Smart grid deployment in emerging nations is progressing at a slower pace when compared to developed nations, especially as government investment plans in smart grids differ according to the region on the basis of the requirement of the grid infrastructure of that particular region.
In developing nations the main concern driving deployment of smart grids is to reduce transmission and distribution losses in the current grid, whereas in developed nations the main focus is on reducing carbon emissions.
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Combined together, the main objective behind a smart grid is implementing a system that can help in the operational efficiency as well as contributing to the environmental benefits in the near future.
Customer awareness about smart grid technologies can also influence the behavior of the utility in deploying the technology in the current infrastructure. The difference in the attitude of customers as well as the utilities in developed and developing nations in adopting a new technology can also change the nature of the drive for deploying the smart grid.
Although smart grid deployment can help in a major way in transforming the conventional electricity infrastructure, there will also be a difference in the deployment of the particular technology among developed and emerging nations.
The reasons behind the difference in growth could be the different topological requirements as well as the social, political and economic environment in various regions.
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By GlobalDataDifference in customer awareness in developed and emerging nations will drive the divide
Customer knowledge and awareness about smart grids is low in emerging nations compared to the developed nations. This can be a determining factor in the deployment of a smart grid infrastructure. Consumer attitude towards adopting a different technology can also be a significant factor in the deployment of smart grid technology in different nations. Implementation of an outage management system in the smart grid is done differently owing to differences in consumer psyches and the nature of the grid in different countries.
Data privacy concern will be higher in developed nations than in emerging nations
The proactive nature of the customer towards the adoption of new technologies in developed nations make these early adopters more concerned about the management of their private information in the smart grid by third parties. Unlike a traditional power system, smart grids exchange private electronic communications as well as private transactional records between utilities and end users.
Increased customer concern can create a roadblock for the deployment of the smart grid technologies unless they are properly addressed.
Technologies will act as a barrier in emerging nations
In developing countries, consumer levels of understanding about the power delivered to their home is low when compared to the consumers in developed areas like the US, Europe and Canada. In order to have smooth deployment of a smart grid system, consumer knowledge and awareness about the whole system is also an important aspect and cannot be underestimated.
Consumers need to understand the system and should know how the technology works, so as to learn more about the energy bill savings, electricity service reliability and to make sustainable energy choices.
Difference in government objectives will guide smart grid deployment differently in developed and emerging nations
The major objective of nations is to develop their current electric grid infrastructure to make it more efficient and advanced with minimum cost. The focus of investment by governments can differ depending on the requirement of the present electric infrastructure in various regions.
In emerging nations, reductions of losses in power and distribution can be the main aim for introducing an investment plan, whereas in developed nations an investment plan will be introduced on the basis of a reduction of carbon emissions in the environment.
Reduction of losses will be a driver for smart grid deployment in emerging nations
One of the major issues in the current grid system is the loss of power during transmission and distribution. The power loss is increasing with the increase in demand for electricity, especially in developing countries. According to the Organization for Economic Co-operation & Development (OECD), the demand for electricity at a global level will grow at an average annual rate of 2.5%. Developing countries will account for most of the increase in global demand. The demand for electricity in developing countries is expected to increase at the same rate as their GDP.
Cost-conscious utilities in emerging nations will be selective about technology
Deployment of smart grid technology involves a huge amount of investment. In emerging nations, utilities are more cost conscious about accepting technology compared to developed nations.
The varying attitude of consumers in adopting a particular technology restricts the scope for its growth.
The high cost related to the deployment of technologies such as synchrophasors, outage management systems (OMS) and advanced meter infrastructure (AMI) restricts the scope of adoption of smart grids among utilities in developing nations.
Sometimes, utilities are mainly concerned about the short term monetary benefits associated with the technology which restricts them from investing in and adopting the new technology.
This indifferent attitude of the utilities is inhibiting the growth of the smart grid market in emerging nations.
Utilities in developed nations are early adoptors of technology while those in developing nations take a cautious approach
Customers in developed countries are proactive in nature while accepting new technologies, compared to the customers in developing countries. Although a lower percentage of consumers are aware of the smart grid in North America and Europe, the deployment can be seen on a large scale.
The significant difference in deployment of smart grid technology in developed and developing nations is the risk-taking attitude of the utilities in the developed nations. The figure shown below demonstrates the estimated increase in the penetration of advanced meter technology in smart grid from 2006 to 2008 in the US.
More details on the Full GlobalData report.
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