IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v68y2017ip2p888-898.html
   My bibliography  Save this article

A systematic review of environmental and economic impacts of smart grids

Author

Listed:
  • Moretti, M.
  • Djomo, S. Njakou
  • Azadi, H.
  • May, K.
  • De Vos, K.
  • Van Passel, S.
  • Witters, N.

Abstract

Smart grids (SGs) have a central role in the development of the global power sector. Cost-benefit analyses and environmental impact assessments are used to support policy on the deployment of SG systems and technologies. However, the conflicting and widely varying estimates of costs, benefits, greenhouse gas (GHG) emission reduction, and energy savings in literature leave policy makers struggling with how to advise regarding SG deployment. Identifying the causes for the wide variation of individual estimates in the literature is crucial if evaluations are to be used in decision-making. This paper (i) summarizes and compares the methodologies used for economic and environmental evaluation of SGs (ii) identifies the sources of variation in estimates across studies, and (iii) point to gap in research on economic and environmental analyses of SG systems. Seventeen studies (nine articles and eight reports published between 2000 and 2015) addressing the economic costs versus benefits, energy efficiency, and GHG emissions of SGs were systematically searched, located, selected, and reviewed. Their methods and data were subsequently extracted and analysed. The results show that no standardized method currently exists for assessing the economic and environmental impacts of SG systems. The costs varied between 0.03 and 1143M€/yr, while the benefits ranged from 0.04 to 804M€/yr, suggesting that SG systems do not result in cost savings The primary energy savings ranged from 0.03 to 0.95MJ/kWh, whereas the GHG emission reduction ranged from 10 to 180gCO2/kWh, depending on the country grid mix and the system boundary of the SG system considered. The findings demonstrate that although SG systems are energy efficient and reduce GHG emissions, investments in SG systems may not yield any benefits. Standardizing some methodologies and assumptions such as discount rates, time horizon and scrutinizing some key input data will result in more consistent estimates of costs and benefits, GHG emission reduction, and energy savings.

