Smart Grid

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Tyler Hamilton:

"The true vision of the smart grid is a self-healing, automated grid that can manage complex flows of electrons, from the hundreds — potentially thousands — of large and small sources of power to the millions of homes, businesses, industrial customers and, potentially, electric cars that require that energy." (

(Please note: "there are over 80 different definitions of the Smart Grid floating around." [1]


1. By the US Dept. of Energy:

"The Department of Energy breaks this down a lot further, laying out no fewer than 60 specific technologies that fall under the smart grid label (big pdf). These can be loosely grouped into six intersecting categories:

  • One set of technologies — smart meters, programmable thermostats, home automation software, etc. — allows consumers to participate in the smart grid by adjusting their electricity use automatically based on fluctuations in electricity availability or rates.
  • The most desperately needed part of the smart grid are the transmission lines and control software that tie together far-flung renewable energy sources (such as wind and solar) and energy storage devices (such as electric car batteries). Unlike the present crazy quilt system, a true smart grid will be able to move electricity from wherever its being generated to wherever its needed — potentially thousands of miles away — in real time, even parking it in storage for use later if necessary.
  • The smart grid is a communications network, moving information about grid performance, electricity demand and availability, rate information, etc. from point to point.
  • The smart grid is an application platform. Just as the internet allowed services like to spring into existence, the smart grid will allow a host of innovative energy management applications from third parties to be deployed on the network.
  • The smart grid is a set of monitors and automated control mechanisms that respond quickly to service interruptions — whether from natural disasters or purposeful attack — in a self-healing manner."



"There are several features of the Smart Grid that are key to its operation and “smartness.”

  • Smart Meters – These are solid-state, communicate with the utility through radio, and send usage data regularly. Through these meters, the utility can also receive power outage notifications, maintenance requests, and other alerts.
  • Renewable Power Generators - Most people are familiar with these: photovoltaics (solar panels), windmills, fuel cells. The difference is that consumer-provided generators will become an active part of the grid and the utility system as a whole. The solar panel on your roof will eventually generate power for your neighbors.
  • Smart Appliances - One of the basic tennents of the Smart Grid is that consumers will be able to actively manage when they use electricity in direct response to varying costs. In other words, electricity at night will be cheaper than during the day, and consumers will be aware of this and can make educated choices about when they use their power. Appliances will be able to monitor power costs and program themselves to run when power is cheaper. If they have batteries to store power, such as electric cars, then they can actually draw power when it is the cheapest and feed the grid when demand is high.
  • Utility Data Management – With all the information utilities will be receiving from their new meters, they will be better prepared to respond to peak usage times and discover problems before they occur. The system can only produce what power can be used at any given time. Without large banks (or buildings full) of batteries, there is no way to store power that is generated and not used. Surprisingly, at some points in time, too much power is being generated and must essentially be thrown away. With better data, and more consumer generators and storage devices, the utility will have to generate less power, and can store the excess when it is not needed."


3. See also:



Jesse Berst, managing director of Global Smart Energy:

"the smart grid has three parts: smart devices, two-way communication (which makes those devices smart, and pulls and pushes the telemetry data they collect) and advanced control systems and applications (which provide the controls to act on the energy demand data that the smart devices provide). But making those three parts work together is where the real work of establishing the smart grid will come into play." (


From Cisco's Connected Urban Development project:

"The main principles of a Smart Grid include:

  • Demand Management: Reducing electricity consumption in homes, offices, and factories.

Demand Management includes:

- Demand Response: During emergency periods of peak energy usage, utility companies send electronic messages to alert consumers about reducing their energy consumption by turning off (or turning down) unessential appliances.

- Smart Meters and Variable Pricing: In many areas, electricity prices rise and fall based on demand at that moment. "Smart meters" let consumers shift energy consumption from high-priced periods to low-priced periods (load shifting and shedding).

- Smart Buildings with Smart Appliances: Traditional, stand-alone building control systems are now converging onto a common ICT infrastructure that allows appliances (heating, ventilation, air conditioning, lighting, and so forth) to "talk" to each other, coordinating their actions and reducing waste.

- Energy Dashboards: Online energy dashboards provide real-time visibility into energy usage while suggesting ways to reduce consumption.

  • Distributed Energy Generation: Encouraging homes and businesses to install their own renewable energy sources.

Distributed Energy Generation includes:

- "Microgeneration": Some homes and offices generate their own electricity locally using small equipment (wind generators, photovoltaics, fossil-fuel generators with heat reclamation). Many of these devices are now as affordable as energy from utilities, and produce 50 percent less greenhouse gases.

- Storage and Hybrid Electric Vehicles: Owners of plug-in hybrid electric vehicles (PHEVs) can buy energy when it is inexpensive, store it in batteries, and sell it back to the grid when the price goes up. PHEV drivers hope to arbitrage the cost of power, while utilities see fleets of PHEVs supplying power to reduce peaks in demand.

  • Supply-side Efficiency: Using IT to improve control of the electric distribution grid.

