Proving the Business Case for the Internet of Things

Nordic countries set the pace for smart grid regulations

Steve Rogerson
May 3, 2016
European countries – led by Nordic countries as well as Italy and the Netherlands – are at the top of an index from Washington-based Northeast Group ranking regulatory frameworks that enable power grid modernisation.
Countries were scored based on ten indicators including smart meter targets, pilot projects, financing mechanisms, distributed generation incentives and other policy measures that encourage grid modernisation. Other OECD countries such as New Zealand, South Korea and Canada joined the European countries among the leaders.
"Globally, OECD countries are by and large the leaders for their smart grid regulatory frameworks," said Ben Gardner, president of Northeast Group. "But there are also non-OECD countries that have progressive regulations in place, including Romania, Singapore and the United Arab Emirates. At the same time, surprisingly some developed countries are lagging behind. For example, Germany and Belgium have yet to agree to meet European Union smart meter targets."
Regulations have been critical for driving smart grid infrastructure investment across the world. In the European Union, regulations such as the mandate for 80 per cent smart meter penetration by 2020, are laying the groundwork for major grid modernisations. In the USA, several years ago the Smart Grid Investment Grant (SGIG) programme was a key catalyst for the smart grid market.
The study also includes indicators highlighting the benefits of smart grid investment in each country. These include demand response benefits and non-technical loss reduction benefits. For example, wealthy OECD countries are notable for their high electricity demand rates and can therefore achieve significant benefits through demand response programmes enabled by smart grid infrastructure.
Also, lower income countries can still benefit by using smart meters to reduce high non-technical loss rates. In some low-income countries, such as Nigeria, smart grid deployments are still progressing for this reason even without well-developed regulations.