Guidelines for conducting a cost-benefit analysis of Smart Grid projects

Smart Grids are a central element in the European strategy towards a low-carbon energy future. But renewing the electrical system does not come cheap – according to the International Energy Agency (IEA), some EUR 1.5 trillion will be needed from 2007 to 2030 to move from generation to transmission and distribution.

 Given the scale of these investments, a methodological approach is needed to estimate the costs and benefits of Smart Grids, based on actual data from pilot projects. This is why the Joint Research Centre (JRC) analysed the results and lessons learned from past and ongoing European Smart Grid projects and then developed a comprehensive assessment framework for cost-benefit analysis (CBA). This was then fine-tuned using a real case study (InovGrid, led by Portuguese distribution operator EDP Distribuição).