UK smart grid could create jobs, help economy-report

* UK economy could get 13 billion pound boost

* Smart grid could create 10,000 new jobs

LONDON, April 24 (Reuters) - Britain could pump 13 billion pounds ($21 billion) into its economy and create up to 10,000 jobs by upgrading its power distribution network with smart grid technologies, an Ernst & Young report said on Tuesday.

Smart grid proponents say the technology has the potential to transform the way electricity is generated, distributed and consumed just as the internet transformed the way the world communicates.

The idea is create a vast communication network to maximise efficiency in supply and demand and to cut costs for homes and businesses - even for those opting for low-carbon technologies, such as electric cars or solar power.

While a transition to smart grids will require incremental investments of 23 billion pounds up to 2050, a business as usual approach using conventional technology will cost 42 billion, Bill Easton, utilities director at Ernst & Young said.

"In addition to the direct economic benefits, we can also expect to see wider economic benefits to the UK, providing a welcome boost to growth, jobs and exports," Easton said in a statement.

"These could include close to 10,000 new jobs and exports in excess of 5 billion (pounds)," he said, adding "overall, the report paints a compelling case in favour of smart grids."

But the report identifies challenges such as whether current or proposed government-backed schemes will deliver results, and that the adoption of smart grid technologies is likely to be slow, with little investment before 2023.

The government has made plans for every household and business fitted with a smart meter, a system to allow them to monitor their energy demand, by 2019. This target requires the replacement of some 53 million gas and electricity meters.

Ernest & Young completed the report on behalf of SmartGrid GB, an industry body made up of energy suppliers, technology companies, consumer groups and network operators.

Some of its members include British Telecom, Cable & Wireless, General Electric, IBM, Scottish Power, Siemens and Toshiba. The UK government, energy regulator Ofgem and Consumer Focus are observer members.

Robert McNamara, manager of SmartGrid GB, said the UK cannot afford to take a 'wait-and-see' approach if it wants to be a world leader in smart grid technology, as China, the United States and others are also developing similar systems.

"Failure to deploy a smart grid will hamper development of clean tech industries and push up domestic electric costs," he said.