Smart Grid: Analysis of Potential Benefits and Challenges for the Electric Energy Market

Abstract

Electricity consumption has been steadily increasing ever since it was introduced. Electricity distribution grids and generation plants grow in size and spread extensively throughout each country in the world. As most of today’s electricity networks have been built in the middle of the 20th century, there is an acute need in its upgrade. Otherwise, the existing system risks to be constantly overloaded which will bring to massive blackouts and/or immense environment pollution. As a result of realizing and understanding of the exigency of improvement of the current electric system the so-called Smart Grid arises. Smart grid is a modern electrical system that allows for more intelligent way of producing, distributing and using of electricity. Thanks to its up-to-date technologies and equipment, as well as proper customers’ attitude and appropriate policies, smart grid is able to change the vision of energy production. This thesis aims at investigating the actual potential of smart grid in terms of competitive advantage and describing the key challenges of the system. A statistical analysis will be developed in order to evaluate the extent and the prospects of smart grid implications.