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The next wave of smart grid investment

The next wave of smart grid investment

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Municipal utilities might be minor players in the U.S. power generation industry, but they're expected to be one of the largest drivers of smart grid investments over the next five years, a survey finds.

Municipal utilities are minor players in the power generation industry, serving only about 13 percent of electric customers in the United States. Despite their small share of the market, municipal utilities are expected to be one of the largest drivers of smart grid investments over the next five years, according to a report released by GTM Research.

GTM Research, which conducted a survey of muni utilities for the past two years, anticipates the next wave of smart grid expenditures will be led by municipal utilities, accounting for close to $7 billion through 2017. Of those surveyed, 72 percent said smart meters are a prerequisite to the utility's vision of a smarter grid, reported Greentech Media, the parent company of GTM Research.

Investor-owned utilities were the initial drivers of smart grid deployments, with more than 75 percent already pursuing grid modernization initiatives, including advanced metering infrastructure (AMI) and distribution automation. These investor-owned utilities often took a learn by doing approach that resulted in disparate networks and a fragmented vendor supply chain, GTM said.

As a result, integrating these moving parts, such as legacy hardware and networks, will be the crux for vendors hoping to capture business from municipal utilities that plan to upgrade.

Municipal utilities, which typically have much smaller budgets and customer base than investor-owned utilities, also will need smart grid tech that's lower cost than what's currently available.

Photo: Flickr user eli francis, CC 2.0

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Kirsten Korosec

Contributing Editor

Kirsten Korosec has written for Technology Review, Marketing News, The Hill, BNET and Bloomberg News. She holds a degree from Northwestern University's Medill School of Journalism. She is based in Tucson, Arizona. Follow her on Twitter. Disclosure