Smart Grids: Everything You Need to Know

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The introduction of smart grid technology has caused a fundamental re-engineering of the electricity services industry. This article takes a look at 1) what are smart grids & why do we need them, 2) features and benefits, 3) chief technologies used, 4) security and other concerns, 4) a few of the top smart grid companies, and 5) some key research programs.


Smart grids are electricity networks founded on digital technology that is utilized to deliver electricity to consumers by means of two-way digital communication. The whole smart grid system is automated for monitoring electricity usage at all the locations. This system enables monitoring, control, and communication, and analysis within the supply chain to assist with curbing energy use and expenses, improving efficiency and maximizing reliability and transparency of the energy supply chain. Thus, the need for future electrical systems or smart grids can be traced to four drivers:

  1. Efficiency: This is about improving the efficiency of power generation and decreasing losses in consumption, transmission and distribution of electrical energy.
  2. Reliability: This means delivering quality electrical energy whenever required.
  3. Capacity: This means fulfilling the increasing worldwide demand for electrical energy.
  4. Sustainability: It has to do with ensuring the effective incorporation of renewable power generation.

The smart grid was brought in with the objective of overcoming the shortcomings of traditional electrical grids by utilizing smart net meters. A lot of government institutions worldwide have been encouraging smart grid utilization for their latent ability to control and cope with global warming, energy independence scenarios, and emergency resilience. The smart networks are equally beneficial for retail stores, enterprises, hospitals, multinational corporations, and universities.


The Smart Grid is associated with many features and benefits.

  • Demand response support: This gives users an automated way to decrease their electricity bills by directing them on how to utilize low-priority electronic devices when prices are lower.
  • Load handling: The total or sum of the power grid load is not steady, and it changes over time. In situations of heavy load, a smart grid system can counsel consumers to temporarily reduce energy consumption.
  • Decentralization of power generation: A decentralized or distributed grid system enables the individual user to produce onsite power by utilizing any suitable method available to him / her.
  • Quicker reinstatement of electricity following power disturbances, more efficient electricity transmission and increased incorporation of large-scale renewable energy systems are all benefits of Smart Grid.
  • Reduced management and operations expenses for utilities and finally lower power expenses for consumers, decreased peak demand that would assist with reducing electricity rates, and better incorporation of customer-owned power generation systems are also some noted benefits.
  • Smart Grid can spot power theft and equipment failures: Some “smart grid” networks have dual functions. This incorporates advanced metering infrastructure systems which, when combined with different software can be utilized to recognize power theft and by way of elimination, identify where equipment failures have occurred. These are in addition to their key functions of measuring the time-of-use of electricity and doing away with the requirement for human meter reading.

Currently, an electricity disruption like a blackout, can result in a domino effect – a sequence of failures that can impact banking, traffic, security, and communications. This is a specific cause for concern in winter, when homeowners may be left without heat. A smarter grid would contribute resiliency to our electrical power system and ensure it is better prepared to tackle emergencies such as earthquakes, severe storms, terrorist attacks and huge solar flares. Owing to its two-way interactive ability, the smart grid would enable automatic rerouting whenever outages or equipment failures occur. This would help to lessen outages and limit the effects when they do occur.

Should there be a power outage, smart grid technologies would identify and isolate the outages, restraining them before they take the shape of large-scale blackouts. The new technologies would also assist with ensuring that electricity recovery starts quickly and strategically following an emergency- routing electricity quickly. What’s more, the smart grid would take better advantage of customer-owned power generators to create power when it is not available from utilities. The combination of these “distributed energy resources” would help a community ensure operation of its police department, health center, phone system, grocery store and traffic lights during emergencies.


Integrated communication

These technologies enable smart electronic devices and users to interface as an integrated system. This incorporates two-way, fully integrated, high-speed technologies that would make power exchange and real-time information possible. This would help optimize asset utilization, system reliability and security. An open architecture would produce a plug-and-play environment that would enable grid components to listen, talk and interact. Some examples of individual technologies in this area are: WiFi, one cycle control controller, advanced on-load tap-charger and advanced protective relays.

