More than €5 billion invested in smart grids in Europe

More than €5 billion has been invested in some 219 smart grid projects in Europe to date, and conservatively estimated investment could top €56 billion by 2020, according to a new report from the European Commission’s in-house science service, the Joint Research Centre (JRC).

The vast majority of these investments were made in the old member states (EU15), while the new member states (EU12) tend to lag behind.

The report, “Smart grid projects in Europe: Lessons learned and current developments,” is aimed to form the basis of a ongoing catalogue of review of smart grids projects in Europe.

According to the report more than half of the investments to date are in deployment projects, mainly smart meter rollouts, while R&D and demonstration projects account for a much smaller share. Most R&D and demonstration projects are small to medium size – around €4.4 million and €12 million respectively – suggesting the need to invest in larger scale demonstrations to gain a better knowledge of the functioning and impacts of solutions and to validate results to a broader extent.

However, the uneven distribution of projects and their different pace of deployment across Europe could make trade and cooperation across national borders more difficult and jeopardize the timely achievement of EU energy policy goals.

The report notes that the collected projects highlight the trend towards fruitful cooperation between different organization, which bring together network operators, academia, research centers, manufacturers and IT companies. However, while a significant amount of investment has been devoted to projects that address the integration of different smart grid technologies, the new challenge these projects are now confronting is their integration.

The report also says the project data confirm the leading role the distribution system operators (DSOs) are playing in coordinating smart grid deployment in Europe.  DSO led projects represent just over a quarter of all projects and two-thirds of investment. However, current regulation in member states generally provides the network owners/operators with incentive to improve cost efficiency by reducing operation costs rather than by upgrading grids, and there is a need to move to a more service-based business model.

The implementation of smart grids is a significant opportunity for European industry to research, to market and to export new technologies, to create new jobs and maintain global technological leadership,” commented European commissioner for Research, Innovation and Science, Máire Geoghegan-Quinn. “We are only at the beginning of the transition to smart grids, and at this stage, sharing the results of research projects can help increase the stock of knowledge and add impetus to innovation in this field.

The report also highlights that consumer awareness and participation is crucial for the success of smart grid projects, and that consumers should become involved in the early stages of project development.

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