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Home / Press Releases / Microprocessing / Defining Smart Grids and Smart Opportunities
Press Releases
Defining Smart Grids and Smart Opportunities
Date: 28 February 2012
In the generation, transmission and distribution (GT&D) of electricity, ‘Smart Grid’ has been used to describe the growing intelligence in the electric grid. Historically, smart grid first referred to the increasing use of a communications network to reduce an electricity provider’s dependence on labor to read billing meters; the smart meter required a smart grid to manage the intelligent communications. Some industry players and media still adhere to this increasingly limited definition. IMS Research defines a smart grid as “a utility supply infrastructure with the inherent ability to match and manage generation and consumption efficiently, while obtaining maximum benefits from the available resources.” By this definition, the smart grid has grown well beyond its original smart metering origins to include a complex integration of electricity providers, distributers, and ultimately the consumers. It integrates communications, measurement and control.
As the maxim states, “If you can’t measure it you can’t manage it.” In most mature markets, smart meters have become the norm. Here, electricity providers are increasingly investing in advanced communications and electric power measurement for systemic automation to reduce operating expenses. The high cost of purchasing electricity on the open market, balancing loads, adhering to government regulations and policies and the uncertainties surrounding climate change have electricity providers scrambling for better ways to manage the grid. This translates not only to more meters and data aggregators, but also to electric power measurement semiconductors and metering equipment. One such example is voltage conservation. Electricity providers aggregate data from smart meters and integrated grid metering to incrementally measure capacity and demand. The data supplied from metering and integrated electric power measurement is then used to automate switching and capacitor systems. This automated system provides just enough voltage for the minimum required operating conditions. This technique and others like it will allow electricity providers to better balance loads, reduce stress on equipment, and distribute power where it is most needed with less costly equipment and equipment maintenance. In a recent study, Electric Power Measurement Semiconductors in Smart Grid, Smart Metering and Smart Home, IMS Research predicts shipment growth from 2010 to 2015 in electronic TG&D equipment at less than 4% continual average growth rate (CAGR), but the growth of embedded electric power measurement in these devices is predicted to be four times that at almost 15% CAGR.
To reduce peak demand and avoid the costly expense of buying more electricity on the open market, more than efficient distribution is needed. A third strategic phase is currently emerging. As new applications such as electric vehicle charging and new variables such as unpredictable climate conditions make managing peaks more difficult, accumulating data from consumption sources is critical to grid management. This is driving utilities to enlist partnership with consumers in managing energy consumption. Thus far, these strategies vary widely. It ranges from gathering data on usage habits, to detailed billing meter time-of-day usage, to using variable tariffs and contracts for limited utility monitoring and control of consumer equipment. The consumer benefits of smart devices in terms of maintenance and home automation can be compelling. However, consumers are concerned with privacy, security, the potential for abuse and a higher price tag at the time of purchase. Device manufacturers are eager but cautious for consumers to consider smart appliances and other home metering equipment. For commercial and industrial consumers, companies are just starting to install submeters and are paying for energy audits to reduce the total cost of ownership associated with inefficient electricity consumption. As the benefits in total cost of ownership for home energy management becomes more discernible, the markets for meters and integrated electric power measurement semiconductor are predicted to grow rapidly.
Despite apathy and valid concerns of privacy and control, the extension of the smart grid into consumers’ factories, businesses and homes is predicted to increase. Meters and integrated energy measurement components will continue to grow in preparation of strategies for a third phase of a sophisticated smart grid. The IMS Research study predicts annual shipment growth from 2010 to 2015 for electricity meters and embedded electric power measurement in commercial and industrial applications near 14% CAGR. The residential side is currently very small but has a large total available market. Here the study predicts that shipment growth from 2010 to 2015 for electricity meters and embedded electric power measurement in residential applications at almost 43% CAGR.
According to the author, Semiconductors Research Manager Tom Hackenberg, “While great political emphasis has been placed on energy conservation through renewable resources, the greatest energy conservation in the next few decades is likely to be realized through a sophisticated smart grid that systemically integrates generation, distribution and consumption. This network will increasingly include devices capable of measuring electricity and contributing to energy conservation by automation or remote control.” In a period of economic skepticism, this market is an excellent opportunity for vendors of metering devices, electric power measurement and connectivity semiconductors, software and IP. But to fully take advantage of the smart grid opportunities and avoid the hype, players in this industry may have to re-evaluate what the smart grid is and how it is evolving. For a more complete view of opportunities in this evolving market, get the Electric Power Measurement Semiconductors in Smart Grid, Smart Metering and Smart Home World 2011 Edition.
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