A smart grid delivers electricity from suppliers to consumers using digital technology to save

energy, reduce cost and increase reliability and transparency. Such a modernized electricity
network is being promoted by many governments as a way of addressing energy independence,
global warming and emergency resilience issues.

As with any heavily promoted initiative, many similar proposals have many similar names,
including at least smart electric grid, smart power grid, intelligent grid (or intelligrid),
FutureGrid, and the more modern intergrid and intragrid.

[edit] Deployments and deployment attempts

One of the first attempted deployments of "smart grid" technologies in the United States caused a
firestorm of criticism and was recently rejected by electricity regulators in the Commonwealth of
Massachusetts, a US state.[1] According to an article in the Boston Globe, Northeast Utilities'
Western Massachusetts Electric Co. subsidiary actually attempted to create a "smart grid"
program using public subsidies that would switch low income customers from post-pay to pre-
pay billing (using "smart cards") in addition to special hiked "premium" rates for electricity used
above a predetermined amount.[1] This plan was rejected by regulators as it "eroded important
protections for low-income customers against shutoffs".[1] According to the Boston Globe, the
plan "unfairly targeted low-income customers and circumvented Massachusetts laws meant to
help struggling consumers keep the lights on".[1] A spokesman for an environmental group
supportive of smart grid plans and Western Massachusetts' Electric's aforementioned "smart
grid" plan, in particular, stated "If used properly, smart grid technology has a lot of potential for
reducing peak demand, which would allow us to shut down some of the oldest, dirtiest power
plants... It’s a tool."[1]

[edit] Goals
In principle, the smart grid is a simple upgrade of 20th century power grids which generally
"broadcast" power from a few central power generators to a large number of users, to instead be
capable of routing power in more optimal ways to respond to a very wide range of conditions.

[edit] Respond to many conditions in supply and demand

The conditions to which a smart grid, broadly stated, could respond, occur anywhere in the
power generation, distribution and demand chain. Events may occur generally in the
environment (clouds blocking the sun and reducing the amount of solar power, a very hot day),
commercially in the power supply market (prices to meet a high peak demand exceeding one
dollar per kilowatt-hour), locally on the distribution grid (MV transformer failure requiring a
temporary shutdown of one distribution line) or in the home (someone leaving for work, putting
various devices into hibernation, data ceasing to flow to an IPTV), which motivate a change to
power flow.
Latency of the data flow is a major concern, with some early smart meter architectures allowing
actually as long as 24 hours delay in receiving the data, preventing any possible reaction by
either supplying or demanding devices.[2]

[edit] Provision megabits, control power with kilobits, sell the rest

The amount of data required to perform monitoring and switching is very small compared with
that already reaching even remote homes to support voice, security, Internet and TV services.
Many smart grid bandwidth upgrades are paid for by over-provisioning to support also consumer
services, and subsidizing the communications with energy-related services or subsidizing the
energy-related services with communications. This is particularly true where governments run
both sets of services as a public monopoly, e.g. in India. Because power and communications
companies are generally separate commercial enterprises in North America and Europe, it has
required considerable government and large-vendor effort to encourage various enterprises to
cooperate. Some, like Cisco, see opportunity in providing devices to consumers very similar to
those they have long been providing to industry.[3] Others , such as Silver Spring Networks[4] or
Google [5][6], are data integrators rather than vendors of equipment. While the AC power control
standards suggest powerline networking would be the primary means of communication among
smart grid and home devices, the bits may not reach the home via BPL initially but by fixed
wireless. This may be only an interim solution however as separate power and data connections
simply defeats full control.

[edit] Scale and scope

Europe's SuperSmart Grid, as well as earlier proposals (such as Al Gore's continental Unified
Smart Grid) make semantic distinctions between local and national grids that sometimes conflict.
Papers [7] by Battaglini et al. associate the term "smart grid" with local clusters (page 6), whereas
the intelligent interconnecting backbone provides an additional layer of coordination above the
local smart grids. Media use in both Europe and the US however tends to conflict national and
local.

