Boosting Smart Grid Market & Legislation

By Kim Jae-sup
President of the Korea Smart Grid Institute (KSGI)

The smart grid is aimed at not only reducing greenhouse gas emissions by optimizing the efficiency of the power industry and rationalizing the consumer's use of electricity, but at introducing new power technologies combined with IT, avoiding the construction of thermal power plants and large-scale power transmission lines, which cause environmental problems. Accordingly, the smart grid is an approach to address a consistent rise in power demand, riding on industrial growth, with minimum investment.
A core infrastructure project under the government's new paradigm of green growth, the smart grid is essential for nurturing the green industry like the international trend of expanding new and renewable energy sources and the supplying of electric vehicles. As such, now that the smart grid is the unavoidable direction of the development of the power industry, it is expected to form a huge market at a swift pace.
Currently, smart grid technology and business models are expected to leap as "First movers"for creating technology convergence, new products and new markets. In this regard, the domestic smart grid industry is required to take a proactive attitude to overcome uncertainties under the creative paradigm as a global leader of a new dimension differing from the past.
Even though research institutes's research outcomes are different according to economic growth rates, market size and smart grid technology, the global smart grid market is generally forecast to grow 16.4 percent at a compound annual growth rate (CAGR) over the next 10 years. Research survey firm Pike Research recently released a report projecting the value of the market at approximately $210 billion between 2010 and 2015, while SBI said the market is projected to rise to some $170 billion in 2014.
Korea, a nation with scare resources, which depends on imports for 97 percent of its energy needs, has to take a more serious look at how it will deal with energy issues since the more development picks up speed, the more energy consumption and costs rise. The nation has set a target of raising the portion of the new and renewable energy sector to 6.1 percent by 2020. In the future, the "Intelligent" smart grid will be able to have diverse, divergent power generation sources by allowing the producing and selling of power from any point, so the future energy market is expected to further expand with the smart grid playing a pivotal role in the background.
The first phase of the Jeju Smart Grid Test-bed Project is entering the second year, and the second phase will progress during the period between June 2011 and 2013 when tested technologies are standardized and employed to cover major cities.
The proliferation of the smart grid is expected to be rapid thanks to brisk exchanges of global information, as well as the fact that market-oriented development of smart grid technology and business models will likely be facilitated.
In an effort to help the Korean smart grid industry make inroads into the global market, the demand response market needs to be opened so that market needs can be created and reflected in addition to the fostering of the smart grid's core technology capability, the establishment of an intimate collaboration network for consumer participation, the building of business models and the nation's strengthening of international cooperation networks for strong leadership over the standardization of fast-changing technologies through proactive participation and continued support.
If the Act on the Facilitating of the Smart Grid, stipulating comprehensive and systematic ways of boosting the construction of an intelligent power grid and the use of related services, is approved during a parliamentary extraordinary session in April, the project to build the smart grid will likely gain momentum by establishing a legal foundation. It will also serve as an opportunity to build a stable foundation for the successful development and spread of the smart grid in Korean and global markets on top of the development of innovative technologies and creative business models. nw

Photos on courtesy of KSGI