The findings released in this study are largely based on the results of an internet survey that was conducted with 460 global Smart Grid executives in October of 2012.
In general, the survey respondents believe these technologies will increase the adoption of the Smart Grid and spur new market opportunities for the software and systems that will integrate them. 69% of the executive respondents believe energy storage technologies and distributed generation are of equal importance to Smart Grid development, and 50% of them report microgrid technologies to be of significant importance, as well. Zpryme expects opinions regarding the latter to tick upwards in the wake of Superstorm Sandy when reflection and reviews of how micro grids could have improved the current affairs of the ravaged states affected by the storm.
Microgrids installed at hospitals, nursing homes, schools and universities, refineries, gas stations and other critical infrastructures could have made a significant difference in the reduction of headaches and emergencies that might have been otherwise avoided.
Respondents were asked to rate the top three benefits and three greatest challenges facing the development of each of the technologies, as well as the enabling technologies that will be required to bring them to fruition. Detailed results of the responses to these questions can be reviewed in detail in Zpryme’s report findings, but in general, improving power reliability and reducing costs were the overriding benefits cited across the board. When asked about what factors are of the most importance to deploying and/or developing the respective technologies, respondents were in full consensus on three critical issues: Industry R&D (84% reported R&D as being “very important” for developing large-scale grid storage; 67% reported it as “very important” for the development of distributed generation; and, 64% as “very important” for micro grids), Standards (59% “very important for grid storage; 67% “very important” for distributed generation; and 66% “very important” for microgrids), and the Integration of Renewables such as wind and solar (68% “very important” for large-scale grid storage; 74% “very important” for distributed generation; and 55% “very important for microgrids).
The survey results also revealed a unilateral agreement as to energy management systems, distribution management systems, and communications technologies as being the key enablers to the furtherance of these technologies into Smart Grid systems.
Europe leads the world in adopting/utilizing distributed generation and microgrids, whereas North America is prominent in storage technology. Aggressive smart grid deployment, emission reduction, and renewable resource targets are fueling the demand for these technologies in both Europe and North America. Thus, look to these regions to take the lead when it comes to developing and deploying next-generation systems. These two regions view the advanced electric grid as a gateway to innovation, energy independence, and economic security.
Of special significance to Zpryme is the input generated by the survey regarding the greatest challenges to developing these technologies. The survey respondents overwhelmingly cited a lack of standards going forward, as well as the cost associated with R&D and deployment.
Coordination efforts on standards, R&D, and funding have often been a strong point for the electricity industry, but these efforts have fallen short when it comes to energy storage, distributed generation, and microgrids. Increasing stakeholder coordination on R&D and funding can streamline overall industry efforts to drive down technology costs. Further, tying R&D and funding to performance milestones will also help in advancing technologies that show the most promise.
External funding from both the private and public sector are still are needed to develop microgrids, distributed generation, and especially grid-level storage. Funding for both R&D and for projects and pilots will assist in developing more cost effective solutions for these technologies, and enable utilities and end-users to validate the business case for these technologies. Pilots and projects will also assist in developing a set of best practices when it comes to installation, application, and optimization of each of these technologies.
Zpryme suggests that intense collaboration among all the industry stakeholders will be required to meet these challenges. Efforts to define standards, both here and abroad, seem to be the easiest of these hurdles to jump as collegiality and cooperation among the various authorities have always been mostly commendable. Funding is another issue. Zpryme does not envision a robust contribution from public coffers. The US economy and the federal deficit are in shambles and the gargantuan bill that is being tallied to cover the cost of Superstorm Sandy make the prospects for public funding look highly grim.
As a whole, the industry prospects are lucrative, but individual pure players face an uphill battle when it comes to trying to stay viable over the long-run. Thus, pure players will be well served to seek partnerships with global power engineering firms such as GE, ABB, Siemens, Toshiba, and Alstom Grid. These companies have the utility contacts and the cash that can ensure long-term sustainability for pure players.