In 2009 the Obama administration in the US came out with its "Green New Deal." One of the key elements was the expectation that by 2020 US$11 billion will have been invested to create a smart grid extending 4800 kilometers. The investment bank Morgan Stanley anticipates that in 2010 the global smart-grid market will reach US$20 billion, soaring to US$100 billion by 2030.

Gong Junguang, a senior analyst in the Market Intelligence and Consulting Institute of the Institute for Information Industry, has written that a so-called smart grid is a kind of advanced metering infrastructure (AMI) that can perform two-way data transmission between the power suppliers and the electricity users. With sensors handling monitoring, the overall power production and distribution situation can be organized though a variety of dynamic precision adjustments, enabling the power system to function at maximum efficiency.

The American power supply system and related facilities, described by New York Times columnist Thomas Friedman as clumsy and stupid, has been run with a rigid style and old-fashioned mindset for decades. Users have no way of knowing where the power that is sent to their home comes from, and no matter what the source-coal, natural gas, wind, nuclear, solar-the rates are the same. Even if consumers have strong environmental consciousness, they cannot make autonomous choices about where the power they use should come from. Further, because the supply of electricity has been so cheap, so stable, and so universally accessible for so long, the vast majority of consumers don't give a hoot about energy saving or carbon reduction. The result is that the demand for electricity constantly increases, and power companies are happy to build ever more power plants to earn ever more money.

This logic of fattening yourself at the expense of the planet is likewise the reality in many other countries, including Taiwan. Power companies think the answer to every problem is to "increase output" but never try to figure out how to help clients "manage demand." The smart grid aims to turn this longstanding model on its head.

Once the smart grid is on track, each and every energy-using device, from home appliances to factory machines, can have a chip installed, get linked up to a data network, and be brought within the monitoring and control system of the power supplier (the electric company). The system can measure how much power is being used to operate the refrigerator, TV, climate control, and other devices in the home, and can receive commands from the user to turn specific power-using equipment on or off.

At the appropriate time, calculation of electric bills will adopt "floating prices," with the rates being different at different times and on different days. Through a control device in the home, users can know clearly how much power they are using at any given time, or how much power any given appliance or equipment is using. From this they can pre-set certain devices to operate at a lower energy-consuming level during times when demand on the power grid is higher and prices are correspondingly high. For example an air conditioner can be set at a slightly higher temperature during midday hours, or it can even be automatically turned off when a certain level of electrical fees (set by the user) has been reached. Similarly, the user can set the washing machine and dryer to start operating during off-peak hours when power is cheaper, or, when he or she goes to work, order that the power be turned off to all devices except the refrigerator, and only be turned back on after receipt of a specific command.

In order for the smart grid to enjoy two-way communication, the government will have to invest huge sums in infrastructure (such as AMI, digital electric meters, etc.) and there must be uniform standards for the communications network.

In contrast to the US, where the National Institute of Standards and Technology has already set standards for smart grids, Taiwan has yet to set any specifications. This is a big deterrent to firms who want to start designing and developing related products, so despite the fact that firms are champing at the bit, none has yet left the starting gate.

According to an analysis done by the Institute for Information Industry, as global warming becomes an increasingly serious problem, the development of cross-industry technologies like smart grids that combine energy and ICT is inevitable. Building on its leading position in the global ICT industry, Taiwan has a great deal of potential for development in all sectors: up-, mid-, and downstream. For example, Chunghwa Telecom's "intelligent Energy Network" (iEN) services can in the future be applied to many aspects of the construction of smart grids, such as remote monitoring of meters, itemized billing, energy management platforms, and systems integration.

Looking at advanced countries in Europe and the Americas, and even mainland China, all are actively deploying smart grid infrastructure. When will Taiwan, where for a long time now the government's budget for investing in such infrastructure has been very limited, get moving? This is one area where no energy should be spared.