Representative smart meter of power usage & cost (flickr.com).

The term electric power grid refers to an assembly of numerous networks and multiple power generation companies with multiple operators executing varying levels of communication and coordination, which is primarily manually controlled. In contrast, smart grids increase the connectivity and automation between the suppliers, consumers and networks that perform either long distance transmission or local power distribution tasks. In general, transmission networks move electricity in large quantities over medium to long distances and generally operate from 400kV to 800kV, whereas local distribution networks transport power in one direction, carrying the bulk power to consumers and businesses via lines operating at 132kV and lower. 

This model is changing as businesses and homes begin generating more renewable energy electricity through rooftop solar panels and other means, enabling them to sell surplus energy back to their utility provider. More advanced technology is necessary for enhanced performance of power operations across the U.S. such as energy consumption efficiency, real time management of power channels, and multilateral metering required for compensating non-utility producers of power. Although transmission networks are already controlled in real time, many of these networks in the U.S. and Europe are unable to compensate for the intermittent nature of alternative electricity generation, or continental-scale bulk energy transmission power demand shifts.

"Smart grid” is a general term that includes modernization of both the transmission and distribution grids. It also focuses on facilitating greater competition between providers, enabling expanded use of variable energy sources, the automation and monitoring capabilities needed for efficient bulk transmission at continental distances, and monitoring the availability of power to drive energy conservation. 

Amidst the developments of modern information technology such as the internet, the U.S. power grid is outdated and has not been updated accordingly. As a result, most power consumers only receive energy consumption reports on their monthly statements. A smart grid would offer more detailed information through home energy-monitoring tools, which may be small electronic displays or internet-based programs that give a real-time view of energy utilization for various appliances and the property as a whole. Consumers would be able to adjust usage to reduce energy bills as desired. 

Smart grid features have been implemented regionally to consumers in the U.S. to evaluate energy efficiency performance. One critical element is a “smart meter” with two-way communications that provides more updated energy data, enabling efficiency incentives such as charging your plug-in electric vehicle in the middle of the night to received off-peak rates. The combination of a smart meter and monitoring software allows homeowners to observe how much electricity their solar panels are producing and the reduction of their carbon footprint in real time. In addition, smart grid technology facilitates energy utilities in charging variable electric rates with respect to peak or off- peak demand periods in addition to advanced appliance control systems for consumers that could be programmed to operate at the least expensive times of the day, while subsequently bolstering the field of Green construction. 

Currently, if a power failure occurs at a local substation, the utility is only notified when customers call to complain. Smart grid systems include a networked sensor inside a transformer or along wires that locate and report a problem, or even better, serve as preventative maintenance. There have been five massive power outages over the past 40 years due to grid failure, and three of these have occurred in the last nine years, as demand has increased. According to Department of Energy estimates, power outages cost the U.S. economy over $80 billion each year in damages and lost business enterprise. For example, the 2003 blackout in the Northeastern United States and Canada affected 50 million people and caused an estimated $7 billion to $10 billion in economic losses. The construction of a national smart grid will inevitably advance Green job creation, while aiding the U.S. in achieving eventual energy independence.

Government and utility funding officials associated with grid modernization have defined the functions required for smart grids. According to the DOE Modern Grid Initiative report, a modern smart grid must:

1. Self-healing from power disturbances
2. Motivate consumers to actively participate in operations of the grid
3. Operating resiliently against physical and cyber attack 
4. Provide higher quality power that will save money wasted from outages
5. Accommodate all power generation and storage options
6. Enable electricity markets to flourish
7. Optimizing assets and operating efficiently.  

A  follow-up article on current issues and developments concerning smart grid technology will be posted on my homepage later this week. In order to anonymously receive FREE email alerts on future Green technology and business articles, please subscribe on my homepage and/or follow me on Twitter.

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For more info: DOE Smart Grid site