Regardless of terminology used, smart grid projects always intend to allow the continental and
national interconnection backbones fail without causing local smart grids to fail. They would
have to be able to function independently and ration whatever power is available to critical
needs.

[edit] Municipal grid

Before recent standards efforts, municipal governments, for example in Miami, Florida[8], have
historically taken the lead in enforcing integration standards for smart grids/meters. As
municipalities or municipal electricity monopolies also often own some fiber optic backbones
and control transit exchanges at which communication service providers meet, they are often
well positioned to force good integration.

Municipalities also have primary responsibility for emergency response and resilience, and
would in most cases have the legal mandate to ration or provision power, say to ensure that
hospitals and fire response and shelters have priority and receive whatever power is still
available in a general outage.

[edit] Home grid

A "home grid" extends some of these capabilities into the home using powerline networking and
extensions to DC (power over Ethernet). The IEEE P2030-specified interoperability standards
are expected to resolve these distinctions and clarify global, continental, regional, municipal and
home scopes. The distinctions are similar to those that are required to differentiate types of
LAN, Internet Protocol and the Internet itself. Since many of the same technologies are used in
smart and home grids, notably IPv6 and SNMP, terminology such as intergrid and intragrid is
sometimes used in the trade press.

Because the communication standards both smart power grids and home grids build on support
more bandwidth than is required for power control, a home grid generally has megabits of
additional bandwidth for other services (burglary, fire, medical and environmental sensors and
alarms, ULC and CCTV monitoring, access control and keying systems, intercoms and secure
phone line services), and accordingly can't be separated from LAN and VoIP networking, nor
from TV once the IPTV standards have emerged.

Consumer electronics devices now consume over half the power in a typical US home.
Accordingly, the ability to shut down or hibernate devices when they are not receiving data could
be a major factor in cutting energy use.

[edit] Government support and developments

In 2009, smart grid companies may represent one of the biggest and fastest growing sectors in
the "cleantech" market [9]. It consistently receives more than half the venture capital investment.

In 2009 President Barack Obama asked the United States Congress "to act without delay" to pass
legislation that included doubling alternative energy production in the next three years and
building a new electricity "smart grid". [10] On April 13, 2009, George W. Arnold was named the
first National Coordinator for Smart Grid Interoperability [11]. In June 2009, the NIST announced
a smart grid interoperability project via IEEE P2030[12].

Europe and Australia are also following similar visions. In those parts of the world, the
integration of communications and power control, both of which have generally fallen under
more government supervision, is more advanced, with utilities often required or asked to provide
competitive access to communications transit exchanges and distributed power co-generation
connection points.

On August 20, 2009, Casa Presedencial in Costa Rica introduced a bill to the country's
Legislative Assembly that would open up the energy market, which is currently run by a
government monopoly, and require all new private electricity generators to use smart grid
technology.
[edit] Researchers and regulators support IP, closer power and data ties

Bill St. Arnaud of CANARIE (Canada's backbone research institute) argues often for closer
integration of power and telecom policy, proposing that consumers should own their own power
meter data explicitly and that they should have a choice of service providers for communication
and power management, with reach potentially into every home AC outlet. [13] In the US, FCC
Chair Michael Powell likewise expresses support for this principle of unifying the power
management and other data services and offering basic levels of both to every consumer, rather
than allowing power management to exist in its own separate "silo" or be confined only to non-
IP-based meters or devices.

The IEEE P2030 project seeks to define interoperability between various types of power grids, in
part to prevent the emergence of too many incompatible silos that would cause the overall grid to
be less resilient.

[edit] What a grid is

An "electricity grid" is not a single entity but an aggregate of multiple networks and multiple
power generation companies with multiple operators employing varying levels of
communication and coordination, most of which is manually controlled. Smart grids increase the
connectivity, automation and coordination between these suppliers, consumers and networks that
perform either long distance transmission or local distribution tasks.

 Transmission networks move electricity in bulk over medium to long distances, are
actively managed, and generally operate from 345kV to 800kV over AC and DC lines.
 Local networks traditionally moved power in one direction, "distributing" the bulk power
to consumers and businesses via lines operating at 132kV and lower.

