US-EU smart grid collaboration under threat from global recession

The global recession could threaten the smart grid collaboration between the European Union and the United States, according to a recent study by business intelligence group GBI Research.

The report, Smart Grid Market in the Americas to 2020, stated that the US planned to use smart grid technology to reduce energy demand by 20%, improve system efficiency by 40% and incorporate 20% renewable sources into the total electricity capacity by 2030. But these plans could fail if the global recession continues to affect the country.

The report said that the recent reduction in the US’s sovereign credit rating from ‘AAA’ to ‘AA+’ in 2011 could affect government loans from the World Bank or International Monetary Fund (IMF), which may result in less investment, delays or even discontinuation in power infrastructure.

The US Commerce Department’s National Institute of Standards and Technology (NIST) and the EU’s Smart Grid Coordination Group (SG-CG) formed an agreement in 2011 to collaborate on smart grid standards development, with the intention of linking smart grid standards between the two groups so smart grid devices and systems can be used together globally.

Countries like Brazil and India are looking to the US before initiating their own smart grid initiatives to solve energy issues. It was hoped that successful smart grid pilot projects might encourage future investments. The report speculated that if enough investment is made in the US, the US smart meter market could grow at a CAGR of 18.6%, from 13.47 million units in 2010 to 74.38 million in 2020.