Suggested Citation

  • Moretti, M. & Djomo, S. Njakou & Azadi, H. & May, K. & De Vos, K. & Van Passel, S. & Witters, N., 2017. "A systematic review of environmental and economic impacts of smart grids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 888-898.
    • Handle: RePEc:eee:rensus:v:68:y:2017:i:p2:p:888-898
    DOI: 10.1016/j.rser.2016.03.039
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032116002744
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2016.03.039?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. McCann, Laura & Colby, Bonnie & Easter, K. William & Kasterine, Alexander & Kuperan, K.V., 2005. "Transaction cost measurement for evaluating environmental policies," Ecological Economics, Elsevier, vol. 52(4), pages 527-542, March.
    2. Siano, Pierluigi, 2014. "Demand response and smart grids—A survey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 461-478.
    3. Faruqui, Ahmad & Harris, Dan & Hledik, Ryan, 2010. "Unlocking the [euro]53 billion savings from smart meters in the EU: How increasing the adoption of dynamic tariffs could make or break the EU's smart grid investment," Energy Policy, Elsevier, vol. 38(10), pages 6222-6231, October.
    4. Blumsack, Seth & Fernandez, Alisha, 2012. "Ready or not, here comes the smart grid!," Energy, Elsevier, vol. 37(1), pages 61-68.
    5. Kornhauser, Lewis A, 2000. "On Justifying Cost-Benefit Analysis," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 1037-1057, June.
    6. Eltigani, Dalia & Masri, Syafrudin, 2015. "Challenges of integrating renewable energy sources to smart grids: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 770-780.
    7. Spiros Livieratos & Vasiliki-Emmanouela Vogiatzaki & Panayotis G. Cottis, 2013. "A Generic Framework for the Evaluation of the Benefits Expected from the Smart Grid," Energies, MDPI, vol. 6(2), pages 1-21, February.
    8. Personal, Enrique & Guerrero, Juan Ignacio & Garcia, Antonio & Peña, Manuel & Leon, Carlos, 2014. "Key performance indicators: A useful tool to assess Smart Grid goals," Energy, Elsevier, vol. 76(C), pages 976-988.
    9. Usman, Ahmad & Shami, Sajjad Haider, 2013. "Evolution of Communication Technologies for Smart Grid applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 191-199.
    10. Niesten, Eva & Alkemade, Floortje, 2016. "How is value created and captured in smart grids? A review of the literature and an analysis of pilot projects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 629-638.
    11. Colak, Ilhami & Sagiroglu, Seref & Fulli, Gianluca & Yesilbudak, Mehmet & Covrig, Catalin-Felix, 2016. "A survey on the critical issues in smart grid technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 396-405.
    12. Yuan, Jiahai & Hu, Zhaoguang, 2011. "Low carbon electricity development in China--An IRSP perspective based on Super Smart Grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 2707-2713, August.
    13. Xenias, Dimitrios & Axon, Colin J. & Whitmarsh, Lorraine & Connor, Peter M. & Balta-Ozkan, Nazmiye & Spence, Alexa, 2015. "UK smart grid development: An expert assessment of the benefits, pitfalls and functions," Renewable Energy, Elsevier, vol. 81(C), pages 89-102.
    14. van Dam, S.S. & Bakker, C.A. & Buiter, J.C., 2013. "Do home energy management systems make sense? Assessing their overall lifecycle impact," Energy Policy, Elsevier, vol. 63(C), pages 398-407.
    15. Aghaei, Jamshid & Alizadeh, Mohammad-Iman, 2013. "Demand response in smart electricity grids equipped with renewable energy sources: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 18(C), pages 64-72.
    16. Mahmood, Anzar & Javaid, Nadeem & Razzaq, Sohail, 2015. "A review of wireless communications for smart grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 248-260.
    17. Connor, Peter M. & Baker, Philip E. & Xenias, Dimitrios & Balta-Ozkan, Nazmiye & Axon, Colin J. & Cipcigan, Liana, 2014. "Policy and regulation for smart grids in the United Kingdom," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 269-286.
    18. Nijhuis, M. & Gibescu, M. & Cobben, J.F.G., 2015. "Assessment of the impacts of the renewable energy and ICT driven energy transition on distribution networks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1003-1014.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kakran, Sandeep & Chanana, Saurabh, 2018. "Smart operations of smart grids integrated with distributed generation: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 524-535.
    2. Iolanda Saviuc & Herbert Peremans & Steven Van Passel & Kevin Milis, 2019. "Economic Performance of Using Batteries in European Residential Microgrids under the Net-Metering Scheme," Energies, MDPI, vol. 12(1), pages 1-28, January.
    3. Asad Ahmed & Osman Hasan & Falah Awwad & Nabil Bastaki, 2020. "Formalization of Cost and Utility in Microeconomics," Energies, MDPI, vol. 13(3), pages 1-19, February.
    4. Ding, Weiyong & Xu, Maochao & Huang, Yu & Zhao, Peng, 2020. "Cyber risks of PMU networks with observation errors: Assessment and mitigation," Reliability Engineering and System Safety, Elsevier, vol. 198(C).
    5. Lamnatou, Chr. & Chemisana, D. & Cristofari, C., 2022. "Smart grids and smart technologies in relation to photovoltaics, storage systems, buildings and the environment," Renewable Energy, Elsevier, vol. 185(C), pages 1376-1391.
    6. Tomas Baležentis & Dalia Štreimikienė, 2019. "Sustainability in the Electricity Sector through Advanced Technologies: Energy Mix Transition and Smart Grid Technology in China," Energies, MDPI, vol. 12(6), pages 1-21, March.
    7. Dranka, Géremi Gilson & Ferreira, Paula, 2020. "Towards a smart grid power system in Brazil: Challenges and opportunities," Energy Policy, Elsevier, vol. 136(C).
    8. Zhuang, Minghao & Lu, Xi & Peng, Wei & Wang, Yanfen & Wang, Jianxiao & Nielsen, Chris P. & McElroy, Michael B., 2021. "Opportunities for household energy on the Qinghai-Tibet Plateau in line with United Nations’ Sustainable Development Goals," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    9. Tu, Chunming & He, Xi & Shuai, Zhikang & Jiang, Fei, 2017. "Big data issues in smart grid – A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 1099-1107.
    10. Qingsong Wang & Ming Cheng & Giuseppe Buja, 2017. "Integration of Electric Springs and Multi-Port Transformers—A New Solution for AC Microgrids with Renewable Energy Sources," Energies, MDPI, vol. 10(2), pages 1-18, February.
