By Lauren DeMates-
On December 3rd, 2013 the annual study Emerging Markets Smart Grid: Outlooks 2014 by the Northeast Group, LLC was released. Study illustrates that 45 emerging markets including Brazil, Russia, India, China, and South Africa will make a greater investment in smart grid infrastructure than developed countries in the next 10 years. Focal point of investments to be on smart metering and advancements for transmission and distribution grids. Goals are to reduce electricity theft, improve reliability and incorporate renewable energy. Total investments by these emerging economies expected to be $274.9bn. This extensive study also boasts a smart grid regulatory country index, scoring the 45 emerging countries.
Supporters of smart grid infrastructure applaud the increased efficiency and effectiveness of electricity delivery; Even a step further- that reliable electricity is a requirement for economic growth. There is no denying that emerging and developing countries need these benefits and to prepare for the future. Nevertheless, smart grid projects are complex and in emerging and developing countries there will be dynamic effects on social issues. A close eye should be kept on the investments to ensure that direct and indirect benefits are not captured by the few and a burden to the poor. For example, to regain the estimated $47 billion annual loss from theft, utilities need to start collecting funds from the population stealing the electricity. In impoverished areas this isn’t realistic and would result in subsidies. Statistical analysis conducted for smart metering projects in Chile concluded that benefits for society as a whole were positive, but not for customers in the areas where smart meters were implemented. Careful cost-benefit analysis of smart grid projects is needed to factor in social concerns to the local context of investments.
Our comprehensive report titled Renewable Energy 101 and the Role of Incentives provides more information on smart metering and the tough task of integrating renewables into the grid (with developed country focus).