Advanced control methods

This category incorporates technologies that can monitor power system components facilitating rapid diagnosis and reaction to any event. Three technology categories in this category are analytical tools (high-speed computers and software algorithms), distributed intelligent agents (control systems) and operational applications (such as SCADA, demand response, and substation automation). By way of artificial intelligence programming methods, the Fujian power grid in China developed a wide area protection system that is quickly able to precisely calculate a control strategy and implement it. The Voltage Stability Monitoring & Control (VSMC) software utilizes a sensitivity-based successive linear programming technique to find out reliably the optimal control solution.

Advanced components

These technologies play an active role in finding out the grid’s behavior. The foundation for these technologies is R&D in these areas: superconductivity, power electronics, chemistry, materials, and microelectronics. The next generation of devices would put the latest research in superconductivity, materials, microelectronics, power electronics, and energy storage into practice. This would create enhanced real-time diagnostics, more reliability, and higher power densities. Technologies in this category include:

  • cables, transformers, advanced or smart switches
  • micro grids – these are local electricity grids that can function independently of the main electricity grid whenever necessary
  • “smart,” grid-friendly appliances such as air conditioners, clothes dryers, and washers, and hot water heaters that have the capacity to hold up operations in response to price signals

Sensing and measuring

These technologies will improve power system measurements and identify and react to problems. They assess the health of equipment and grid integrity and support advanced protective relaying. They prevent energy theft and do away with meter estimations. They facilitate consumer selection and demand response and assist with alleviating congestion. Technologies that fall into this category include wide-area monitoring systems, advanced microprocessor meters (smart meter), advanced cables and switches, electromagnetic signature analysis/measurement, dynamic line rating, time-of-use and real-time pricing tools, digital protective relays and backscatter radio technology.

Enhanced interfaces and decision support

There are many situations where the time operators have to make decisions, has come down to seconds. As a result, the modern grid would call for seamless, real-time, wide utilization of tools and applications that allow grid operators and managers to quickly make decisions. Decision support with better interfaces will augment human decision making at all grid levels. Some examples of technologies in this category are: real-time digital simulators to evaluate and test electricity systems and software tools to examine the health of the electricity system.


With the arrival of cybercrime, there are also worries about the security of the infrastructure, chiefly that entailing communications technology. The concerns mainly revolve around the communications technology at the center of the smart grid. Meant to enable real-time contact between meters and utilities in businesses and customers’ homes, there is a danger that these capabilities could be taken advantage of for criminal or even terrorist applications. One of the connectivity’s key abilities is that of remotely turning off power supplies, allowing utilities to easily and quickly modify or cease supplies to customers who default on payment. This is unquestionably a great benefit for energy providers but at the same time is cause for some security concerns. Cybercriminals have on numerous occasions before, successfully gained access to the U.S. electric grid. Apart from computer infiltration, another worry is that computer malware such as Stuxnet, which targeted SCADA systems extensively utilized in the industry could be leveraged to attack a smart grid network.

Theft of electricity is a cause of worry in the U.S. where the smart meters employed utilize the RF technology of Fastrak responders to interact with the electricity transmission network. People knowledgeable in electronics can create interference devices that make the smart meter report less than the real usage. In the same way, the same technology may be utilized to make it seem that the energy the consumer is utilizing is being utilized by another customer, therefore resulting in an increased bill amount.

Other points of concern and/or opposition include:

  • Worry that complex rate systems (such as variable rates) do away with accountability and clarity, enabling the supplier to take advantage of the customer
  • Concerns over providing the government mechanisms control over the use of all power utilizing activities
  • Social concerns associated with Enron style misuse of information leverage
  • Social concerns associated with “fair” availability of electricity

Some characteristics of smart grids have created opposition from industries that are hoping to or presently already deliver similar services. One example is competition with DSL and cable internet providers. Those who provide SCADA control systems for grids have purposely designed proprietary hardware, software, and protocols so that they are not able to inter-operate with other systems so as to link its customers to the vendor.



