Smart Grid report examines barriers, benefits to investment

A Danfoss study reveals the need to communicate an ROI value proposition for investing in the Smart Grid.

07/20/2011


Danfoss, a manufacturer of high-efficiency electronic and mechanical components and controls for air-conditioning, heating, refrigeration and motion systems, recently commissioned a report – Industry Research & Report: Smart Grid – that summarizes the company’s qualitative research on how building owners, engineers and manufacturers view the Smart Grid.

The Ivanovich Group, a third-party firm dedicated to providing strategic services for the buildings industry, conducted the research, interviewing senior executives in facilities and plant services for industrial, K-12 schools, university campuses, commercial offices and government facilities; senior executives in engineering firms; and senior executives for HVAC product manufacturers in an effort to learn what they know and what they think about the Smart Grid. In the course of 30-minute interviews, researchers examined what this sample set perceives to be barriers and benefits to the Smart Grid and what would motivate them to invest in the Smart Grid.

“Survey responses indicate there is skepticism and still low awareness on what the Smart Grid is, what it can do and how much it will cost, which underscores the need for communication,” said Robert Wilkins, vice president public affairs at Danfoss. “The report also highlights the obstacles and challenges that must be addressed by all stakeholders if we are to realize the benefits the Smart Grid offers, including multiple opportunities for reducing peak load.”

Education and Communication are Critical

Although most respondents believe that elements of the Smart Grid will be in place within three to five years, 43 percent feel it is unlikely the Smart Grid will be substantially complete in that same time frame. 52 percent of the participants, however, indicated that they are currently engaged in some form of smart-grid activities.

The value of the Smart Grid needs to be thoroughly communicated in order to better encourage building owners to act. At the same time, by increasing the channels of communication, utilities will learn about the unique wants, needs and expectations of individual building owners, as each typically has a different set of motivators.

Stretched Budgets, Value Focused

The research also confirms that any Smart Grid investment made by building owners competes with other potential investments. In fact, building owners listed costs as the number one barrier to investment in the Smart Grid. Because many buildings are not equipped with control systems that interact with the Smart Grid, that investment may include retro commissioning or retrofits to ensure buildings can take advantage of the benefits the Smart Grid offers.

As they considered benefits of the Smart Grid, respondents cited lower electricity costs followed by better access to information that will help manage energy as the leading reasons to support the Smart Grid. Shorter duration of power outages was also important to building owners.

Other key findings of the report include:

  • Building owners, engineers and manufacturers agreed on the top four motivators to invest in Smart Grid technologies – more effective communications from utilities; financial incentives; significant cuts to electricity rates; and security.
  • In addition to costs, respondents expressed concern about reliability and power quality.
  • Heating, ventilation and air-conditioning manufacturers have assumed a leadership role in the development of the Smart Grid and relevant products.

“The Danfoss Smart Grid report has a lot of useful information for utilities and others in the Smart Grid arena about the expectations and priorities building owners have for the Smart Grid, and what will motivate them to invest in Smart Grid technologies for their buildings,” said Michael Oldak, vice president and general counsel of the Utility Telecom Council. “It’s also interesting to learn how HVAC manufacturers and consulting engineers are preparing for the Smart Grid, and what issues they believe need to be resolved in order to ensure that the Smart Grid will bring its full potential of benefits.

“Overall, it’s good to see such interest and involvement at this stage of Smart Grid developments, and the utilities industry looks forward to working with all constituencies to bring the Smart Grid to market.”



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Leaders Under 40 program features outstanding young people who are making a difference in manufacturing. View the 2013 Leaders here.
The new control room: It's got all the bells and whistles - and alarms, too; Remote maintenance; Specifying VFDs
2014 forecast issue: To serve and to manufacture - Veterans will bring skill and discipline to the plant floor if we can find a way to get them there.
2013 Top Plant: Lincoln Electric Company, Cleveland, Ohio
Case Study Database

Case Study Database

Get more exposure for your case study by uploading it to the Plant Engineering case study database, where end-users can identify relevant solutions and explore what the experts are doing to effectively implement a variety of technology and productivity related projects.

These case studies provide examples of how knowledgeable solution providers have used technology, processes and people to create effective and successful implementations in real-world situations. Case studies can be completed by filling out a simple online form where you can outline the project title, abstract, and full story in 1500 words or less; upload photos, videos and a logo.

Click here to visit the Case Study Database and upload your case study.

Bring focus to PLC programming: 5 things to avoid in putting your system together; Managing the DCS upgrade; PLM upgrade: a step-by-step approach
Balancing the bagging triangle; PID tuning improves process efficiency; Standardizing control room HMIs
Commissioning electrical systems in mission critical facilities; Anticipating the Smart Grid; Mitigating arc flash hazards in medium-voltage switchgear; Comparing generator sizing software

Annual Salary Survey

Participate in the 2013 Salary Survey

In a year when manufacturing continued to lead the economic rebound, it makes sense that plant manager bonuses rebounded. Plant Engineering’s annual Salary Survey shows both wages and bonuses rose in 2012 after a retreat the year before.

Average salary across all job titles for plant floor management rose 3.5% to $95,446, and bonus compensation jumped to $15,162, a 4.2% increase from the 2010 level and double the 2011 total, which showed a sharp drop in bonus.

2012 Salary Survey Analysis

2012 Salary Survey Results

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.