Regulatory change needed to improve the smart grid

Accenture and the World Economic Forum have released a report on smart grids

Consultancy Accenture and the World Economic Forum have today released a report entitled What makes a successful smart grid pilot?, which assesses some of the world's 90 smart grid pilots.

The report states that regulatory change is needed to encourage utilities to engage in expensive smart grid projects, and that utilities themselves need to improve their engagement with the consumer.

“There is a risk of lowest common denominator smart grid rollouts, with basic functionality and limited consumer response,” said David M Rouls, managing director at Accenture Smart Grid Services. “Regulatory conditions must be changed to reward investors for the risks they face and to encourage utilities to integrate multiple, low-carbon technologies to demonstrate the art of the possible for smart grids. And if utilities want to improve the success rate of smart grid pilots, they will need to set clearer objectives and improve consumer engagement.”

Meanwhile, Roberto Bocca, senior director and head of energy industries at the World Economic Forum, said: “To make a smart grid a sound investment for electric utilities and other companies, the business case in many countries must be strengthened – and regulation will be the key. By acting now, decision makers can increase the chances of success and avoid having the electricity infrastructure become a bottleneck to delivering a low-carbon, efficient and secure energy future.”

The report makes three key recommendations to improve smart grid pilot success:

1. Use pilots to improve regulatory incentives: Regulators should allow better incentives for utilities prepared to take risks with new technology. Similarly, there should be better incentives for producing low-carbon outcomes.
2. Apply analytical rigour in the scoping phase: Utilities need to better understand consumer opinion, and must distinguish between smart grid capabilities that rely on consumers, and those that rely on the network.
3. Improve consumer insight and engagement: Utilities should pilot smart grids with small-to-medium-sized enterprises (SMEs), which are more likely to be willing to trial the technology.

Utilities must also address data privacy and security concerns.