What is the Smart Grid?

Smart Grid has become a buzz word today with estimates of over a trillion dollar of investment needed to modernize our aging electricity infrastructure over the next two decades. However, if you ask 10 people to define what a "Smart Grid" is, chances are you will get 10 different versions of what is expected of a "Smart Grid". I find this sample conversation between different participants in the smart-energy system helpful in understanding what is generally referred to as a Smart Grid. 


(Ref: The Smart Energy Network: Electric Power for the 21st Centure - by P. Mazza):

As morning gets underway, a generator tells the network, "I have X megawatts of production capacity available today at Y price". The transmission system responds, "I can carry those megawatts today at Z dollars until midafternoon when extremely hot temperatures are forecast. I expect to cut loads then to protect my lines." 


Meanwhile down at the distribution level smart appliances and equipment are projecting the day's power use to smart meters, which then report expected demands to their substations. The aggregate information indicates heavy afternoon load from air conditioners. That goes back to the transmission system, which then foresee the afternoon pinch. So the transmission agent posts an offering price for demand reductions. Distribution agents communicate the offering to the smart meters, which then confer with their appliances and equipment and report back. The distribution agents determine they can shut-down enough water heaters during high stress hours to meet transmission system's need. So they post demand reduction offers and the transmission agent accepts. Transmission lines reduce loads and comfortably ride out the afternoon. By the time people arrive home and take their after work showers, most water heaters will be back on. And everyone involved in the deal will receive a small credit on power bills. 


Through a real time conversation, the energy network has self-optimized a low-cost solution without brownouts, blackouts or costly overbuilding of transmission lines!

A critical aspect of making the grid smart is also making it more "sustainable". This means less reliance on fossil fuel based generation to reduce carbon emission, incorporation of large amount of renewable energy like wind and solar, and increasing the energy efficiency throughout the electricity supply chain by improving technology and providing financial incentives to market participants to generate, transmit and use electricity in more intelligent and sustainable ways.

Here is a cool animation on what the Smart Grid means!

And finally, here are some useful links for finding more about the smart grid.