The Economic Potential

Overall, the EPRI Framework for the Future¹ finds that an estimated $1.8 trillion per year in additional revenue might be available to both the private and public sectors by 2020 if the electric power system were wholly transformed into one that is substantially more efficient and totally reliable.

Smart grid designs and technologies would reduce power disturbance costs to the U.S. economy by $49 billion per year.

Smart grids would also reduce the need for massive infrastructure investments by between $46 and $117 billion over the next 20 years.

Transparent pricing, policy reform, and new ancillary electricity service markets provide consumers with the incentive to become a participant and encourage third party innovation. Ultimately leading to the widespread adoption of technology that allows consumers to easily control their power consumption could add $5 billion to $7 billion per year back into the U.S. economy by 2015 and $15 billion to $20 billion per year by 2020.

Distributed generation technologies — electricity produced at or near the site where it will be used — and smart, interactive storage for residential and small commercial applications could add another $10 billion per year if it achieved the 10 percent penetration mark by 2020.

Additionally, efficient technologies can dramatically reduce fuel consumption — and therefore, on a macro-level, fuel prices.

The availability of digital quality power could decide whether our economy remains a leading world power. The demand for Internet quality power will grow at a compound rate of 17 percent a year through at least 2010 — roughly in line with shipments of high-end servers.

Digital devices are highly sensitive to even the slightest interruption of power; an outage of less than a fraction of a single cycle can destroy data, halt industrial machinery and disrupt life-saving medical equipment.

Digital-quality power, with sufficient reliability and quality to serve such devices, now represents about 10 percent of total electrical load in the United States. The available digital-quality power load is expected to reach 30 percent by 2020 under business-as-usual conditions, and as much as 50 percent if the power system is revitalized to provide digital-grade service.

¹Electricity Sector Framework for the Future: Achieving a 21st Century Transformation, Electric Power Research Institute, August 6, 2003.