Power firms smarten up the grid

Matt Walker/Ovum
15 Dec 2011

Telecom vendors are always on the hunt for new markets. Electric utilities are an important vertical, but their telecom needs have historically been basic. The prospect of big new investments in smart grid projects raises the prospect of this changing. However, don't expect an overnight gold rush.

While there is no doubt that making electric grids smarter will require big investments, the move is under way in Asia. For instance, one attractive smart-grid application is automating a utility's distribution plan, which helps with fault detection and isolation. Real-time demand management (i.e. flexible pricing) through smart meters is also taking off in some markets. The bandwidth involved is small, though, which limits the telecom vendor opportunity.

But building smart grids will require utilities to rely heavily on vendors for services and systems integration: defining the target network and how to build, operate and maintain it.

For some utilities a smart grid is simply not a priority. Implementing one is a costly, complex process requiring consensus from internal constituents, plus regulators and consumers. Given this, some utilities focus attention elsewhere.

One example is Malaysia's Sarawak Energy. Most utilities are slow growth, especially now that energy conservation is important. But because of new industrial parks, Sarawak Energy expects a roughly fivefold increase in its peak load between 2011 and 2020. Its customer base is also changing drastically: from about 30% industrial in 2010, its load may reach 80-90% industrial by 2020. After this transition, its customer base will prioritize power quality and reliability issues, and a smart grid will come in handy.

China State Power Grid (CSPG) has a number of objectives for its smart-grid investments:

  • Improve grid security and stability
  • Improve asset utilization and management
  • Improve energy efficiency and customer service
  • Optimize energy resource allocation over a wide area

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