PricewaterhouseCoopers: 6 smart grid hurdles ahead

PricewaterhouseCoopers sees growing pains for smart grids ahead even though pilots are underway in 33 states.

In a report, PricewaterhouseCoopers said utilities are trying to build alliances, define business cases and keep project costs under control. It's also unclear whether consumers will go for smart grid technology.

Here are six growing pains highlighted by PricewaterhouseCoopers:

• Capital expenses. PricewaterhouseCoopers said that 62 percent of utilities cited smart grid projects as the reason for increasing capital spending and 64 percent see expenditures increasing in 2011. The rub: the utility industry expects overall capital spending to hit $75 billion in 2010, double levels in 2004.
• Consumer adoption and rates. Given the costs of deploying the smart grid, 66 shareholder owned utilities asked for rate increases in 2009. That's the highest tally in two decades. And through February, 83 U.S. electricity or gas retail rate cases were being considered. Meanwhile, 68 percent of Americans have never heard of the smart grid.
• Smart grid returns. PricewaterhouseCoopers says analyzing the cost-benefit equation for the smart grid is "a prickly endeavor." Estimates for costs savings are plentiful, but the actual deployments and ROI theories may not line up.
• Security. Smart grids will be networked and that means cyberattacks are possible.
• Data management. With a smart grid, utilities will have a neverending stream of data. This data could be used to optimize the grid or just overwhelm utilities.
• Complicated partnerships. PricewaterhouseCoopers says that utilities will increasingly be seen as a clean energy systems integrator. Merging smart grid infrastructure with legacy grids will be challenging. In other words, the proof of concept days are over.

This post was originally published on Smartplanet.com