However, this massive rise in financing – which covers advanced metering and grid automation to high voltage cabling and demand response – “is not enough to truly enable the smart grid to become a reality”.
Jonathan Robinson, senior consultant for energy & environment at consultancy Frost & Sullivan, said: “The simple fact is that the scale of potential investment is so great that energy utilities are being forced to assess and prioritise which projects to give the green light to and which to delay.
“There is actually limited bandwith within the energy utility companies to handle all the potential innovations that are taking place,” he added.
“Factors such as the growth in renewable energy and distributed generation are proving quite disruptive to the status quo in the energy market. Utilities are having to take on this challenge, whilst also investing in a range of grid upgrade projects.”
Frost & Sullivan believes the problem lies in a disconnect between energy companies and the information and communication technologies (ICT) sectors.
Frost & Sullivan’s ICT industry manager Yiru Zhong said: “Very often, the ICT sector is ready to go with a particular technology, believing strong demand exists, but is then puzzled by the slow rate of adoption in the energy sector. Having an understanding of the energy sector’s smart grid priorities is extremely helpful to determine which ICT tools are most relevant at the time.”