This paradigm is changing as businesses and homes begin generating more wind and solar
electricity, enabling them to sell surplus energy back to their utilities. Modernization is necessary
for energy consumption efficiency, real time management of power flows and to provide the bi-
directional metering needed to compensate local producers of power. Although transmission
networks are already controlled in real time, many in the US and European countries are
antiquated[14] by world standards, and unable to handle modern challenges such as those posed by
the intermittent nature of alternative electricity generation, or continental scale bulk energy
transmission.

[edit] Modernizes both transmission and distribution

A smart grid is an umbrella term that covers modernization of both the transmission and
distribution grids. The modernization is directed at a disparate set of goals including facilitating
greater competition between providers, enabling greater use of variable energy sources,
establishing the automation and monitoring capabilities needed for bulk transmission at cross
continent distances, and enabling the use of market forces to drive energy conservation.
Many smart grid features readily apparent to consumers such as smart meters serve the energy
efficiency goal. The approach is to make it possible for energy suppliers to charge variable
electric rates so that charges would reflect the large differences in cost of generating electricity
during peak or off peak periods. Such capabilities allow load control switches to control large
energy consuming devices such as hot water heaters so that they consume electricity when it is
cheaper to produce.

[edit] Peak curtailment/levelling and time of use pricing

To reduce demand during the high cost peak usage periods, communications and metering
technologies inform smart devices in the home and business when energy demand is high and
track how much electricity is used and when it is used. To motivate them to cut back use and
perform what is called peak curtailment or peak levelling, prices of electricity are increased
during high demand periods, and decreased during low demand periods. It is thought that
consumers and businesses will tend to consume less during high demand periods if it is possible
for consumers and consumer devices to be aware of the high price premium for using electricity
at peak periods. When businesses and consumers see a direct economic benefit to become more
energy efficient, the theory is that they will include energy cost of operation into their consumer
device and building construction decisions. See time of use pricing and peak curtailment for
more information on how this affects the consumer, and peak levelling for how the utilities view
the overall supply problem.

According to proponents of smart grid plans,[who?] this will reduce the amount of spinning reserve
that electric utilities have to keep on stand-by, as the load curve will level itself through a
combination of "invisible hand" free-market capitalism and central control of a large number of
devices by power management services that pay consumers a portion of the peak power saved by
turning their devices off. To economists[who?], this is a form of rent seeking: Consumers have the
right to consume expensive power even during peak periods, and give this up if they are offered
a share of the savings of not having to provide it. The opportunity only exists because the
consumer doesn't pay the real price of meeting peak demand, and is a function of power price
regulation.[citation needed]

[edit] Essential for renewable energy

Supporters of renewable energy favor smarter grids, because most renewable energy sources are
intermittent in nature, depending on natural phenomena (the sun and the wind) to generate
power. Thus, any type of power infrastructure using a significant portion of intermittent
renewable energy resources must have means of effectively reducing electrical demand by "load
shedding" in the event that the natural phenomena necessary to generate power do not occur. By
increasing electricity prices exactly when the desired natural phenomena are not present,
consumers will, in theory, decrease consumption. However this means prices are unpredictable
and literally vary with the weather, at least to the distribution utility.

[edit] Platform for advanced services

As with other industries, use of robust two-way communications, advanced sensors, and
distributed computing technology will improve the efficiency, reliability and safety of power
delivery and use. It also opens up the potential for entirely new services or improvements on
existing ones, such as fire monitoring and alarms that can shut off power, make phone calls to
emergency services and etc..

[edit] US and UK savings estimates and assumptions behind them

One United States Department of Energy study calculated that internal modernization of US
grids with smart grid capabilities would save between 46 and 117 billion dollars over the next 20
years[15]. As well as these industrial modernization benefits, smart grid features could expand
energy efficiency beyond the grid into the home by coordinating low priority home devices such
as water heaters so that their use of power takes advantage of the most desirable energy sources.
Smart grids can also coordinate the production of power from large numbers of small power
producers such as owners of rooftop solar panels — an arrangement that would otherwise prove
problematic for power systems operators at local utilities.

