London, U.K. --- (METERING.COM) --- December 3, 2009 - The United Kingdom government has announced £6 million in funding for the development of smart grid technologies over the next two years.

The Smart Grid Capital Grant program, which was announced alongside the U.K. government’s announcement of a nationwide electricity and gas smart meter rollout to homes and businesses by 2020, is aimed at supporting projects to demonstrate the integration of practical and innovative technologies in electricity networks or to promote the opportunities and benefits of smart grids.

Among these are energy storage or other mechanisms to flatten peak demand or manage intermittent generation, communication devices, sensors and demand management tools, equipment or infrastructure to aid reduction of electrical losses or more efficient use of electrical assets, and efficient solutions supporting distributed generation including renewable energy.

Grants will support up to 25 percent of the total project costs, with up to 20 percent more for small business upliftment and 15 percent for partnerships.

“Smart grids will help manage the massive shift to low carbon electricity such as wind, nuclear and clean fossil fuels,” said Lord Hunt at the launch of the fund. “Globally the business of developing smart grids has been estimated at £27 billion over the next 5 years and the UK has the know-how to be part of that.”

In a new document, “Smart grids: the opportunity,” released at the same time, the government says the development of a smart grid is a key plank in the U.K.’s transition to a low carbon economy. Building the smarter grid infrastructure would also contribute to the nation’s wider productivity and competitiveness, and create jobs in a high skill local smart grid industry.

However early decisions that are made will set the direction for coming decades, so it must be ensured that the right investments are made now. The challenge is to meet near-term network needs while building in the flexibility required to accommodate the range of future low carbon technologies in the longer term.

Accordingly investment will be needed for large demonstration projects, with a combination of geographical scale and functional depth, and replication in different locations; optimizing the connection of new generation to transmission and distribution networks; understanding local needs and the influence of existing infrastructure; and gathering information to build a robust analysis of the costs and benefits associated with different technologies and approaches.

A detailed smart grids route map is currently being developed by the Electricity Networks Strategy Group (ENSG), which is acting a high level forum bringing together key stakeholders in electricity networks, including the electricity network companies, the regulatory Ofgem, and the government. This document, which will be published in early 2010, will look at policy, regulation, market and industry structures, investment and customer engagement, identifying opportunities for smart grid implementation and barriers that could limit progress.