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[Smart Grid Market Research] (Part 2 of 3 Part Series): The U.S. Smart Meter Uprising, Zpryme Smart Grid Insights, September 2011
 

[Smart Grid Market Research] (Part 2 of 3 Part Series): The U.S. Smart Meter Uprising, Zpryme Smart Grid Insights, September 2011

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From North Carolina to New Hampshire, Hurricane Irene knocked out power, flattened communities, and even claimed numerous lives. Economic experts estimate the Eastern Seaboard calamity has caused more ...

From North Carolina to New Hampshire, Hurricane Irene knocked out power, flattened communities, and even claimed numerous lives. Economic experts estimate the Eastern Seaboard calamity has caused more than $7 billion in damage. However, in the face of tragedy it was perseverance from both hard-working professionals from utilities such as Progress Energy and strong-willed residential communities that have been working around the clock to see to it, that power be restored. The silver lining here is that natural disasters such as Hurricane Irene transport smart grid technology to the forefront because it provides a major opportunity to minimize power loss for storm-affected communities (actually the East Coast of the U.S., along the path of Irene, has many proposed projects under consideration or in development). The energy industry has taken notice as the number of installed and operational smart meters across all U.S. Smart Grid Investment Grant (SGIG) projects has increased from 307,291 to a staggering 5.68 million (see figure 2) from Q3-2010 to Q2-2011 – with only 1/3 of the total SGIG funds spent to date. In this report Zpryme analyzed data reported to the Department Energy (DOE) from 74 of the 99 projects awarded SGIG funds in 2009.

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    [Smart Grid Market Research] (Part 2 of 3 Part Series): The U.S. Smart Meter Uprising, Zpryme Smart Grid Insights, September 2011 [Smart Grid Market Research] (Part 2 of 3 Part Series): The U.S. Smart Meter Uprising, Zpryme Smart Grid Insights, September 2011 Presentation Transcript

    • Learn more @ www.zpryme.com | www.smartgridresearch.orgZpryme Smart Grid Insights Presents (part 2 of 3 part series):Smart Meter Uprising:With the skies clear of Hurricane Irene, a closer look at U.S.smart grid expenditures to date. Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.
    • Smart Meter Uprising: With the skies clear of Hurricane Irene, a closer look at U.S. smart grid expenditures to date. (Part 2 of 3 Part Series) “Smart grid devices could be beneficial in storm restoration on the distribution side indicating to dispatchers at utilities when electric service is lost.” 1 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | August 2011 Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.Quote: Ray Dotter, Strategic Communications Executive Transmission Agency PJM Interconnection, 2011Image: Hurricane Irene, NASA, 2011
    • Smart Meter Uprising: With the skies clear of Hurricane Irene, a closer look at U.S. smart grid expenditures to date. (Part 2 of 3 Part Series)“Hurricane Irene, U.S. East Coast, & the Smart Grid From North Carolina to New Hampshire, Hurricane Irene knocked out power, flattened communities, and evenSmart grid devices could be beneficial in storm restoration claimed numerous lives. Economic experts estimate theon the distribution side indicating to dispatchers at utilities Eastern Seaboard calamity has caused more than $7when electric service is lost.1 billion in damage.2 - Ray Dotter, Strategic Communications Executive However, in the face of tragedy it was perseverance from Transmission Agency PJM Interconnection both hard-working professionals from utilities such as Progress Energy and strong-willed residential communities Hurricane Irene as of August 29, 2011 at 8:00 a.m. EDT that have been working around the clock to see to it, that figure1, source: EIA power be restored. The silver lining here is that natural disasters such as Hurricane Irene transport smart grid technology to the forefront because it provides a major opportunity to minimize power loss for storm-affected communities (actually the East Coast of the U.S., along the path of Irene, has many proposed projects under consideration or in development). The energy industry has taken notice as the number of installed and operational smart meters across all U.S. Smart Grid Investment Grant (SGIG) projects has increased from 307,291 to a staggering 5.68 million (see figure 2) from Q3-2010 to Q2-2011 - with only 1/3 of the total SGIG funds spent to date. Total U.S. SGIG Funds What utilities and smart 33% spent grid integrators will make up the next 2/3 67% remaining of SGIG funding with only 1/3 spent to date? 2Communications networks were also greatly affected, as more than 1,400 cell towers and cell sites were damaged or interfered with - mainly in Virginia, New Jersey, New1 Katie Fehrenbacher, Hurricane Irene highlights need for smarter grid, August 29, 2011. York and North Carolina, source: Federal Communications Commission.2 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | August 2011Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.