The above vision makes two assumptions. First, that they will act in response to market signals
and there needs to be some sort of telecommunications network. In the UK, where consumers
have for nearly 10 years had a choice in the company from which they purchase electricity, more
than 80% have stayed with their existing supplier, despite the fact that there are significant
differences in the prices offered by a given electricity supplier. End users may be less responsive
to price signals than proponents of Smart Grids think. Second, in the case of the telecomms
aspect of Smart Grids, this ignores the possibility of bringing autonomy to a given appliance.
Various companies (such as RLTec) have developed low cost systems which allow products to
react to network fluctuations (usually network frequency). This type of control is called
"dynamic demand management". A feature of DDM being that, it is low cost, needs no
telecomms network and is available now. Of course these are not points which proponents of a
"power telecomms network" may wish to hear about or indeed see propagated.

Although there are specific and proven smart grid technologies in use, smart grid is an aggregate
term for a set of related technologies on which a specification is generally agreed, rather than a
name for a specific technology. Some of the benefits of such a modernized electricity network
include the ability to reduce power consumption at the consumer side during peak hours, called
Demand side management; enabling grid connection of distributed generation power (with
photovoltaic arrays, small wind turbines, micro hydro, or even combined heat power generators
in buildings); incorporating grid energy storage for distributed generation load balancing; and
eliminating or containing failures such as widespread power grid cascading failures. The
increased efficiency and reliability of the smart grid is expected to save consumers money and
help reduce CO2 emissions.

[edit] History
Today's alternating current power grid evolved after 1896, based in part on Nikola Tesla's design
published in 1888 (see War of Currents). Many implementation decisions that are still in use
today were made for the first time using the limited emerging technology available 120 years
ago. Specific obsolete power grid assumptions and features (like centralized unidirectional[1]
electric power transmission, electricity distribution, and demand-driven control) represent a
vision of what was thought possible in the 19th century.

Part of this is due to an institutional risk aversion that utilities naturally feel regarding use of
untested technologies on a critical infrastructure they have been charged with defending against
any failure, however momentary.[citation needed]

Over the past 50 years, electricity networks have not kept pace with modern challenges, such as:

 security threats, from either energy suppliers or cyber attack

 national goals to employ alternative power generation sources whose intermittent supply
makes maintaining stable power significantly more complex
 conservation goals that seek to lessen peak demand surges during the day so that less
energy is wasted in order to ensure adequate reserves
 high demand for an electricity supply that is un-interruptible
 digitally controlled devices that can alter the nature of the electrical load and result in
electricity demand that is incompatible with a power system that was built to serve an
“analog economy.” For a simple example, timed Christmas lights can present significant
surges in demand because they come on at near the same time (sundown or a set time).
[citation needed]
Without the kind of coordination that a smart grid can provide, the increased
use of such devices lead to electric service reliability problems, power quality
disturbances, blackouts, and brownouts[16].

Although these points tend to be the "conventional wisdom" with respect to smart grids, their
relative importance is debatable. For instance, despite the weaknesses of power network being
publicly broadcast, there has never been an attack on a power network in the United States or
Europe.[citation needed] However, in April 2009 it was learned that spies had infiltrated the power
grids, perhaps as a means to attack the grid at a later time.[citation needed] In the case of renewable
power and its variability, recent work undertaken in Europe (Dr. Bart Ummels et al.)[Full citation needed]
suggests that a given power network can take up to 30% renewables (such as wind and solar)
without any changes whatsoever.

