Governmental, commercial and residential interests build microgrids that are capable of delivering a limited degree of building self-sufficiency in energy.  “Graceful degradation” becomes the new buzzword phrase.
  3. As utilities consider grid hardening, cities redefine what being a smart city really means.  Smart cities aren’t smart if their critical infrastructure relies on fragile transmission or distribution grids.  Resiliency planning looms large for smaller municipalities and regional governmental agencies. Utility line workers and pipeline workers are recognized as first responders and utilities play larger roles in local and regional disaster response/recovery planning exercises – whether the disaster is catastrophic weather or the grid is the target of a cyber attack. Critical infrastructure like police, fire, and medical facilities as well as centers for refuge are retrofitted whenever possible with microgrid solutions for energy security.
  4. Consumer intermediation threats abound for utilities.  Some investor-owned utilities, pummeled by Wall Street, will belatedly discover the value of “owning” a relationship and retaining and growing lifetime consumer value as alternative service providers intermediate their formerly captive customers.  The localization of energy goes mainstream.  Small-scale generation of kilowatts and negawatts is commonly available with a number of suppliers and service providers offering commercial and then residential consumers options that intermediate the traditional utility/consumer relationships.  Consumers will be lured by business models that offer unique financial justifications, ease of doing business, and even fun in the form of gamification of programs that encourage consumer interactions.
  5. Standards that define how to integrate or grid-tie microgrids and other standalone generation and energy storage assets for bi-directional electricity flows to utility distribution grids are globally adopted.  In the USA, momentum from the commercial business sector, which fuel building as microgrid and building self-sufficiency concepts into projects, motivates utilities and regulatory agencies into proactive stances on standards development initiatives – particularly around cybersecurity and interoperability of privately-owned microgrid management systems and standalone generation and energy storage assets with utility distribution management systems.
  6. Debates about the future of the social compact for electricity services and the socialization of electricity costs continue.  The first forward-thinking regulatory agencies are implementing policies that re-define utility business models and revenues for delivery of “electricity assurance” for commercial business continuity and residential quality of life services.  You can go off the grid, but expect to pay for the utility to be your electricity insurer – the fallback for electricity when your systems fail to deliver.
  7. EVs advance to 10 percent of the US car market.  Although sales have been slow to date, changes in building codes and more charging stations make EVs easier to own and operate.  However, the greatest motivator is money, as more and more vehicle to grid (V2G) service innovations create opportunities for EV owners tomake money with their EVs.  Entrepreneurs focus on creating profitable second uses of EV batteries once they are retired from vehicle use ranging from conversion kits for home energy storage to being bundled into cheap, modular energy storage for critical governmental infrastructure.  EVs buck, rather than continue the depressing history of instant asset depreciation the minute cars are driven off the dealer lot.
  8. Resiliency measures also become part of the definition of a smart building.  There will be significant innovation in solutions that can be deployed in new buildings or retrofitted into existing building stock.  For instance, an elevator company just introduced the first solar-powered elevator system – one that can operate even during grid blackouts.  It includes battery storage so it operates at night too.  Just consider how this one change to building infrastructure can make a big difference for residents of high rises.  Parking lots and garages deploy PV solar.  There’s an estimated 115 square miles of parking in California that could generate almost 1.5 TW of electricity daily.  As solar energy replaces or supplements the electricity coming from distribution grids, utility revenues plummet even more precipitously.
  9. Nanotechnologies help propel solar harvesting efficiencies past the 50% mark, and by 2020 research scientists are aiming for 75 percent harvest efficiencies.  Advances in materials – such as quantum dot solar cells, melded with nanotechnologies – deliver more electricity in reduced spaces.  Advances in manufacturing processes follow previous history, and solar farms replace existing technologies with cost-effective new equipment and produce more power without expanding their footprints.
  10. There’s sufficient electricity production from renewable energy sources that we no longer talk about “renewables.”  We talk about wind, or solar, or geothermal, or hydro, but as distinct energy categories instead of being lumped into one catchall category.  In the US, coal is relegated to the ash heap, and toxic coal ash heaps become the focus of environmental cleanup efforts.

If you’ve been paying attention, you noticed that there’s a significant emphasis on resiliency in my ten predictions.  Our interconnected economies and societies have an irreplaceable reliance on energy and communications infrastructure.  How we proactively plan or reactively scramble will make for an interesting next six years and beyond.


    About The Author

    Managing Director, Smart Grid Library

    Christine Hertzog is the founder and Managing Director of the Smart Grid Library which is focused on the generation, transmission, and distribution of information about Smart Grid, Smart City, and machine to machine (M2M) technologies, services, and solutions. She is a recognized thought leader and regular speaker at international industry conferences and writes a weekly syndicated blog about grid modernization and its impacts on consumers, utilities, regulators, and vendors. Contact Christine at [email protected]

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