Smart Evaluation of Electric Utility Smart Grid Investment Proposals

Abstract

Electric companies policy makers and regulators around the world are facing calls for smart grid updates. Sometimes these upgrades make business sense and are undertaken by electric companies as has been the case with some smart grid investments in New Zealand. Frequently however the calls for upgrades come with demands for significant subsidies to pay for them as is likely to be the case for additional smart grid investments in New Zealand. In order to evaluate these subsidy requests a cost-benefit methodology must be employed that correctly measures the societal benefits of smart grid upgrades that require a public subsidy. The application of this methodology and an understanding of its implications is necessary to the evaluation of smart grid deployment.