The term "Smart Grid" was coined by Andres E. Carvallo on April 24, 2007 at an IDC energy
conference in Chicago, were he presented that the Smart Grid was the combination of energy,
communications, software and hardware. And he went on to explain that such combination
would only come to live with the creation of a new systems architecture, integration and
modeling framework, which he presented. In short, he predicted a new direction for the industry
in which he called for the creation of the "smart grid" for each utility to deliver the 21st century
promise of new forms of energy and levels of efficiency and conservation for customers across
the globe. His definition of a Smart Grid is that it is the integration of an electric grid, a
communications network, software, and hardware to monitor, control and manage the creation,
distribution, storage and consumption of energy. The 21st century Smart Grid reaches every
electric element, it is self-healing, it is interactive, and it is distributed.
Smart grid technologies have emerged from earlier attempts at using electronic control, metering,
and monitoring. In the 1980s, Automatic meter reading was used for monitoring loads from l

arge customers, and evolved into the Advanced Metering Infrastructure of the 1990s, whose
meters could store how electricity was used at different times of the day.[17] Smart meters add
continuous communications so that monitoring can be done in real time, and can be used as a
gateway to demand response-aware devices and "smart sockets" in the home. Early forms of
such Demand side management technologies were dynamic demand aware devices that passively
sensed the load on the grid by monitoring changes in the power supply frequency. Devices such
as industrial and domestic air conditioners, refrigerators and heaters adjusted their duty cycle to
avoid activation during times the grid was suffering a peak condition. Beginning in 2000, Italy's
Telegestore Project was the first to network large numbers (27 million) of homes using such
smart meters connected via low bandwidth power line communication[18]. Recent projects use
Broadband over Power Line (BPL) communications, or wireless technologies such as mesh
networking that is advocated as providing more reliable connections to disparate devices in the
home as well as supporting metering of other utilities such as gas and water[citation needed].

Monitoring and synchronization of wide area networks were revolutionized the early 1990s when
the Bonneville Power Administration expanded its smart grid research with prototype sensors
that are capable of very rapid analysis of anomalies in electricity quality over very large
geographic areas. The culmination of this work was the first operational Wide Area
Measurement System (WAMS) in 2000[19]. Other countries are rapidly integrating this
technology — China will have a comprehensive national WAMS system when its current 5-year
economic plan is complete in 2012[20].

[edit] First cities with smart grids

The earliest, and still largest, example of a smart grid is the Italian system installed by Enel
S.p.A. of Italy. Completed in 2005, the Telegestore project was highly unusual in the utility
world because the company designed and manufactured their own meters, acted as their own
system integrator, and developed their own system software. The Telegestore project is widely
regarded as the first commercial scale use of smart grid technology to the home, and delivers
annual savings of 500 million € at a project cost of 2.1 billion €.[18].

In the US, the city of Austin, Texas has been working on building its smart grid since 2003,
when its utility first replaced 1/3 of its manual meters with smart meters that communicate via a
wireless mesh network. It currently manages 200,000 devices real-time (smart meters, smart
thermostats, and sensors across its service area), and expects to be supporting 500,000 devices
real-time in 2009 servicing 1 million consumers and 43,000 businesses[21]. Boulder, Colorado
completed the first phase of its smart grid project in August 2008. Both systems use the smart
meter as a gateway to the home automation network (HAN) that controls smart sockets and
devices. Some HAN designers favor decoupling control functions from the meter, out of concern
of future mismatches with new standards and technologies available from the fast moving
business segment of home electronic devices[22].

Hydro One, in Ontario, Canada is in the midst of a large-scale Smart Grid initiative, deploying a
standards-compliant communications infrastructure from Trilliant. By the end of 2010, the
system will serve 1.3 million customers in the province of Ontario. The initiative won the "Best
AMR Initiative in North America" award from the Utility Planning Network. [23]

[edit] Problem definition

The major driving forces to modernize current power grids can be divided in four, general
categories.

 Increasing reliability, efficiency and safety of the power grid.

 Enabling decentralized power generation so homes can be both an energy client and
supplier (provide consumers with interactive tool to manage energy usage).
 Flexibility of power consumption at the clients side to allow supplier selection (enables
distributed generation, solar, wind, biomass).
 Increase GDP by creating more new, green-collar energy jobs related to renewable
energy industry manufacturing, plug-in electric vehicles, solar panel and wind turbine
generation, energy conservation construction[24][25].