Supply-side Efficiency includes:

- Grid Monitoring and Control: Utilities are installing sensors to monitor and control the grid in near real time to detect faults earlier and provide time to prevent blackouts.

- Grid Security and Surveillance: Utilities are installing surveillance sensors to monitor and secure unmanned, remote equipment that is vulnerable to terrorism." (


"* “Enables active participation by consumers.

  • Accommodates all generation and storage options.
  • Enables new products, services, and markets.
  • Provides power quality for the digital economy.
  • Optimizes assets and operates more efficiently.
  • Anticipates and responds to system disturbances (self-heals).
  • Operates resiliently against attack and natural disaster.”



Why We Need a Smart Grid

Explanation at

Smart Grids are Resilient

James Cascio:

"Resilient flexibility means avoiding situations where components of a 
system are "too big to fail"--that is, where the failure of a single 
part can bring the whole thing crashing down. The alternative comes 
from the combination of diversity (lots of different parts), 
collaboration (able to work together), and decentralization (organized 
from the bottom-up). The result is a system that can more effectively 
respond to rapid changes in conditions, and including the unexpected 
loss of components.

A good comparison of the two models can be seen in the contrast 
between the current electricity grid (centralized, with limited diversity) 
and the "smart grid" model being debated (decentralized and highly 
diverse). Today's power grid is brittle, and the combination of a few 
local failures can make large sections collapse; a smart grid has a 
wide variety of inputs, from wind farms to home solar to biofuel 
generators, and its network is designed to handle the churn of local 
power sources turning on and shutting off.
" (

Bill St. Arnaud on Three Generation of Smart Grids

"A good example is smart grids with the first generation of smart meters. The major beneficiary of this technology is NOT the consumer, NOR the environment - but only the utility. Smart grids help the utility to better manage peak load and thereby reduce the need to build more power plants. It does not reduce overall power demand or GHG emissions - it only displaces them to different periods of the day.

The second generation of smart grids will allow consumers to monitor energy consumption in real time and thereby reduce their energy bill. There is a small number of studies that indicate there may be a positive effect here. But it is too early to tell if this effect will be enduring or simply an artifact of a committed study group. Nevertheless smart grids of any generation do NOT reduce GHG emissions in any meaningful way.

Rather than building an expensive SMART grid, we are much better off with the inefficient STUPID grid we have today. With a stupid grid, and structural separation of energy supply and infrastructure consumers would be able to purchase renewable or nuclear power independent of their network operator. This is possible in Canada, most of Europe and some US states.

Providing incentives for consumers to purchase renewable power (and waste as much energy as they want) will be much more effective in reducing GHG emissions than deploying incredibly expensive smart grids which will only result in marginal gains.

I think "third generation" smart grid, independent of the utilities, will play a critical role in reducing GHG emission.

But the current generation of smart grids and smart meters serve only to benefit the utilities and will have minimal impact on GHG emissions. Reducing GHG emission is the real issue - not energy conservation or efficiency. Even the next second generation of smart meters and grids will largely only benefit the utilities and not have a measurable impact on GHG reduction.

In terms of impact, a much better investment in the short term, than smart grids in reducing GHG emission would be:

(a) to build higher capacity transmission lines so that we can bring renewable energy to consumers who want it;

(b) structurally separate ownership of transmission facilities from power producers;

(c) introduce concept of network neutrality to electrical transmission systems (which today's smart grid technology much like "intelligent" networks will inhibit); and

(d) introduce carbon taxes ( or better still carbon credits) to encourage consumers to use renewable energy and adopt energy reduction strategies, and there by demand smart meters to monitor their usage ( the cart following the horse)

In terms of smart grids it is essential, in my opinion that we build a smart grid architecture independent of the utilities. The utilities and electrical distribution companies are the enemy for any strategy in reducing GHG emissions. They are married to their dirty coal plants and antiquated network architectures for transmission lines.

What would a third generation smart grid look like? Here is one possible scenario:

The biggest challenge for renewable power companies is establishing direct relations with their customers. Renewable power sources must sell their power to utilities and distribution companies who then bundle their power with more traditional sources to deliver to consumers. In some cases consumers or businesses can pay a premium and buy REPs - renewable energy credits, whose price is supposed to reflect the bundling of new renewable power. And in jurisdictions where there is structural separation they can buy energy directly from ESCOs (energy service companies), some of whom specialize in delivery of green power.

The challenge for renewable power companies is linking their production to consumption. Most renewable power is unpredictable in terms of its supply (wind, solar) and so deployment of renewable power has not eliminated the need for traditional coal plants who must stay on line in case of disruption in the renewable source.

With a third generation smart meter/grid, the renewable power companies would have a direct Internet connection to their customer's power meter, independent of the utility. Such meters already exist. The customer's meter may be "multi-homed" to several different power suppliers such that the customer can switch energy suppliers automatically based on price and availability of power. This will much more effective in reducing GHG than demand displacement systems mart grids that are being advocated today. The tricky part will be negotiating a settlement system between the various power operators and the owner of the transmission lines." (arch-econ mailing list, October 2008)