3 Barriers to implementation of the Smart Grid



By now, most of us are familiar with the concepts and technologies of the smart grid; however, there is still a long way to go for full implementation and a realization of the potential that this technology can bring. In this article, we will discuss some of the barriers faced in the implementation of a smart grid.

1. Access to finance, especially in developing countries, considering market uncertainty, policy uncertainty and revenue uncertainty due to regulatory structures

Though many electricity networks around the world are in a constant state of renewal and repair, implementing smart grid technology requires an additional investment not only in acquisition, but also training and implementation to be a technological success. The business case for the smart grid is there, but the willingness and ability to implement may be lacking.

2. Limited competition in the utility market, due to no or only partial deregulation of the market

Not all energy markets are liberalized; in fact, most are not. Considered natural monopolies for a long time, energy networks and utilities are highly centralized and often very shielded from competition. Where there is no competition, there may be limited impetus to innovate.

3. Lack of standards

With many companies vying for a piece of the smart grid pie, there has seemed to be a lack of a common direction when it comes to technological standards. Each company has seemed to want to re-invent the wheel, so to speak. Though this is changing, and standards and uniform technologies are emerging; it has been a barrier to the development and in particular the roll-out of smart grid technology across the board.


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