The market for smart grid technologies that help to integrate renewable energy sources is to generate just under $13 billion in 2018, up from only $3.8 billion in 2012, according to a new study from Pike Research.
Utilities and grid operators are investing millions of dollars in lowering the costs of integrating renewables generation, but these efforts have so far had mixed fortunes.
According to Pike Research, however, technologies that include microgrids, dynamic pricing systems, advanced energy storage and virtual power plants (VPPs) are set to flourish as traditional electricity grids become obsolete.
“For all the talk of the challenges of bringing increasing amounts of distributed, renewable energy sources onto the power grid, in reality there is no consensus on the exact effects of renewables integration on grid operations,” said senior research analyst Peter Asmus. “What we do know is that the fundamental architecture of today’s electricity grid – based on the idea of a top-down system predicated on unidirectional energy flows – is becoming obsolete, and is unsuited for the increasing diversity and variability of power generation. Microgrids, VPPs, and other smart grid technologies represent the vanguard of a new business model that echoes, in many ways, the diversity and modularity of our rich telecommunications networks.”
Some of these technologies will take off more quickly than others, however. Utilities and grid operators have been offering some forms of demand response, for example, for many decades, while the business case for advanced energy storage is not yet clear.
The report authors also point out that while substantial investments have flowed into renewables integration at the transmission-level of power service, most of these technologies, such as high-voltage direct current lines, do not qualify as “smart grid”.
Today, distribution-level smart-grid technologies, such as microgrids, clearly lead this market.