    • Smart Meter Uprising: With the skies clear of Hurricane Irene, a closer look at U.S. smart grid expenditures to date. (Part 2 of 3 Part Series) Cumulative SGIG Smart Meters Installed, Q3 2010 - Q2 2011 Just skimming the surface, the smart grid could mean a as of August 29, 2011 (in millions) great deal to storm-struck communities: figure 2, source: smartgrid.gov 5.68 6.00  Reduced repair and restoration times 5.00 4.18  Effective communication (eg. pinpoint outages 4.00 without customers having to call) 3.00  Ultimately, power outages due to storms such as 2.00 1.74 Hurricane Irene could be shortened by integrating smart grid technology - marking restoration and 1.00 0.31 recovery simpler and less expensive for utilities. 0.00 Q3 2010 Q4 2010 Q1 2011 Q 2 2011 In this report Zpryme analyzed data reported to the Department Energy (DOE) from 74 of the 99 projectsJust last month Anna Marie Kukec of the Daily Herald awarded SGIG funds in 2009.asked Tabrina Davis, a spokeswoman for ComEd, and JimChilsen, a spokesman for the Citizens Utility Board, “how Methodologywould the smart grid have helped if it already had beenoperational in the recent storm outages here (referring to The purpose of this analysis is to investigate the costJune 21 and July 11 storms in Chicago, Illinois)?” structure of smart grid programs in the U.S. Further, the analysis will assist utilities in benchmarking technology cost“If Smart Grid technology had been in place, heres how it components when they are evaluating future investmentswould have minimized the impact of the storm: ComEd in smart grid technology. This analysis will also assist smartwould have known customers were out of power without grid technology providers in evaluating the costs utilitiesthem having to call us. Technology would have are willing to pay for smart grid technologies.pinpointed outages allowing us to dispatch crews morequickly to restore service. Digital automation would have The data in this report was obtained from the United Statesrerouted power or corrected a problem before an outage Department of Energy‟s smartgrid.gov website.4 The SGIGoccurs, meaning fewer customers would have seen program consists of 99 projects with a total value of aboutoutages and thousands of customers may have never $7.9 billion; the federal portion is about $3.4 billion (43%).experienced an outage.”3 The expense figures in this report reflect the total expenditures on smart grid projects which have been3Anna Marie Kukec, Daily Herald, ComEd: Smart Grid would have cut storm poweroutages, July 14, 2011. 4 Data current as of August 29, 2011.3 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | August 2011Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.
