A smart grid enables more intelligence (in the form of computing and telecommunications) to be embedded into the power grid.

The benefits of a smart grid

Smart grids offer better control and monitoring capabilities over the power grid and helps to integrate renewable energy, improves reliability, drives operational efficiencies, enhances grid planning, enables electric vehicles, optimizes the grid while using energy storage, and maximizes overall benefits.

Integrates renewable energy

Intermittency and unpredictability are common integration issues of renewable distributed energy resources. A smart grid smooths the net output of the system to provide a consistent and stable source of energy to the larger grid. Smart grids can be designed to store excess energy when renewable energy production exceeds local demand. Wind and solar smoothing is a specific mode where smart grids with wind or solar generation can moderate the fluctuations in power generation. Wind and solar energy vary from changes in wind speed or changes in cloud coverage. Smart grids are able to absorb sudden spikes or complement sudden dips in power so that their loads maintain their consistent power.

Improves reliability

In the case of a grid outage, a smart grid is able to provide energy to its connected loads. Storm preparation is another form of system reliability provided by a smart grid. If there is inclement weather forecasted, smart grids can begin refilling their backup energy storage. In the case of any grid outages, the smart grid will be able to run as long as possible. Smart grids provide their system with consistent energy, whether that system is a building, community, or entire feeder. The benefits from a smart grid can be applied to all grid sizes.

Drive operational efficiencies

Smart grids are able to improve grid operations by providing voltage or frequency support, power factor improvement, peak shaving or time shifting. Distributed energy resources in the smart grid are specifically controlled and operated to realize some desired benefit. Smart grids can precisely adjust their real and reactive power production to improve power quality. Smart grids can use islanding mode to effectively remove active loads from the distribution system for congestion relief or peak shaving.

Enhances grid planning

Smart grid operations allow for the delay of infrastructure and capacity investments. Utilities can get more value out of their existing distribution equipment by strategically using their equipment at higher operating limits or for longer durations because of the additional energy support provided from a smart grid. This defers immediate capacity and infrastructure costs. Advanced metering also allows for improved forecasting capabilities. The system can predict loading trends and optimize the energy within the smart grid accordingly.

Enables electric vehicles

With increasing renewable energy penetration, there is often too much energy, such as wind energy at night or solar energy in the middle of the day. The necessity to store this energy arises due to the costs of offloading the excess energy. Smart grids  support the business case for electric vehicles, which can be managed at a fleet level. 

Optimizes the grid for energy storage

The principle of time shifting is to store energy at cheaper times during the day and to discharge the energy during more expensive periods. Aside from cost optimization, other strategies can be applied such as carbon-minimization by storing excess renewable energy. Energy storage can play a role in the other benefits mentioned, such as voltage or frequency support, power factor improvement, and wind and solar smoothing. 

Maximizes overall benefits

Smart grids allow for multiple types of distributed energy resources and assets to operate together. Excess solar or wind energy can be used to charge an electric vehicle or battery. Heat from a bank of batteries can be recycled by a heat recovery system. The combination of various technologies can be managed using a smart grid, yielding more benefits than their individual usage.

Increases grid responsiveness

Smart grid monitoring tools make energy technologies more responsive to ever-changing grid dynamics in real-time, making the overall energy system more adaptive.

Components of a Smart Grid

The components of a smart grid include advanced metering, distribution automation, analytics, demand responses, and control systems.

Advanced Metering

Metering allows for power measurements, which can inform load forecasting; faster power outage restorations due to more precise fault localization; and enables solar power through net metering business cases.

Distribution Automation

Monitor and control the grid through new smart devices that can self-heal the grid during outages (i.e. perform automatic switching to restore service).


Load new data from meters and sensors into big data platforms to improve operations & planning. Platforms can perform optimizations and issue commands to dispatchable assets based on desired functionality.

Demand Response

Instead of generation following demand, enable an optimal grid that manages both in real-time. The additional visibility on grid generation and demand enables the ability to balance supply and demand with lower cost options such as a demand response program rather than activating additional generation.

Control Systems

Perform advanced computing to monitor and control the system and optimize the grid. DERs such as batteries can be directed to contribute real or reactive energy to balance the power quality of the grid. The advanced monitoring and controls allow for smart grids to perform specific operational modes, yielding the quantifiable benefits previously mentioned.

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