GE introduces plan to develop a local smart-grid-as-a-service

GE Energy (Fairfield, Conn., U.S.A.) recently announced they were working to provide smart-grid-as-a-service to community-owned utility systems that traditionally did not invest in smart grid systems due to steep up-front costs.

According to GE, smart grids have only been cost-effective to larger investor-owned utilities, but GE Energy is working with the city of Norcross, Georgia, U.S.A. and the Electric Cities of Georgia, an organization that provides strategic and technical services to cities that operate a community-owned public power utility, to implement smart grids into local utility systems as a service offering. 

“This model offers these utilities the opportunity to play in a space traditionally advantaged by larger utilities,” says Todd Jackson, product line leader for Solutions as a Service in GE’s Digital Energy business.  “It also offers them advanced capabilities while reducing and/or avoiding upfront capital costs.”

According to Jackson, this smart-grid-as-a-service program, also referred to as GE’s Grid IQ: Solutions as a Service, is being paid for out of the city’s electric fund and will not cause an increase in the city’s tax base.

Beginning in May 2012, $1 will be added to residential utility bills each month to help cover the cost of this new technology, while commercial accounts will be charged $3.35 a month.

GE Energy could not provide the cost of the smart grid or the amount this smart-grid-as-a-service could save users.  But, according to David Leeds senior manager of Smart Grid Research at GTM Research (Boston, Mass., U.S.A.), it all comes down to the software.

“Getting access to software is going to be paramount over the next 10 or 20 years and this is a smart play by GE to say hey, we can offer this in ways that are more affordable to the smaller players,” says Leeds.  A software model is 80% margins and you buy it, install it, it’s your proprietary software so you tweak it to your particular security needs.  So I’m guessing that the software-as-a-service is a more universal solution that maybe doesn’t do 100% of what you need done, but maybe two-thirds are covered.”

For smaller utilities, the upfront, initial expense is the risk associated with investing in smart grids.

“[This] offering was created to address the risk involved with making the substantial technology investment required to upgrade utility systems and also to address the initial capital expense. The Solutions as a Service offering mitigates the risk associated with technology obsolescence, implementation of systems and the ongoing involvement in maintaining the systems,” says Jackson.

GE will deploy 4,300 smart meters for the City of Norcross, which will cover about 150,000 customers.  The city of Norcross spans 4.5 square miles.

According to GE, some of the benefits of this service include access to more energy information, faster response to power outages, pre-payment options, online portal access to energy use information and automated meter readings.

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