    11. Mojtaba Jorli & Steven Van Passel & Hossein Sadeghi Saghdel, 2018. "External costs from fossil electricity generation: A review of the applied impact pathway approach," Energy & Environment, , vol. 29(5), pages 635-648, August.
    12. Majidi Nezhad, M. & Groppi, D. & Marzialetti, P. & Fusilli, L. & Laneve, G. & Cumo, F. & Garcia, D. Astiaso, 2019. "Wind energy potential analysis using Sentinel-1 satellite: A review and a case study on Mediterranean islands," Renewable and Sustainable Energy Reviews, Elsevier, vol. 109(C), pages 499-513.
    13. Giovanni Bianco & Barbara Bonvini & Stefano Bracco & Federico Delfino & Paola Laiolo & Giorgio Piazza, 2021. "Key Performance Indicators for an Energy Community Based on Sustainable Technologies," Sustainability, MDPI, vol. 13(16), pages 1-14, August.
    14. Das, Laya & Munikoti, Sai & Natarajan, Balasubramaniam & Srinivasan, Babji, 2020. "Measuring smart grid resilience: Methods, challenges and opportunities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 130(C).
    15. Nazir, Lubna & Sharifi, Ayyoob, 2024. "An analysis of barriers to the implementation of smart grid technology in Pakistan," Renewable Energy, Elsevier, vol. 220(C).
    16. Ramos, Carmen & García, Ana Salomé & Moreno, Blanca & Díaz, Guzmán, 2019. "Small-scale renewable power technologies are an alternative to reach a sustainable economic growth: Evidence from Spain," Energy, Elsevier, vol. 167(C), pages 13-25.
    17. Abbas Mardani & Dalia Streimikiene & Edmundas Kazimieras Zavadskas & Fausto Cavallaro & Mehrbakhsh Nilashi & Ahmad Jusoh & Habib Zare, 2017. "Application of Structural Equation Modeling (SEM) to Solve Environmental Sustainability Problems: A Comprehensive Review and Meta-Analysis," Sustainability, MDPI, vol. 9(10), pages 1-65, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lamnatou, Chr. & Chemisana, D. & Cristofari, C., 2022. "Smart grids and smart technologies in relation to photovoltaics, storage systems, buildings and the environment," Renewable Energy, Elsevier, vol. 185(C), pages 1376-1391.
    2. Colak, Ilhami & Sagiroglu, Seref & Fulli, Gianluca & Yesilbudak, Mehmet & Covrig, Catalin-Felix, 2016. "A survey on the critical issues in smart grid technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 396-405.
    3. Paterakis, Nikolaos G. & Erdinç, Ozan & Catalão, João P.S., 2017. "An overview of Demand Response: Key-elements and international experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 871-891.
    4. Shaukat, N. & Khan, B. & Ali, S.M. & Mehmood, C.A. & Khan, J. & Farid, U. & Majid, M. & Anwar, S.M. & Jawad, M. & Ullah, Z., 2018. "A survey on electric vehicle transportation within smart grid system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1329-1349.
    5. Eid, Cherrelle & Codani, Paul & Perez, Yannick & Reneses, Javier & Hakvoort, Rudi, 2016. "Managing electric flexibility from Distributed Energy Resources: A review of incentives for market design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 237-247.
    6. Reddy, K.S. & Kumar, Madhusudan & Mallick, T.K. & Sharon, H. & Lokeswaran, S., 2014. "A review of Integration, Control, Communication and Metering (ICCM) of renewable energy based smart grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 180-192.
    7. Hu, Zheng & Kim, Jin-ho & Wang, Jianhui & Byrne, John, 2015. "Review of dynamic pricing programs in the U.S. and Europe: Status quo and policy recommendations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 743-751.
    8. Ellabban, Omar & Abu-Rub, Haitham, 2016. "Smart grid customers' acceptance and engagement: An overview," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 1285-1298.
    9. Masood, Bilal & Baig, Sobia, 2016. "Standardization and deployment scenario of next generation NB-PLC technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 1033-1047.
    10. Märkle-Huß, Joscha & Feuerriegel, Stefan & Neumann, Dirk, 2018. "Large-scale demand response and its implications for spot prices, load and policies: Insights from the German-Austrian electricity market," Applied Energy, Elsevier, vol. 210(C), pages 1290-1298.
    11. Jun Dong & Rong Li & Hui Huang, 2018. "Performance Evaluation of Residential Demand Response Based on a Modified Fuzzy VIKOR and Scalable Computing Method," Energies, MDPI, vol. 11(5), pages 1-27, April.
    12. Guillermo Ivan Pereira & Patrícia Pereira Silva & Deborah Soule, 2018. "Policy-adaptation for a smarter and more sustainable EU electricity distribution industry: a foresight analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 20(1), pages 231-267, December.
    13. Abdi, Hamdi & Beigvand, Soheil Derafshi & Scala, Massimo La, 2017. "A review of optimal power flow studies applied to smart grids and microgrids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 742-766.
    14. Mahmud, Khizir & Town, Graham E. & Morsalin, Sayidul & Hossain, M.J., 2018. "Integration of electric vehicles and management in the internet of energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 4179-4203.
    15. Mahmud, Khizir & Khan, Behram & Ravishankar, Jayashri & Ahmadi, Abdollah & Siano, Pierluigi, 2020. "An internet of energy framework with distributed energy resources, prosumers and small-scale virtual power plants: An overview," Renewable and Sustainable Energy Reviews, Elsevier, vol. 127(C).
    16. Feuerriegel, Stefan & Neumann, Dirk, 2016. "Integration scenarios of Demand Response into electricity markets: Load shifting, financial savings and policy implications," Energy Policy, Elsevier, vol. 96(C), pages 231-240.
    17. Chou, Jui-Sheng & Gusti Ayu Novi Yutami, I, 2014. "Smart meter adoption and deployment strategy for residential buildings in Indonesia," Applied Energy, Elsevier, vol. 128(C), pages 336-349.
    18. McPherson, Madeleine & Stoll, Brady, 2020. "Demand response for variable renewable energy integration: A proposed approach and its impacts," Energy, Elsevier, vol. 197(C).
    19. Feuerriegel, Stefan & Neumann, Dirk, 2014. "Measuring the financial impact of demand response for electricity retailers," Energy Policy, Elsevier, vol. 65(C), pages 359-368.
    20. Haidar, Ahmed M.A. & Muttaqi, Kashem & Sutanto, Danny, 2015. "Smart Grid and its future perspectives in Australia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 1375-1389.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:68:y:2017:i:p2:p:888-898. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.