Utility spending on smart grid IT systems will total nearly $140 billion from 2014 through 2022

USA: Utilities have long used information technology (IT) solutions in their businesses - for customer billing, for outage responses, and for protection and control functions.

Only recently, however, has the industry recognized the critical role that IT will play as the one-way network of old evolves into a far more complex system - i.e., the smart grid. According to a recent report from Navigant Research, cumulative utility spending on IT systems for the smart grid will total $139.3 billion from 2014 through 2022.

"A dizzying array of solutions has emerged to meet utilities' IT needs for the smart grid," says Richelle Elberg, senior research analyst with Navigant Research. "This is a period of rapid change, and the difficulties associated with legacy system replacement and new system integration are not minor - but the potential benefits are real and increasingly measurable in terms of grid efficiency, reliability, and financial viability."

To meet utilities' needs and to ease this transition, IT vendors are working to develop solutions that are more interoperable, according to the report, as well as creative purchasing models, such as managed services. At the same time, legacy utility IT systems were not designed to handle the volume or the speeds of data generated by the smart grid - so new hardware may be needed, in addition to software systems, to maximize the value of information gathered by grid devices. Increasingly, utilities are looking to outsourced data centers to meet these needs.