Tuesday, April 27, 2010

India cautiously adopting Smart Grid

India is adopting Smart Grid cautiously reports Financial Express. The report is based on the recent report published by Ernst & Young Analysis about Smart Grid. E&Y reports that the Smart Grid development happening across the globe will revolutionize the Power & Utility sector which has changed little in last 100 years. Advance economies like the US, parts of Europe, and Australia are adopting it a big way, the emerging economies like China, Brazil, India are following it cautiously. China is the early leader among the emerging economies. It has made Smart Grid a strategic priority and is collaborating with US through joint US-China Cooperation on Clean Energy (JUCCCE). Many Initiative are planned and MNCs like IBM, GE, Siemens AG and Cisco are investing in China's Smart Grid. India is bit slow and is taking measures through Individual company or cities. The reports indicates that because of financial risks like public ownership of utility companies, bureaucratic delays, and financial weakness of the sector, investors are cautious in investing in Smart Grid. I think, in the absence of government policy and framework the investors will not take the risk. As mentioned, previously in this blog , India is uniquely position to take advantage of Smart Grid as it is still building the energy infrastructure and can bypass the old Grid model. E&Y reports indicates India will save close to 15% of energy, which is equivalent to 12GW of power generation or total of $ 500 billion of investment. The savings in investment alone are exciting enough for India to aggressively pursue Smart Grid technology. The other benefits includes reduction in Greenhouse gases a huge indirect benefit as it will reduce numerous environmental issues directly impacting the country's socio-economic well-being. It will help meet the target of CO2 reduction it has committed at Copenhagen summit (20-25% CO2 reduction to pre-2005 level). A new emerging sector will generate numerous jobs and new businesses will generate tax and other benefits.

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