KEPCO plays leading role in "smart grid" innovation

Posted on 17 October 2013

South Korea’s state-owned electricity monopoly, KEPCO, said it will introduce new business models nationwide based on so-called “smart grid” power delivery by 2015.

The plan built upon a pilot program on the Korean island of Jeju which concluded this May, a senior company executive told at the Daegu 2013 Congress on 17 October.

“Smart grids” differ from traditional one-way power delivery grids in that sensors are installed to monitor in highly granular detail the patterns of consumption and delivery. With all parts of the grid network talking to each other, data can be analyzed in order to make decisions that maximize efficiency and the use of renewable power sources.

“We have to introduce intelligent operations systems. It will require a lot of budget, and we are considering how to ensure ROI,” said KEPCO Vice President Hwang Woo-hyun. KEPCO’s plan aims to spend $25 billion (27 trillion Won) on smart grid development by 2030, with most coming from the private sector and about $2.8 billion coming from the government. “For that heavy investment, we will need to increase the electricity price – but customers won’t like that. They will prefer to stick to the old ways,” said Hwang. Still, Hwang says the investments will pay off in the long run in ensuring a stable, flexible, and eco-friendly power grid.

Jochen Kreusel, Head of Smart Grid for Switzerland’s ABB, said any discussion of building out the smart grid concept has to begin with explaining the consumer benefit. “We have to offer them some sort of value – not always only economic value, but sometimes maybe just feeling better,” he said. “If you tell them they are consuming energy more sustainably, maybe they will feel good about that.”

Michael Valocchi, Vice President & Energy and Utilities Global Industry Leader for IBM, described smart grids as “an information platform where we’ve just scratched the surface of what we can do.” He said once major industry players build out the platform backbone, “there will be innovation on that platform by new entrants in the industry that will develop business models on top of [it].” He said key consumer benefits will be service, reliability, comfort, and peace of mind. The data analyzed in smart grid systems will also give providers an opportunity to shape highly individualized consumer offers, Valocchi said.

500 different smart grid pilot projects are being deployed around the world. “We have to show the successes of those 500 projects,” said Ronnie Belmans, Executive Director of the Global Smart Grid Federation. “But we also have to show the failures, because we can learn a lot more from the failures.”


This news story is based on the Game Changer session, “Smart grid: Energizing social innovation”, at the 2013 World Energy Congress.