Published by U.S. Association for Energy Economics Dialogue
Navigant experts Melissa Chan, Daniel Handal, Thomas Murray, and David Felicano provide insight into the initial deployment costs of AMI and Smart Grid development.
Many in the electricity industry agree that transforming current U.S. electricity infrastructure to a Smart Grid – automating transmission, distribution, and metering systems – could make electricity delivery more reliable and efficient while saving money for consumers. However, upgrading existing infrastructure will be expensive.
The U.S. DOE Smart Grid Investment Grant (SGIG) program is a very small part of the spending needed to develop a nationwide Smart Grid. However, the result of this spending is not trivial. Immediate results of the U.S. DOE SGIG program are the installation and deployment of a portion of the infrastructure needed for a nationwide Smart Grid. Longer term decisions made in the public and private sector to deploy additional assets and electricity services could be based on the lessons learned and insights into the economic, environmental, and social benefits gained from this government sponsored deployment.
AMI asset costs are estimated using SGIG reported costs. These unit costs were used to estimate the cost to deploy AMI at SGIG program costs observed through Q3 2011, and see that 81% of installation costs are due to the meter. The SGIG program results provide additional insight into costs by offering greater detail on cost by utility type, communication system type, and customer class per utility. These costs are summarized in the results, but it’s recommend to update them throughout the SGIG program for greater accuracy.
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