What Is the Smart Grid?

What Is the Smart Grid?

There are thousands of reported power outages each year. One study noted that there were over 2,800 outages nationwide that affected 25 million people in 2012. The largest cause of these interruptions is severe weather and falling trees, but hundreds of incidents are caused by human error, faulty equipment, and unknown circumstances. The U.S. Department of Energy estimates that weather-related outages alone cost our economy an inflation-adjusted average of $18 billion to $33 billion annually.

What can be done to make the delivery of electricity more reliable and resilient in the event of a disturbance? The answer is the implementation of smart grid technology.

The electrical grid is undergoing a critical period of modernization in this country that will create a more sustainable system for delivering power to households and industry.

The catastrophic Northeast blackout in 2003 that left 55 million people without power in Canada and the United States started with an overload of transmission lines in Ohio that came in contact with overgrown trees. The resulting cascading failure could have been managed locally or avoided altogether with transmission equipment and systems available today that could recognize this kind of overload, isolate the problem, and adapt to maintain power delivery.

Since that event, there has been increased regulatory pressure to prevent significant outages. Power utilities are responding, spending $4.3 billion on smart grid improvements in 2012 alone. However, there is a long way to go. The average power plant is over 30 years old, and 70% of transmission lines and power transformers are over 25 years old. The age of the grid’s infrastructure not only makes it susceptible to increased weather-related outages; it also accounts for a significant loss in efficiency. Nearly 7% of electricity generated by power plants is lost during transmission.

In the course of our work helping utility companies deploy Advanced Metering Infrastructure (AMI), we have seen the significant benefits this technology offers. A major component of AMI is the “smart meter,” which not only allows utilities to automatically receive usage information but also the ability to manage outages, monitor power quality, and offer time-based pricing.

The modernization of the grid goes beyond the smart meter. Distribution and substation automation will improve fault detection and provide recovery and reconstitution capabilities. Reclosers and automated feeder switches instantly reroute power when a fault occurs, restoring power in seconds rather than hours. And with more capacity available from distributed generation sources (e.g. on-site solar panels or wind turbines) and backup power from older, coal-powered plants becoming more expensive, electric utilities can use the smart grid to analyze demand and determine how to efficiently and reliably deliver power and cost savings to consumers.

According to the Smart Grid Consumer Collaborative, improvements to the electric grid have the potential to increase the efficiency of today’s system by around 9% in less than 20 years and save more than 400 billion kilowatt-hours each year. On a local level, smart grid modernization could yield savings of nearly $600 for the average household annually.

As our lives become more dependent on technology, customer demand for increased capacity and the reliable delivery of energy requires utilities and operators to invest in the next generation of smart grid technology.


Senior Client Manager
Government & Institutional

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