By Kim Yoo-chul
Staff Reporter
LG Electronics is developing ``smart grid'' technology at a time when a growing number of countries are recognizing the urgent need to tackle global warming and saving energy.
The world's second-biggest manufacturer of flat-screen televisions has increased its investment into smart grid technology, and company officials say ``meaningful'' results will soon emerge.
``LG Electronics plans to release smart grid solutions from the latter half of 2011. LG is set to provide smart grids for commercial buildings and households from that year,'' spokesman Jerry Kim said.
Referring to the global focus on smart grids, LG Electronics said it will invest 1.5 trillion won in eco-related sectors including renewable energies and smart grids in 2010, Kim said.
``Technology for controlling compressors in air-conditioners, direct motors in washers and the speed of dryers are part of smart grid developments that LG has in minds,'' he said.
In a recent Consumer Electronics Show (CES) held in Las Vegas, LG CEO Nam Yong said ``smart'' will be the top word for global information and technology (IT) industries over the next 10 years, citing the ongoing paradigm shift seen in digital device markets.
As Nam stressed, the market for smart grids is attractive. The International Energy Agency (IEA), an inter-governmental organization that acts as an energy policy adviser to 28 mainly industrialized countries, forecasts the global smart grid market to grow to $2.9 trillion by 2030.
The modernization of the country's electric grid is a vital component of the Lee Myung-bak administration's comprehensive energy plan, which aims to reduce South Korea's dependence on oil, create jobs and help the nation's key industries compete successfully in the global market for clean energy technology.
South Korea plans to invest 960 billion won ($820 million) into smart grids this year.
Meanwhile, China plans to inject $7.3 billion, followed by the U.S. with $7 billion and Japan with $850 million in 2010, government data showed.
A ``smart grid'' ― a modernized electricity transmission and distribution system involving the increased use of digital information and control technology ― could help realize benefits, analysts say.
Smart grids rely on seamless interaction between power transmission and distribution facilities, and IT and advanced communications.
The goal of smart grids is to enable innovation and competition in new products and services that can minimize both peak and overall energy use, allowing people and companies to save money.
The demand side of smart grids includes ``smart meters,'' which provide two-way, real-time data communication between utilities companies and consumers; ``smart appliances'' that provide data and control options; and ``smart interfaces,'' which integrate distributed energy and demand response resources, or other energy loads and storage devices such as plug-in electric and hybrid vehicles.
Observers and analysts say smart grids will help provide consumers with information, automation and tools they need to control and optimize energy use.
``Such an approach will be increasingly necessary, based on a trans-sector concept and these digital developments need to tap into the economic and social multiplier effect that new broadband and smart grid infrastructure investments,'' Kim said.
LG Electronics has joined the South Korean government's massive project for a smart grid infrastructure, which are currently being tested on the southern island of Jeju.
LG, which was chosen to handle ``smart place projects'' ― part of the government work ― plans to construct consumer-focused ``smart networks'' in 400 households in a small community there.
With an aim to provide detailed solutions including energy-saving costs and the maximization of energy use, LG has formed a consortium with the group's relevant affiliates ― LG Chem, LG Telecom, LG CNS and GS Construction, the company said in a statement.
LG representatives say the cost of a truly connected home has been the biggest inhibitor on the market for some time.
Home automation, smart grids and other connected home services have real value. They can provide peace of mind and increase efficiency in the home through systems talking to one another, according to the representatives.
And with standard protocols such as Wi-Fi or IP, the process of installing connected home features is much easier than when complete rewiring was required.
``For the first time among local consumer electronics players, LG was chosen as the manager to lead the project. We want to be give credit for that fact,'' they said, adding years-long work has begun to pay off.
``Residents who have many energy-using appliances and devices may wish to have the grid interoperate with existing home area networks and a sophisticated home energy management system.''
LG Chem is supplying renewable lithium-ion batteries to General Motors (GM) of the United States and Hyundai-Kia Automotive Group for electric vehicles. LG CNS is credited with running the U-City Project organized by the Seoul Metropolitan Government.
As a long-term strategy, LG Electronics is looking to set standards for its some smart grid technology to earn royalties from companies that use its patented applications.
``Making LG's smart grid technology an international standard is critical for sustainable related businesses. LG is monitoring the development process of our home area network-related smart grid technologies in real time,'' another company representative said.
``We have been in talks to realize some of our smart grid technology as a standard,'' he said.
U.S.-based IT majors such as Google, Intel and IBM are leading key smart grid technology pioneers, while Japanese and South Korean companies are playing catch-up, analysts say.
``Japan is going one-step further than South Korea in terms of efforts for standard of smart grid tech. But Korean companies are closely collaborating with the government to stay in contact,'' Park Jong-seon, an analyst at local brokerage Eugene Investment said.
``Policy hurdles should be eased. Without national back-up, Korean companies will fall into the hands of competitors,'' Park said.
Meanwhile, analysts say the diversity of consumer needs must be considered in the design and deployment of smart grid infrastructure and devices.