Smart Grid Cost Estimated at $476 Billion

Modernizing the U.S. electricity system and implementing the smart grid could cost $338 billion to $476 billion, according to a study by the Electric Power Research Institute (EPRI). The new technologies needed to implement the smart grid could provide benefits of $1.3 trillion to $2 trillion.

These estimates include the costs of deploying new information and communication technology, market structures, increasing production of renewable power and integrating it into the grid, expanding and maintaining infrastructure, and security measures.

The analysis presents an update of EPRI's 2004 assessment, which pegged the smart grid implementation cost at $165 billion. The new study focused on core technologies in transmission, substations, distribution, and customer interface to develop the estimate, which assumes steady deployment of smart grid technologies until 2030.

"This cost assessment factors in new technologies and customer benefits that were not available when the 2004 analysis was completed," says Mark McGranaghan, EPRI vice president of power delivery and utilization. "It can serve as a valuable resource for the industry, policymakers, and key stakeholders."

According to the study, benefits of the grid will include:

• More reliable power delivery with fewer and shorter outages


• Better cyber security and safety, with a grid that monitors itself and responds to security incidents


• Greater efficiency in the grid, with fewer energy losses


• Stronger ability to manage peak demand, which lessens the need for new sources of generation


• Better support for renewable energy and electric vehicles


• More pricing choices and information access for consumers

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