Telecom service providers need to help energy utilities understand the value of the smart grid. Around the world, governments are requiring energy companies to prepare for the smart grid – a two-way network for the distribution of energy, coupled with a communications overlay to enable advanced management of all the network components.
“Cumulative global investment in intelligent components of the grid (is forecast) at over US$150 million by 2015.” – Innovation Observatory
There is still much uncertainty about many aspects of the smart grid. The value to the customer and to the distribution companies and retailers in the energy sector is hard to see, so investment decisions are being delayed. Communications service providers – as a key partner in any smart grid – can bring forward smart grid revenues by showing energy companies the intrinsic value of a communications infrastructure that’s ready for the smart grid.
This is hard to do, though: Energy companies are not typical buyers of communications services – they have a strong in-house tradition and a commitment to standards of reliability that even incumbent telcos would find stringent. Furthermore, in some markets technical details remain to be resolved concerning the type of communications network that the smart grid will need.
Nonetheless, Innovation Observatory believes that the smart grid is coming, and forecasts the cumulative global investment in intelligent components of the grid at over US$150 million by 2015. And we also believe that telecom service providers have a good story to tell – not just about connectivity, but also about the other changes that will accompany the smart grid – from the links between transactional data volumes and back office systems, through to security and service assurance, churn management and service bundling.
Our smart grid report publishing programme includes a recent study entitled, Assessing the Smart Grid Opportunity, which looks in depth at the opportunities for companies looking to supply smart grid infrastructure and services. Forthcoming titles will cover more detailed market forecasts, an examination of the charging and billing requirements for smart grids, and the opportunities presented by home area networks (HANs) for smart grids.
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