Assistant Secretary of Commerce Nicole Y. Lamb-Hale
Manufacturing and Services
Opening Remarks for International Smart Grid Summit
Monday, October 18, 2010
As prepared for delivery
Good Morning. Thank you, George, for the kind introduction. I would like to extend my gratitude to all of the International Smart Grid Summit panel speakers who have traveled long distances to be here today and share their insight on domestic developments and international partnerships in the Smart Grid realm.
I would also like to acknowledge the participation of the numerous international visitors who are attending GridWeek this year. We have a number of international delegates from Europe, Asia, and the Americas who will be sharing their insight on Smart Grid opportunities with U.S. and international counterparts throughout the event.
The participation of international delegations is key to fostering greater communication and coordination of global Smart Grid initiatives and will contribute to the globalization of the Smart Grid community.
This morning I would like to set the stage for our International Smart Grid Summit, which will highlight International Smart Grid Implementation, International Approaches to Adoption and Support among Smart Grid Consumers, and the Global Smart Grid Innovation Ecosystem.
Throughout the day, we will be hearing how countries worldwide are developing Smart Grid policies and pilot projects, engaging electricity consumers, and fostering R&D and innovation in the Smart Grid sphere.
Our objective is to discuss these country-specific Smart Grid programs, identify common themes and lessons-learned, and advance Smart Grid implementation among countries worldwide.
Common Smart Grid Programs Worldwide
While today’s International Smart Grid Summit highlights international Smart Grid policies and priorities, you will find that a number of the significant themes and issues critical for Smart Grid deployment in various regions are incorporated throughout the conference program.
For example, the Smart Grid issues common throughout many countries of the world will be discussed throughout this week. These issues include utility operations, consumer engagement with the Smart Grid, Smart Grid implementation throughout residential, commercial, and industrial buildings, new developments in the information and communication technologies sectors, and the integration of renewable energy and electric vehicles
These issues are not unique to a specific country or a specific region. As Smart Grid pilot projects are implemented worldwide, we are finding that issues that emerged in one country years ago are also emerging in other countries.
Let me provide one example to illustrate how two countries in different regions, one in Europe and one in Latin America, addressed similar electricity grid issues at different time periods. .
Between 2000 and 2005, the Italian utility, Enel, provided smart meters to its entire customer base. This was quite a remarkable feat, particularly when one considers that this project started over ten years ago.
The Smart Meter installation project in Italy commenced ten years ago. However, Brazil embarked on a similar project that addresses the same grid issues just last year.
In 2009, Brazil approved the initial installation of 200,000 smart meters, a program which will grow in coming years.
Smart meters installation is crucial to Italy and Brazil, as both countries need to monitor electricity usage, manage energy flow, and reduce electricity line losses.
Key to both the Italian and Brazilian smart meter installation programs is the strong involvement from both the national utility and the private-sector smart meter vendor community.
Similarly, numerous countries have established Smart Grid Task Forces or Smart Grid Working Groups at the national level to coordinate and streamline Smart Grid policies and projects across their government agencies or ministries.
You will hear shortly about the EU Task Force on Smart Grid. In addition, we have a Smart Grid Task Force within the U.S. Federal Government that coordinates the numerous federal Smart Grid programs.
This past spring, India launched a Smart Grid Task Force to advance inter-ministerial coordination and R&D collaboration among government counterparts. The governments of Japan and South Korea have also coordinated internally within their respective countries on establishing government-wide Smart Grid programmatic exchanges.
What is most striking is that national Smart Grid programs and fora have emerged independently of each other in numerous countries. Independently, countries are addressing their inadequate or outdated grid infrastructures, and thus we are witnessing the emergence of similar Smart Grid policies, fora, and projects throughout the world. By discussing these commonalities among numerous countries throughout today’s program, we will be able to share lessons learned and best practices in the implementation of Smart Grid systems.
The purpose of today’s exchanges is to discern the Smart Grid commonalties among countries, to discuss the drivers and enablers for Smart Grid deployment, to take stock and learn from recent pilot project programs, to share best practices and lessons learned, and to streamline global Smart Grid implementation.
I would now like to highlight one internationally-recognized forum that serves to streamline Smart Grid coordination among countries in North America, Latin America, Europe, and Asia.
International Smart Grid Action Network (ISGAN)
The International Smart Grid Action Network, or ISGAN (IZ-GAN), was launched as part of the Clean Energy Ministerial on July 20, 2010 in Washington, DC.
This network of key Smart Grid countries will collaborate in coming months to share information on existing and emerging Smart Grid programs within their respective regions.
The objective of this dialogue is to streamline international Smart Grid coordination by facilitating knowledge sharing, technical assistance, peer review, and project coordination.
Under ISGAN, both developed and developing countries are committed to reducing global greenhouse gas emissions and responding to changes in electricity generation and demand.
The first ISGAN programmatic meeting was held in Washington just a few weeks ago, and we are looking forward to engaging with international partners as this program moves forward.
