Washing machines and refrigerators have joined the ranks of smart devices. This means computerization, improving efficiency and protecting the environment. This focus is shifting to electricity, as experts tackle effective distribution from power plants to consumers.
The purpose of this smart revolution is to save costs and limit environmental impact. Cutting carbon dioxide emissions within electricity production is not just a new growth engine but also tied closely with future development.
The grid needs to incorporate renewable electricity production from a multitude of distributed sources and be capable of matching electricity supply with demand at the point of real-time usage.
"Smart grids are being found everywhere. Governments and firms are busy investing more on them. The key point is that the market is growing and Korea is taking on a bigger role,’’ said an expert on the area, Park Geun-min.
Park said smart grids are a means to modernize existing power networks, an alternative pursued by governments to address energy independence and global warming issues. Public data says that if smart technology made the United States grid 5 percent more efficient, it would equate to eliminating the fuel and greenhouse gas emissions of 53 million cars.
In structure, the supply-side and distribution-side are the utility companies including electricity, natural gas and water.
Current Smart Grid activities focus on two major areas of improvement automating information delivery including real-time data, and standardizing networks so that all sectors can communicate with one other. The cost-saving potential makes its business outlook bright.
By the end of 2018, the annual size of this business is expected to be $155 billion, 50 percent larger than the current yearly expenditure for all electrical transmission and distribution equipment.
Memoori Business Intelligence says this will require major restructuring for both the supply and demand side, if a truly "Smart Grid" is to be realized. "Our research estimates that $2 trillion will need to be invested globally by 2030. Sales of smart grid systems last year stood at just $16 billion, clearly showing the business still has a great deal of potential," the research firm added.
In the space of five years, acquisitions have grown from $134 million in 2007 to $10.6 billion in 2011. Both the growth and scale indicate the supply side is gearing up to meet the requirements of the new technology.
"Investment in the market is also on the increase with venture capital companies committing some $1 billion per year in 2010 and 2011 to smart grid suppliers," it said.
Smart grids offer a special attraction to Korea. It imports most of its energy resources but smart grids will give the nation an edge because they save energy and make bulk imports unnecessary.
Korea imports all of its coal, oil and gas, so paying high prices for energy can have a "chilling effect" on its global competitiveness. Korea has signed a letter of intent (LOI) with the state government in Hawaii to collaborate on smart grid-related projects.
"Hawaii has been pushing 'carbon free island' policies by activating eco-friendly projects including more supplements of solar energy and electricity cars,’’ said an official from the Ministry of Knowledge Economy (MKE).
Korea plans to invest $1.8 billion by 2015 on smart grid technologies, giving utility customers the ability to monitor price and supply as an incentive to lower energy usage during high-demand periods.
Driven by a desire for energy security needs, sustained economic growth and even reduced environmental impact, the government together with the country’s leading technology companies have now embarked on a bold new strategy to transform ways in which electricity is generated, distributed and used.
A demonstration project on Jeju Island as part of Korea’s smart grid initiative is a comprehensive program that includes a focus on a smart power grid, smart consumers and smart electricity services. This is an initial step toward its goal of a completely integrated smart grid by 2030, according to experts.
"Moving into this arena is enabling Korea to become a major player in the worldwide smart grid technology market, joining the United States and China at the forefront," said the MKE official.
The government said it is planning to invest as much as $2.4 billion on smart grid technology by 2030. Korea is aiming to cut annual power consumption by up to 10 percent using smart grids.
Seoul previously said it would cut carbon emissions by 4 percent less than 2005 levels by 2020. Electricity makes up about 40 percent of the overall emissions generated in Korea, Asia’s No. 4 energy consumer.
Jeju is the test-bed for the nation. "Phase Two" consists of taking the best outcomes from the test-bed and commercializing them, expanding the smart grid into selected urban areas.
This is expected to run through 2020. This expansion stage from this year to next year will mainly focus on smart renewables and electricity services. Its goals are to provide new power services and accommodate renewable energy into the power grid.
The final phase of the plan is the completion of the national smart grid, targeted for 2030. "But these efforts are just the first steps. Korea still has a long way to go," said Kim Maan-shik, a 35-year-old working on the government-organized smart grid project.