London, U.K. --- (METERING.COM) --- December 4, 2009 - The concept of the smart grid is starting to take shape with the development of a “vision” – the first task of the high level industry Electricity Networks Strategy Group (ENSG).

The vision document says the U.K.’s smart grid will develop to support and accelerate a cost effective transition to a low carbon economy, helping the nation to meet its 2020 carbon targets, while providing the foundations for a variety of power system options out to 2050.

Specifically, smart grid could be the enabler for a radical departure from the operation of the current power system, with extensive balancing on the demand side as a fast and zero carbon alternative to carbon intensive generation, a high degree of distributed generation, and enhanced network utilization, planning and control.

In the near term the smart grid is envisaged as being able to provide enhanced grid information to reduce technical losses and better manage end user voltages, allow observation and management of increased distributed generation and ultra-low carbon vehicles, and accelerate and maximize demand side management capacity. In addition the smart grid should provide enhanced reactive compensation to increase transmission capacity across new key power flow boundaries, and facilitate optimized planning and asset utilization.

Subject to appropriate rules and protections, smart meter consumption information and other market intelligence, grid data, trials and pilots could be used to identify new patterns and develop capabilities and insight.

In the longer run, the smart grid is likely to become progressively more important, with a possible move from running generation to suit demand to running demand to suit zero carbon generation.

A number of smart grid investment paths are possible but the economic benefits vary, with cost benefit analyses of plausible values for the near term benefits (above) ranging from $1 billion to -£170 million in NPV by 2020. Thus the smart grids benefits and costs need to be better understood, which will be done through “on the ground” trialling of end to end technologies and the associated commercial and regulatory frameworks and industry capabilities.

Coupled with the launch of the vision the British government has made available up to £6 million for a new Smart Grid Capital Grant program for the development of smart grid technologies over the next two years and has issued a document, “Smart grids: the opportunity,” to reinforce its commitment to the development of a smart grid (see £6 million for smart grids in the U.K.).

The next step involves the development by the ENSG of a detailed smart grids route map. 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.