In order to cope with the ever-increasing demand for energy, many APAC governments have been exploring more efficient and renewable energy options, like smart grid technology. But with energy consumption increasing year-on-year, why is it taking so long to implement alternative energy solutions?
Why is Smart Grid Adoption Important for the APAC Region?
A smart grid is a large global commercial venture that aims to modernize the existing power grid by using the latest technology, which helps utilities to minimize the level of transmission and distribution losses, improve power system efficiency, and optimize the utilization of resources.
It also improves the reliability of the power grid by registering and reducing the frequency and duration of disturbances, faults, and outages. This can be achieved with the help of advanced metering infrastructure, data management software, and communication networks.
But if smart grids are so beneficial, why is the APAC region facing so many hurdles in adopting smart grid technology?
Consulting the Experts
In preparation for the upcoming Renewable Energy India Expo next Wednesday, TechNavio analysts surveyed industry experts and professionals in the Smart Grid Market to get a better understanding of the pros and cons to consider when adopting smart grid technology.
What are the Main Concerns for Adopting Smart Grid Technology?
High Cost
When we asked smart grid professionals what they thought the biggest challenges are for adopting a smart grid system, 38 percent of respondents feel that, at the present time, it is just too costly to implement and maintain.
About two-thirds of the total investment in the higher-cost estimate would be required to upgrade substations, meters, lines, billing, and metering systems on the retail side to enable smart grid technologies and replace aging equipment.
Power utilities will also have to spend funds on the installation of sensors and other safety equipment to meet safety standards. However, large public utilities are in a better position as they can recover the money invested due to their large consumer base. Smaller utilities find it more difficult to invest and recover their capital.
Lack of Government Support and Awareness
In addition to high cost, 32 percent of survey respondents rank the lack of government support and initiatives as “highly important” when asked about reasons hindering growth and adoption of smart grid technologies. Another 40 percent of respondents peg lack of government support as “important”.
In order for utilities providers to overhaul their power grids, they need the support of the government, through not only financially-backed initiatives, but also to increase awareness, which respondents also identify as a major concern for the Smart Grid Market.
Security Issues
Last but not least, security of the smart grid network has been an area of concern for the Power Utilities sector given the frequent exchange of sensitive information via communication networks such as the internet, intranets, corporate networks, and extranets.
Several government have defined the primary requirement of smart grid systems is to protect the power grid infrastructure against known vulnerabilities by investing in Smart Grid Cyber Security. Smart grids have high levels of computing and internet protocol-based connectivity, thus making them susceptible to hackers. This increases the security risk of the data of customers who are connected to the smart grid.
However, with increasing advances in technology it is difficult to predict the effectiveness of these measures against illegal hacking. This is a serious concern, as any third party can gain access to the software system of the smart grids.
Because of their extensive geographical distribution and the enormous number of end-users, the grid’s vulnerability to such threats becomes very high. Without adequate security, the grid may face serious challenges such as grid instability, utility fraud, and loss of user information and energy consumption data.
The Power Utilities sector needs various controlling techniques to moderate the adverse effects of unauthorized access of smart grid data. For instance, hackers could assume control of smart grid applications and servers and access confidential information.