This is a $31 billion company that entered the smart grid party late. However, the company did make up for lost time with a number of key gains and strategic modifications to the ABB smart grid plan. The company’s smart grid ambitions are to offer the complete range of smart grid-associated software and gear. One aspect of ABB”s smart grid plan is to become a leader in blending operational technology (OT) with information technology (IT). The company made significant strides in that direction with the acquisition of Ventyx in 2010 and the acquisition of Mincom in 2011.

The parent company delivers power and automation technologies to a wide base of industrial and utility customers. Its product lines cover distribution, transmission, industrial automation and turnkey substations. The company created more 50% of its sales in Europe and has had early triumph in China.


The company provides wireless communications and smart meters, in addition to meter data management software. Itron’s smart grid portfolio also incorporates project management, outsourcing, and consulting. The company’s smart grid software and equipment are installed at hundreds of utilities in Europe and the U.S. Headquartered close to Spokane, WA, the company had profits of $2.26 billion in 2010.


Although this company’s entry into the smart grid bandwagon came later than that of GE and ABB, Siemens has since revealed its smart grid goals to become a major force in the sector. One of the world’s biggest industrial engineering and electronics firms in the world, the company’s smart grid portfolio incorporates switches and protection gear, solar and wind power products, and substation automation. The company’s smart grid footprint runs the gamut from the production, distribution and transmission of electric power. In the U.S., the company’s headquarters is in Washington D.C.



Developed by the Electric Power Research Institute (EPRI), IntelliGrid architecture delivers methodology, recommendations and tools for technologies and standards for utility utilization in planning, specifying and acquiring IT-based systems such as distribution automation, demand response and advanced metering. The architecture also makes available a living laboratory for evaluating devices, technology, and systems. A number of utilities including Long island Power Authority, TXU Electric Delivery, Southern California Edison and Salt River Project have applied IntelliGrid architecture. The IntelliGrid Consortium is a PPP (public/private partnership) that incorporates and optimizes international research endeavors, labors to integrate technologies, funds technology R&D and distributes technical information.


It is a DOE OE program concentrating on creating information technology to revamp the U.S. electrical grid. In collaboration with the GridWise Alliance, the plan invests in simulation and analysis tools, communications architecture and standards, test beds and demonstration projects, smart technologies, and new regulatory, market and institutional frameworks. The GridWise Alliance is a confederation of private and public electricity sector stakeholders, presenting a forum for cooperative efforts, idea exchanges and meetings with policy makers at state and federal levels.

Grid 2030

It is a joint vision statement for the U.S. electrical system created by equipment manufacturers, the electric utility industry, information technology providers, interest groups, national laboratories, universities and state and federal government agencies. It incorporates transmission, generation, storage, end-use and distribution. The National Electric Delivery Technologies Roadmap is the execution document for the Grid 2030 vision. The Roadmap sketches the main challenges and issues associated with modernizing the grid and suggests paths of action that government and industry can adopt to develop America’s future electric delivery system.

GridWise Architecture Council (GWAC)

It was brought into being by the U.S. Department of Energy to promote and facilitate interoperability among the multiple entities that communicate with the nation’s electric power system. The GWAC members are a respected and balanced team representing the various constituencies of the electricity supply chain and users. The GWAC makes available tools and industry guidance to make clear the goal of interoperability across the electric system, recognize the architectures and concepts required to make interoperability possible, and come up with actionable steps to enable the interoperation of institutions, systems and devices that incorporate the nation’s electric system. The GWAC Interoperability Context Setting Framework, V 1.1 delineates essential principles and guidelines.

Smart Grids can be considered to be the future of electricity and very welcome development no doubt.

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