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Across the U.S., stakeholders have often been hard-pressed to identify quantifiable direct and indirect economic and environmental benefits of grid modernization based upon real-world experience. In order to help rectify this challenge, the Smart Grid Consumer Collaborative (SGCC) recently released the Smart Grid Economic and Environmental Benefits report.

This new study is a meta-analysis of research on the actual - rather than hypothetical or forecast - economic, environmental, reliability and customer-choice benefits of various smart grid capabilities. It is intended to provide smart grid stakeholders with information to help them assess the potential value of grid modernization investments based on demonstrated experience.

For each smart grid capability we assessed, the report explains how the capability creates value relative to a traditional grid; the size of the various benefits (economic, environmental, reliability and customer choice) as supported by available research; the key drivers of these benefits; and the costs typically incurred to create those benefits.

In order to facilitate stakeholder analysis in different areas of the country, which often have very different regulatory and business conditions, the benefits are expressed as “per customer per year” whenever possible. We also provided “bookends” for the expected benefits by examining the benefits of both the typical utility deployment today and the “state of the possible” as demonstrated by utility smart grid programs.

Our analysis indicates the following:

- Smart grid capabilities offer significant benefits to consumers and society. Direct and indirect economic benefits from various capabilities total $89.04 to $154.65 per customer per year.

- Many smart grid capabilities that provide cost savings to consumers also offer environmental benefits from conservation, reducing CO2 emissions by 55 lbs. to 592 lbs. per customer per year, equivalent to 1/20th to 3/5th of a barrel of oil per person per year.

- Smart grid capabilities increase reliability by 25%, or 27.2 minutes of avoided outages per customer per year.

The table below provides details of the benefits that the SGCC found from real-world experience with various smart grid capabilities.

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In looking at the variables that drive the size of available benefits, we found that consumer engagement is critical. Program participation and participant behavior (e.g., load shifting and/or conservation) can significantly impact the outcome of various smart grid investments. Moreover, this indicates that it is incredibly important for utilities and other stakeholders to prioritize the consumer when thinking about how to optimize grid modernization investments.

Beyond consumer engagement, we believe that it is imperative that stakeholders work together to optimize the benefit drivers in order to maximize smart grid benefits to consumers and society.

To read and access the full Smart Grid Economic and Environmental Benefits report, click here.

Patty Durand is executive director of the Smart Grid Consumer Collaborative, a nonprofit organization that aims to advance the adoption of a smart grid.

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