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Are smart grids in developing countries a reality?

Posted by Corey Martin on April 22, 2015

One of the more recently hyped energy technologies in developed countries is the “smart grid”. Smart grids give intelligence to traditional power transmission and distribution systems, providing simultaneous integration of resources, along with 24/7 monitoring and support. Smart grids have the potential to transform a once one-directional system into a fully integrated system where the transfer of data and integration of resources work simultaneously to optimize the power grid. But can this technology be used by developing nations to fight energy poverty and promote global conservation? 

The power of smart grids to virtually eliminate energy theft, flatten power distribution and reduce carbon footprints would appear to be an obvious solution for a developing country’s energy setbacks.  The problem is that smart grid technology costs billions of dollars - billions of dollars that developing nations don’t have to spend on advanced power applications.

But if you consider the lack of infrastructure in most developing nations, as well as the amount of future infrastructure that will inevitably need to be constructed, it makes sense to implement smart grid technology, despite the high costs, at the onset of new construction projects to prevent the need to upgrade the technology in the future. Unfortunately, attempting to increase costs and adding new technology into such projects is likely to amplify the problems that have historically plagued countries trying to escape energy poverty. Deadlines and goals for both distribution and generation upgrades are rarely met and adding to plans and complicating the process would only drag them out even more, potentially hurting growth as much as helping. 

Clearly, available capital is the greatest barrier to improving transmission quality in the developing world. But implementing a more secure energy system, which would result in less profit lost to energy theft and greater returns, may increase the incentive for private companies to invest in these markets.  Private companies have long seen the potential in these untapped markets but are hesitant to enter them due to the high risks. If governments and organizations promoting global sustainability, such as the World Bank, could join forces with private companies to fund these smart grid projects, the prospect of implementing this technology in developing countries may not be so farfetched.

The energy sectors in developing nations need to be built on a solid foundation of reliable transmission and generation systems. Projects in the Dominican Republic and Honduras, for example, have shown huge improvements with respect to reliability and cost savings after the addition of smart meters. With proper funding and cooperation between governments, private companies and organizations such as the World Bank, smart grid technology has the potential to stabilize and improve the energy infrastructure of developing countries, resulting in sustainable and available energy for all.

Edited from original submission.

Filed under: Students on Sustainability