What is a Smart Grid and How Smart is Our Current Grid?

By April 7, 2019Green Energy

These days it seems like everything has a ‘smart’ version: you can control your smart lights and your smart thermostat from your smartphone. Then you can hop into your electric vehicle, charged with a smart charger, back up using a smart assist drive and head to the store where smart checkout options may exist. While each of these iterations of smart devices allow for more control, automation, and benefits to users, they are typical modular and limited in scope. However, the most important aspect of our daily lives that’s moving in the ‘smart’ direction is one that you may not give much thought to at all: the electric grid.

The concept of a smart grid has been around as an idea as far back as the 1990s, but in many ways we’re only really just now tapping into the smart grid and realizing the massive implications and potential use cases such a smart grid can bring. So, to the layperson who hears these buzzwords but doesn’t necessary note a difference in their interaction with their utilities, this begs the question—what, exactly, is a smart grid, and is our grid even close to being truly smart?

Defining the smart grid

First things first, when talking about the grid people are referring to the network of transmission & distribution lines, power generation stations, transformers, and all other aspects of the electricity delivery system that takes electricity from its source to its end up in homes and businesses. The original infrastructure for the grid was built started in the 1890s in the age of Thomas Edison and Nikola Tesla, with it being built more widely and more advanced as time advanced.

While an engineering marvel for the times in which much of the grid was built, with the modern version reaching hundreds of thousands of transmission lines, many parts of the modern grid have been built out piecemeal from these original efforts. A grid for today and tomorrow needs to be rebuilt and updated to match our modern needs, and that is where smart grid efforts come in.

When discussing a smart grid, the definitive aspects is the ability for two-way communication between the utility and its customers. For decades, the only source of data would be meters outside buildings that could be read to display the amount of electricity used, but utilities had no way to actively communicate in real-time with customers. Such limitations meant that the ability to build in automatic controls or allow responses on the customer end was difficult or impossible.  Smart meters, however, are being installed across the power system that allow customers to see how much electricity they’re using, when they use it, and its associated cost—all in live time. A system built up as a smart grid has sensors all along the process, can allow utilities to communicate with its customers (through price signals or information sharing) in an attempt to minimize or shift the level of demand during peak hours, and creates a much more efficient system, overall. Additionally, utilities can see and address problem areas in the transmission and distribution system (such as outages) in quicker order and utilize data to improve and optimize all aspects of the electricity generation and delivery process.

Smart Grid Potential Today

According to analysis from the U.S. Department of Energy, the adoption of smart grid technologies is “accelerating but at varying rates depending largely on decision-making at utility, state, and local levels.” Despite the transformative nature of a smart grid, institutional barriers and system-wide inertia (given the existing grid, as mentioned, is over a century old) have prevented a rapid and wide-spread deployment of smart grid technologies. While worldwide spending on the smart grid market is, indeed, growing quickly and expected to reach $189 billion in North America alone by 2020 (up from just $21 billion in 2013), and smart meter installations doubled from 2010 to 2016, the installation of smart meters (just one of the technologies that enable a whole system smart grid) still lagged behind as a tiny portion of total residential customers:


Source: EIA

Thanks to the parts of the grid that are already smart today, advantages gained include the increased efficiency of electricity transmission, reduced need to build out expensive new generation sources in lieu of demand shifting, improved opportunity to integrate renewable energy generation sources that are inherently intermittent (whether utility-scale or customer-owned) through minute-by-minute readings of supply and demand, quicker restoration of power delivery during outages and issues, and much more. These advantages not only benefit utilities through increased efficiency of operations, but those benefits are often passed along to customers through lower costs and increased reliability of energy delivery.

Smart grid of tomorrow

Many of the most exciting aspects of the smart grid are really only being tapped into today. For example, one area that’s only really being tested and implemented on a small-scale today but will allow great integration in the smart grid of tomorrow is the use of smart home devices that interact with the smart grid. While people are slowly getting used to the idea of smart lights they can control with an app or a programmable thermostat that can be adjusted remotely, utilities have begun looking ahead to programs that would enable smart home systems to respond to the two-way communication systems of a smart grid. In this type of program, for example, a utility can send price signals to a customer’s home to say that demand is about to exceed supply and their resources are strained. Where previously this scenario might have led to rolling blackouts or other undesirable outcomes, smart home products in a customer’s homes might receive the information that the supply is strained so the utility is temporarily adjusting up the price of power and can take that signal as a sign to dim certain superfluous lights or turn the air conditioner down a degree or two. While these responses would have a minimal effect on a signal customer, the aggregate impact of many customers adjusting in this way could be enough to improve overall grid reliability and prevent a utility from needing to pursue alternative, inefficient, and expensive solutions like building new power plants.

Going into the future, as smart communication aspects are continually built into new and upgraded parts of the grid, the reliability advantages of a smart grid will really become apparent. During power outages during emergencies or other significant grid events, the communication systems built into a smart grid system will not only be able to identify these issues immediately to allow the power providers to work on a resolution as soon as possible, but the smart grid will also be able to isolate the affected parts of the grid and bypass them automatically. Where typical outages often have a cascading domino effect on a larger portion of the grid, a smart grid will be able to automatically reroute electricity to the most critical parts of the grid (emergency services, vulnerable areas like hospitals, or critical applications like traffic lights), while also more readily integrating customer-owned generation sources into those emergency systems. These aspects of the smart grid of tomorrow will be a critical part of the national security discussion moving forward.

The utility industry has only just begun to realize the potential of smart grid and how such technologies can be implemented. The term smart grid is quickly shifting from futuristic buzz word to actively implemented energy strategy, bringing with it benefits to customers and utilities alike.

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