Smart Grid 101

What is "Smart Grid"?

Smart Grid refers to the process of integrating modern technology into the existing electrical power grid to improve reliability, power quality and efficiency.  This process will enable each component of the grid the ability to "talk" and "listen" in order to improve electricity delivery from the utility companies to consumers.  The following section provides a quick overview of the current electric grid and the envisioned smart grid benefits associated with the transition. 

Existing Electric Grid

In order to realize the concept of a "smart grid" it is important first to understand the existing electric grid. The electrical grid has three main components; generation, transmission, and distribution

Generation: Electricity generation is supplied by fossil fuel power plants, nuclear power plants, and renewable energy facilities such as hydroelectric dams, solar photovoltaic systems, wind turbines, and biomass power plants. These generation facilities produce energy for immediate use by consumers.

Transmission: High voltage transmission lines (110 kV or above) transport bulk electricity to substations near population centers. 

Distribution:  High voltage electricity is stepped down to a lower distribution voltage through a substation transformer and transmitted through power lines to consumers. 

The electric infrastructure of this country has performed in this manner for nearly a century without any great technological advancements.  Currently the electric grid functions as a one way broadcast of electricity from power plant to end user without any feedback or situational awareness. 

The Smart Grid

Smart Grid refers to the integration of digital technology into the existing electrical grid, enabling two-way communication between all grid components. Overtime, this could allow the grid to:

  • Optimize assets and operate more efficiently
  • Reduce frequency and duration of outages 
  • Resist physical and cyber attack
  • Provide improved power quality
  • Accommodate renewable energy and energy storage options
  • Enable new products, services, and markets

Consumer Benefits

Enabling two-way communications between consumers and utilities creates the framework for improved energy use information.  This communication process is evolving over time much like the early days when the internet was still being tested and developed.  On the utility side, the advantages of smart grid technological improvements include full-time monitoring of systems to ensure proper operation, functionality and efficiency.  Depending on when meters become available and what programs are actually activated by the utility, the consumer benefits are expected to include: consumption monitoring, dynamic pricing, net metering, and grid reliability.

Consumption Monitoring:  View the near real time electrical consumption of your household on a digital in-home display, or utility web portal.


Dynamic Pricing:  Receive discounted electrical rates for operating certain high energy use products such as water heaters, washer, dryer, and air conditioner during off peak hours.

Net MeteringSome customers will have the ability to sell excess electricity generated from home alternative energy (i.e. solar cells, wind turbines) sources back to grid at market value. Net metering basics

Grid Reliability:  Increased ability to monitor grid conditions making it possible to anticipate and mitigate potential power integrity issues, resulting in fewer outages and power quality events.


Can the current grid be smarter?

Although the current electrical grid has served our nation well over the last century, improvements to the electricity grid infrastructure are necessary to assure power quality, provide improved electric reliability, and pave the way for the incorporation of clean renewable energy on the grid.  Improvements to the grid will reduce outages, provide better infrastructure security and increase the efficiency of power delivery.