    • Smart Meter Uprising: With the skies clear of Hurricane Irene, a closer look at U.S. smart grid expenditures to date. (Part 2 of 3 Part Series)awarded SGIG funds. The figures include both expensespaid for by SGIG funds and from recipient cost share Key Findings (As of August 29, 2011)funds. Please note that the figures reported on the SGIGprogram on smartgrid.gov often change on a daily basis,  Total SGIG expenditures are $2.6 billion; meaningand thus may not match the data in this report. only 1/3 of the total SGIG award value has been spent to date across all projects.Insights (figures 3 – 6) Total SGIG Expidentures to Date by Segement  With only 1/3 of the total SGIG funds spent to date, Note: Total Expenditures = $2.6 billion SGIG projects will continue to be a key driver of the as of August 29, 2011 (in millions) figure 3, source: smartgrid.gov overall smart grid market – leaving a massive piece of the smart grid pie for fast-acting industries such as AMI $1,647.4 energy storage and cybersecurity. Distribution Automation $600.2  Over the next 3 to 5 years, utility spending on smart Customer Systems $269.5 meters will continue to make up the bulk of smart grid expenditures. Electric Transmission Systems $100.9 Distributed Energy Resources  Fierce competition among AMI and smart meter $5.6 vendors such as Landis+Gyr, eMeter, and Itron will $0 $1,000 $2,000 drive down the costs of these technologies as they compete for market share in the U.S.  AMI accounts for the largest share of total SGIG  No longer in a nascent stage, distributed spending at 63% ($1.65 billion), while distribution generation, and automation products and automation accounts for 23% ($600.2 million), technologies will witness a milestone in both utility customer systems account for 10% (269.5 million), opt-in, and subsequent deployment at the transmission systems 4% (100.9 million), and beginning of 2012. It‟s also important to note that distributed energy systems (DER) less than 1% ($5.6 given the power outages experienced from million). Hurricane Irene, the U.S. East Coast will be quick to reevaluate its need for advanced distributed o Across all SGIG segments, spending on generation and automation. communications networks total $352.4 million (13% of total SGIG expenditures).4 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | August 2011Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.
    • Smart Meter Uprising: With the skies clear of Hurricane Irene, a closer look at U.S. smart grid expenditures to date. (Part 2 of 3 Part Series) important to note that smart meter spending o Across all SGIG segments, spending on IT accounts for 41% of total SGIG spending. hardware, systems, and applications total $310.4 million (12% of total SGIG o Across all AMI costs, the average cost per expenditures). smart meter is $290.30. This includes $189.19 per smart meter, $49.29 per meter for two SGIG AMI & Customer System Asset Expenditures to Date communications, $28.45 per meter for IT as of August 29, 2011 hardware, systems, and apps, and $23.37 per figure 4, source: smartgrid.gov meter for other AMI costs. Number Incurred Percent ofSegment Quantity Cost of Total Projects o From Q3-2010 to Q2-2011, the number of ReportingAMI Assets installed and operational smart meters across - Smart Meters 5,674,816 $1,073.6 65% 69 all SGIG projects has grown from 307,291 to a - Two way communications staggering 5.68 million. $279.7 17% 66 networks and hardware - AMI IT hardware, systems, and apps $161.5 10% 63  A total of 5,217 in-home displays, 472,765 direct load - Other AMI related costs $132.6 8% 74 control devices, 152,507 programmable /Total AMI Cost $1,647.4 100% 74 communicating thermostats, and 100 smartCustomer System Assets appliances are in place at SGIG Customer System - In home displays 5,217 $4.0 1% 42 projects. - Direct load control devices 472,765 $73.1 27% 44 - Programmable communicating 152,507 $50.6 19% 34  At $115.9 million, IT hardware, systems, and thermostats - Smart appliances 100 $0.4 0% 8 applications account for the majority (43%) of - CS IT hardware, systems, and spending on SGIG customer systems. $115.9 43% 45 apps - Other customer system related costs $25.4 9% 70  A total of 3,365 automated feeder switches, 5,833Total Customer System Cost $269.5 100% 70 automated capacitors, 2,581 automated regulators,Total AMI & Customer System Costs $1,916.9 74 704 feeder monitors, and 6,292 substation monitors are in place at SGIG Distribution Automation  Smart meter spending totals $1.07 billion on 5.68 projects. million meters, and accounts for 65% of total AMI costs. Combined, communications, IT hardware,  At $224.5 million, automated feeder switches systems, and apps, and other AMI costs account for account for the largest share (37%) of spending on 35% ($573.8 million) of total AMI costs. It is also SGIG Distribution Automation.5 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | August 2011Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.
