With growing electricity consumption, the peak electricity demand is expected to increase manifold by 2050. It is believed that owing to their intelligence features, smart grids have the potential to reduce the projected peak demand increases by up to 24% across some of the major regions of the world. This is because sensors in smart grids can detect peak load in advance and divert surplus supply from low demand areas to meet the peak requirements in a particular region. Moreover, with countries having ambitious renewable energy targets, it is important to ensure that a compatible infrastructure is put in place in parallel.
Several geographies across the world have already recognized the need of upgrading to smart grids and have taken initiatives to encourage this transition. The US, for instance, allocated USD 4.5 billion initially towards grid modernization; the investment increased over the years under the American Recovery Reinvestment Act of 2009. In Europe, the European Technology Platform (ETP) SmartGrids was formalized in 2005 to create a vision for the European networks till 2020 and beyond. A recent 2017 report by Joint Research Centre (JRC) included 950 smart grid projects (R&D and demonstration) across Europe; across these, a total of EUR 5 billion has been invested.
Emerging economies are also planning to upgrade existing systems to smart grids. The ambitious renewable energy targets of countries such as China and India are expected to drive the smart grids market in the future. In China, the government announced an investment of USD 96 billion between 2010 and 2020 to accelerate smart grids deployment. Similarly, in India, several pilot stage smart grid projects are underway.
Smart Grids are expected to play a pivotal role in clean energy initiatives. Specifically, smart meters are amongst the most focused infrastructures across several countries. In the US, more than 75 million smart meters had been installed by 2017. In addition, the EU has set a target of replacing at least 80% (~ 245 million) of the conventional electricity meters with smart meters by 2020. In fact, it is reported that Sweden, Finland, Italy and Luxembourg have already reached full deployment. The EU Smart Grids Task Force believes that the planned rollout of smart meters and smart grids has the potential to reduce carbon emissions in the EU by 9%.
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