Definition 

A "smart grid" is a modernized, bi-directional, electricity delivery system that regulates energy consumers' usage, whether residential, commercial or industrial, by controlling appliances and other devices. The goal of a smart grid is to reduce energy consumption (and therefore demand), save money and increase reliability. Governments also promote upgrading to smart grids as a way to achieve energy independence and fight global warming.

A smart grid can include:
•A monitoring system that tracks all energy flowing through the system
•Transmission lines that reduce power loss
•Integration capability for alternative energy sources  (e.g., wind, solar)
 
Smart meters are probably the most widely known parts of a smart grid system. A smart meter is a technologically advanced meter that provides more detail about energy consumption than conventional meters. These meters are generally capable of transmitting usage information back to the providing utility for monitoring and billing purposes. Smart meter manufacturers and networking/communications providers include Trilliant, SmartSynch, Alliant and Itron, Inc., the market share top-spot holder in North America and worldwide.

Although primarily used to monitor and regulate electricity distribution and usage, smart meters are increasingly providing the same function for water and natural gas consumption.

 
Business applications

Smart grids offer energy consumers the opportunity to identify the main sources of energy consumption and quantify energy use. From this information, users can take steps to reduce consumption, saving money and energy. Based on the information obtained from items like smart meters, consumers can replace energy-inefficient items such as appliances, electronic devices, HVAC equipment and light bulbs with more efficient alternatives. Other demand-reduction steps on the supply side include controlling consumption at the appliance or systems level by incorporating measures that switch off heavy-consumption devices during peak hours so that they operate during low-demand times of the day.

Overall, smart grids put more responsibility for energy consumption in the hands of the consumer by providing feedback about specific use. Electricity providers receive information about transmission losses that enable them to eliminate wastefulness in infrastructure. The net result is energy use reduction and conservation by way of an informed, empowered consumer base and an efficient, intelligent electricity distribution system. As the U.S. Department of Energy put it in its statement regarding smart grid stimulus awards:

“Modernizing the grid will create tens of thousands of jobs, save money for consumers and businesses, and allow for the transportation of renewable energy across the nation.”Obstacles

The biggest obstacles to large-scale implementation of smart grid technology are cost of transition and lack of public awareness of benefit. Additionally, a few highly publicized glitches in billing from smart meter providers PG&E in California and CenterPoint in Texas and privacy concerns have deepened wariness, creating suspicion that such programs are simply another way to obfuscate already complex billing processes and further erode privacy.

Legacy systems present a challenge to wider adoption of smart grid tech. Existing infrastructure cannot currently accommodate the new technology and would largely need to be replaced, although a hybridized infrastructure consisting of older, viable components and smart grid tech shows promise as a way to ease the transition and constrain cost. While corporations like GE, Verizon, and Cisco all have smart grid strategies in various stages of development, transition costs, in conjunction with current economic conditions, have slowed efforts to push smart grid initiatives forward.

In addition, a lack of awareness in the public sector about smart grid benefit potential has significantly impeded growth. Research by Parks Associates indicated that over 40 percent of consumers are unfamiliar with the phrase "smart grid." It seems logical that more people, whether household or corporate consumers, would call for initiatives in their communities if the advantages of smart grid tech over traditional systems were explained in clear terms and made widely known. But, attempts to roll out time-of-use pricing and other related initiatives have been met with reactions ranging from indifference to outright hostility.

However, outreach programs and "cash for energy-guzzler" programs have been moderately successful in educating all consumers, whether in business or in the home, about the personal and global benefits of reducing consumption using this modernized system. With the U.S. Department of Energy awarding 3.4 billion dollars in smart grid stimulus grants to fund over 100 smart grid projects, Earth2Tech.com and other smart tech watchers see evidence of the mainstreaming of smart grid tech and predict a large boost in implementation nation-wide.

By John Storts