    • Smart Meter Uprising: With the skies clear of Hurricane Irene, a closer look at U.S. smart grid expenditures to date. (Part 2 of 3 Part Series)  At $3.5 million for 164 units, stationary electricity storage accounts for the largest share (62%) of spending on DER.  At $19.0 million, IT hardware, systems, and applications account for the largest share (19%) of spending on SGIG Transmission Assets. This excludes spending on „other transmission related costs‟. SGIG Electric Transmission System Asset Expenditures to Date as of August 29, 2011 figure 5, source: smartgrid.gov Number Incurred Percent ofTransmission System Assets Quantity Cost of Total Projects Reporting - PMUs 123 $8.1 8% 12 - Phasor data concentrators 21 $2.1 2% 12 - IT hardware, systems, and applications that enable transmission $19.0 19% 31 functionalities - Advanced applications $11.1 11% 14 - Other transmission related costs $60.5 60% 20Total Transmission Installed Costs $100.8 100% 20 6 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | August 2011 Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.
    • Smart Meter Uprising: With the skies clear of Hurricane Irene, a closer look at U.S. smart grid expenditures to date. (Part 2 of 3 Part Series) SGIG Distribution Automation & Distributed Energy Resource Asset Expenditures to Date as of August 29, 2011 figure 6, source: smartgrid.gov Number of Incurred Percent of Segment Quantity Projects Cost Total Reporting Distribution Automation (DA) Assets - Automated feeder switches 3,365 $224.5 37% 46 - Automated capacitors 5,833 $52.7 9% 42 - Automated regulators 2,581 $13.7 2% 32 - Fault current limiter ---- $0.5 0% 4 - Feeder monitors 704 $59.6 10% 27 - Substation monitor 6,292 $41.5 7% 17 - Distribution automation/Substation communication $71.7 12% 51 networks - Distribution management systems $60.8 10% 35 - IT hardware, systems, and applications that enable $14.0 2% 25 transmission functionalities - Other electric distribution automation related costs $61.7 10% 62 Total electric distribution automation cost $600.6 100% 62 Distribution Distributed Energy Resource (DER) Assets - Stationary electricity storage 164 $3.5 62% 3 - Plug in electric vehicles / charging stations 6 $0.2 3% 10 - DER interconnection and communication equipment 5 $0.0 1% 5 - Other DER related costs $1.9 34% 21 - Total electric DER cost $5.6 100% 21 Total DA and DER Costs $606.2 747 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | August 2011Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.
    • Smart Meter Uprising: With the skies clear of Hurricane Irene, a closer look at U.S. smart grid expenditures to date. (Part 2 of 3 Part Series) Zpryme Credits Editor Managing Editor Research Lead Robert Langston Sean Sayers Stefan Trifonov Disclaimer These materials and the information contained herein are provided by Zpryme Research & Consulting, LLC and are intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). Accordingly, the information in these materials is not intended to constitute accounting, tax, legal, investment, consulting or other professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. These materials and the information contained herein is provided as is, and Zpryme Research & Consulting, LLC makes no express or implied representations or warranties regarding these materials and the information herein. Without limiting the foregoing, Zpryme Research & Consulting, LLC does not warrant that the materials or information contained herein will be error-free or will meet any particular criteria of performance or quality. Zpryme Research & Consulting, LLC expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, noninfringement, compatibility, security, and accuracy. Prediction of future events is inherently subject to both known and unknown risks, uncertainties and other factors that may cause actual results to vary materially. Your use of these and the information contained herein is at your own risk and you assume full responsibility and risk of loss resulting from the use thereof. Zpryme Research & Consulting, LLC will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein.8 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | August 2011Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.
    • Smart Meter Uprising: With the skies clear of Hurricane Irene, a closer look at U.S. smart grid expenditures to date. (Part 2 of 3 Part Series) 9 www.zpryme.com | www.smartgridresearch.org Zpryme Smart Grid Insights | August 2011 Copyright © 2011 Zpryme Research & Consulting, LLC All rights reserved.Learn more @ www.zpryme.com | www.smartgridresearch.org