Already tired of Smart Grid ?

Ngram and Trends

In a previous post, you can see the Ngram of the words “smart grid” (see next figure). It shows the rise of the “Smart Grid” concept, which appears in 2004.

But unfortunately, data is only available until 2008. luckily, another tools from Google gives the trend of the use of the words “Smart Grid” from 2004 until today. Simply called “Trends“, this tool creates graph reflecting how many searches have been done for a particular term, relative to the total number of searches done on Google over time. Applied on “Smart Grid”, the resulting graph is the following.

Rise and fall

The exponential increase of the relative use of the words “Smart Grid” from 2005  is confirmed. But it stops shortly after, in 2009. Then, a small but sustained decrease took place until today. Why? The curve does not give any answer. But it shows that people lost interest in it. Smart Grid is not hype anymore.

A meaningless concept used to sell

I already explained in a previous post that there is not one definition of the term “Smart Grid”, but as many as there are people trying to define it. Nobody knows what is it. Sorry, it is not correct:  everybody knows it, but everybody has another understanding (it is philosophically the same. There is no “True” Smart Grid).

Companies are selling products labeled “Smart Grid”. To market their products, they foster their own vision of the smart grid, a narrow one, the one that better fits their interest and the promotion of their products. Being more and more exposed to this kind of misleading advertising, customers (who are not as stupid as marketers wish) slowly understand that it is not directly interesting for them to invest in this kind of Smart Grid technologies.

Smart Meters is the most telling example how utilities try to convince their clients to pay for a tool they don’t need, but that the utility need, resulting in higher electricity bills. I’ve already explained this in detail in previous posts. Utilities’ “clever” idea is that customers pay at their place for investments they should make on their own.

Many observers of the sector reach similar conclusions. Even, if the majority remains optimistic, like in the article “Fear of Smart Grid Stall-Out“.

Promising but abused 

Smart Grid market is expected to reach $80.6 billion in 2016 from $22.8 billion in 2011, according to MarketsAndMarkets. Navigant Research (previously Pike Research), meanwhile, is forecasting a growth from $33 billion annually in 2012 to $73 billion by the end of 2020. According to IDC Energy Insights, smart grid spending will reach nearly $46.4 Billion worldwide in 2015. SmartGridNews.com, at its turn, estimated world smart grid sales to $36.5 billion in 2012, a growth of 30% on 2011. These values demonstrate that opportunities in Smart Grid market are huge.

But they also demonstrate, again, that nobody knows what Smart Grid means. If you look at these reports, you will discover that these companies have different definitions, which explains that not only forecast, but also past market values, are quite different from one analyst to the other. I am surprised that people referencing such analysis, in particular journalists, are not shocked by these incoherences.

By Misusing the concept of Smart Grid, companies therefore risk to kill the goose that lays the golden egg. As I always explain in my posts about Smart Grid, I don’t say that Smart Grid tools are not useful, on the contrary. But I criticise the way companies and utilities are using the term and cheating customers, consciously or unintentionally.

Our prediction

Smart Grid market will continue to enjoy two digits growth, even if we don’t know what it represents exactly. Analysts will continue to give completely different estimations and forecasts, and nobody will seem to care about this incoherence.

More and more companies will use the term Smart Grid, even for products they sell already since many years, even before the concept was created.

Consumer organisations, new or existing, will criticise the fact that electricity bills are every years higher. Sorry to tell it, but you will pay more for electricity. Smart Grid will be blamed, even if it is responsible for only a small share of the price increase. Consumers will be lost. Many will then understand that the Smart Grid is in fact not so smart?

Then, I hope that the terms Smart Grid will slowly disappear, leaving the place to clear and understandable terms, like Information, Communication & Electricity Technologies (ICET).

Gauthier Dupont
Dupont Energy Consulting GmbH