Certainly smart grids will bring changes at the customer level that will not only improve the supply quality and access to new services, but also commercial offerings. This might be in the form of home automation that will detect the best price time of the day to use electricity, or perhaps control home micro-generation to give the best commercial returns to the customer (when to use the home-generated power and when to export it back to the grid, for instance). And not just at the customer level. Keeping in mind the large population that lives in rural India, there is also a huge opportunity for the government to radicalise the power distribution network and to improve the supply of electricity in the villages. “The investments in smart grids makes sense for governments that are today subsidising retail power supply, or large commercial and industrial consumers who pay higher cost on account of cross subsidy and such investments translate in direct cost savings,” says Kameswara Rao, Executive Director – Energy, Utilities and Mining, PricewaterhouseCoopers. For instance, the largest and the very first real time power grid project called the Telegestore Project was carried out in the year 2000 in Italy by Enel S.p.A. that today delivers annual savings of 500 million euros at the project cost of 2.1 billion euros.
Further, the advantage with the smart grid technology is that its monitoring system can detect and respond to problems automatically to minimise impact to consumers as the focus is on prevention of issues – moving from a reactive service model to a proactive one. The technology also promotes innovation and usability as it is designed to put consumers in control of their electricity consumption by providing them with greater variety in electricity plans and pricing.
No doubt, the advent of smart grids (which are likely to be the “Internet” of energy consumption, in terms of broadening our electric-power capabilities in ways we have not even thought of yet) may be cost effective, but then changing the old metres apart from provisioning for two way communications, data processing and transaction systems in the 'back office' involves a huge capital expenditure. Further, there are concerns about privacy and security that could hold back its usage. Thus, it is really important to do the cost-benefit analysis, both short and longer term, before going in for smart grids. After all, gadgets shouldn't be doing all the thinking for you!