Along with the Department of Energy, the Commerce Department, both the National Institute of Standards and Technology and the International Trade Administration, are advancing the ISGAN program, which includes collaboration on international Smart Grid policies and programs.
Smart Grid Market: Domestic and International
To advance international Smart Grid coordination, the International Trade Administration has analyzed the international Smart Grid policy programs and dialogues that have emerged worldwide over the past few years.
Taking an inventory of global Smart Grid pilot projects, as well as the emergence of bilateral and multilateral dialogues, has enabled us to identify commonalities within the global Smart Grid community.
We have witnessed an incredible amount of forward movement on Smart Grid deployment, which could not take shape without leadership from the private sector Smart Grid community.
Both large multinational corporations as well as emerging privately-held companies have partnered through Smart Grid consortiums to gain a foothold in global Smart Grid markets.
In the United States, we have estimates of the benefits of implementing a Smart Grid. For example, the Department of Energy estimates that the benefits and savings of a Smart Grid in the United States alone will amount to $46 to $117 billion by 2023.
The Electric Power Research Institute has highlighted that there may be $100 billion in savings per year in the United States in averting potential lost business and grid damages due to the modernization of our domestic grid system.
IBM notes that an upgraded grid system in the United States will save $70 billion to $120 billion on new power plants and transmission lines.
However, it has been more challenging to determine the size of the Smart Grid system in the United States, due to the shifts, partnerships, and mergers of Smart Grid companies (both large and small), as well as the definitions of Smart Grid.
Because the Smart Grid is a concept, not a product, it is a challenge to determine how big this market may be, particularly in light of the fact that this market is ever-evolving.
Market data would be very key to Smart Grid companies, particularly as they determine which products to focus on and which international markets to target.
There have been some recent developments on Smart Grid market data.
In partnership with the Department of Energy, the Cleantech Group recently released its 2010 U.S. Smart Grid Vendor Ecosystem report, which estimates that $2.75 billion will be spent in 2010 alone on products solely in the sectors of advanced metering, demand response, and distribution grid management.
Considering that this is one year’s worth of market data, in three segments of the Smart Grid realm, this is very valuable information.
However, we need to bear in mind that this does not take into account a vast array of up-and-coming Smart Grid segments including appliances, energy storage units, and electric vehicles; nor does it take into consideration the services that are associated with Smart Grid implementation.
From a global perspective, it is even more of a challenge to determine the potential international market for Smart Grid products, technologies, and services, as countries worldwide have various definitions and policy priorities for the Smart Grid.
As Secretary Locke mentioned earlier this morning, countries worldwide are defining Smart Grid based on their internal energy priorities and electricity needs.
And many have embarked on grid modernization programs and Smart Grid pilot projects, recognizing the need to increase energy efficiency and reduce greenhouse gas emissions, while providing electricity to a greater number of their populations.
According to some reports, the projected global market for Smart Grid products and related services is expected to increase from $90 billion in 2010 to $171 billion in 2014.
This should be considered only a rough estimate, since we don’t have a consistent definition globally of the Smart Grid and the numerous components that are required for a Smart Grid system.
As we move forward to address and identify Smart Grid domestic and international data, this information will serve Smart Grid companies aiming to strengthen their exports to overseas countries.
I would now like to share some insight on the National Export Initiative, which serves to advance U.S. exports to overseas markets.
National Export Initiative
Under President Obama's National Export Initiative, or NEI, we are encouraging companies to explore ways to export U.S. products, services, and technologies that will stimulate smart grid development.
Launched in March 2010, the NEI, aims to double U.S. exports in the next five years and support 2 million jobs within the United States.
As an emerging industry which has access to vast venture capital resources and expanding exports to global markets, U.S. Smart Grid products, technologies and services will contribute to global Smart Grid implementation, while increasing job creation in an emerging, clean energy sector.
For those of us in the Smart Grid arena, we are in the midst of very exciting times for Smart Grid implementation.
While the domestic Smart Grid program has been launched and is moving forward, we are now embarking upon great global opportunities in the Smart Grid sphere.
As this week’s conference progresses, I hope you will benefit from the exchanges of information on Smart Grid pilot projects, emerging technologies, progressive policies, and market developments that will enable worldwide implementation of the Smart Grid.
Thank you. I now would like to introduce our moderator for the first session on International Smart Grid Implementation, Mr. Peter Perez, Deputy Assistant Secretary for Manufacturing at the International Trade Administration.
Mr. Perez directs the Department of Commerce’s efforts to enhance the competitiveness of U.S. manufacturing and promote job growth in the U.S manufacturing sector. He leads his Unit’s efforts in developing trade policies, initiatives and programs to enhance U.S. exports. His industry analysts evaluate the impact of domestic and international economic and regulatory policies to bolster the long-term competitiveness of U.S. manufacturing. The International Trade Administration’s Manufacturing Unit covers the gamut of U.S. manufacturing, including the energy, environment, materials, aerospace, automotives, machinery, health, consumer goods, and information and communications industries.
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