[edit] Smart grid functions

Before examining particular technologies, a proposal can be understood in terms of what it is
being required to do. The governments and utilities funding development of grid modernization
have defined the functions required for smart grids. According to the United States Department
of Energy's Modern Grid Initiative report[25], a modern smart grid must:

1. Be able to heal itself

2. Motivate consumers to actively participate in operations of the grid
3. Resist attack
4. Provide higher quality power that will save money wasted from outages
5. Accommodate all generation and storage options
6. Enable electricity markets to flourish
7. Run more efficiently

[edit] Self-healing

Using real-time information from embedded sensors and automated controls to anticipate, detect,
and respond to system problems, a smart grid can automatically avoid or mitigate power outages,
power quality problems, and service disruptions.[citation needed]

As applied to distribution networks, there is no such thing as a "self healing" network. If there is
a failure of an overhead power line, given that these tend to operate on a radial basis (for the
most part) there is an inevitable loss of power. In the case of urban/city networks that for the
most part are fed using underground cables, networks can be designed (through the use of
interconnected topologies) such that failure of one part of the network will result in no loss of
supply to end users. A fine example of an interconnected network using zoned protection is that
of the Merseyside and North Wales Electricity Board (MANWEB).

It is envisioned that the smart grid will likely have a control system that analyzes its performance
using distributed, autonomous reinforcement learning controllers that have learned successful
strategies to govern the behavior of the grid in the face of an ever changing environment such as
equipment failures. Such a system might be used to control electronic switches that are tied to
multiple substations with varying costs of generation and reliability.[26]

[edit] Consumer participation

A smart grid, is, in essence, an attempt to require consumers to change their behavior around
variable electric rates or to pay vastly increased rates for the privilege of reliable electrical
service during high-demand conditions. Historically, the intelligence of the grid in North
America has been demonstrated by the utilities operating it in the spirit of public service and
shared responsibility, ensuring constant availability of electricity at a constant price, day in and
day out, in the face of any and all hazards and changing conditions. A smart grid incorporates
consumer equipment and behavior in grid design, operation, and communication. This enables
consumers to better control (or be controlled by) “smart appliances” and “intelligent equipment”
in homes and businesses, interconnecting energy management systems in “smart buildings” and
enabling consumers to better manage energy use and reduce energy costs. Advanced
communications capabilities equip customers with tools to exploit real-time electricity pricing,
incentive-based load reduction signals, or emergency load reduction signals.

There is marketing evidence of consumer demand for greater choice. A survey conducted in the
summer of 2007 interviewed almost 100 utility executives and sought the opinions of 1,900
households and small businesses from the U.S., Germany, Netherlands, England, Japan and
Australia[27]. Among the findings:

1. 83% of those who cannot yet choose their utility provider would welcome that option
2. Roughly two-thirds of the customers that do not yet have renewable power options would
like the choice
3. Almost two-thirds are interested in operating their own generation, provided they can sell
power back to the utility

And as already noted, in the UK where the experiment has been running longest, 80% have no
interest in change (source: National Grid).

The real-time, two-way communications available in a smart grid will enable consumers to be
compensated for their efforts to save energy and to sell energy back to the grid through net-
metering. By enabling distributed generation resources like residential solar panels, small wind
and plug-in hybrid, smart grid will spark a revolution in the energy industry by allowing small
players like individual homes and small businesses to sell power to their neighbors or back to the
grid. The same will hold true for larger commercial businesses that have renewable or back-up
power systems that can provide power for a price during peak demand events, typically in the
summer when air condition units place a strain on the grid. This participation by smaller entities
has been called the "democratization of energy"[citation needed]—it is similar to former Vice President
Al Gore's vision for a Unified Smart Grid.

[edit] Resist attack

Smart grid technologies better identify and respond to man-made or natural disruptions. Real-
time information enables grid operators to isolate affected areas and redirect power flows around
damaged facilities.

One of the most important issues of resist attack is the smart monitoring of power grids, which is
the basis of control and management of smart grids to avoid or mitigate the system-wide
disruptions like blackouts. The traditional monitoring is based on weighted least square (WLS)
which is very weak and prone to fail when gross errors (including topology errors, measurement
errors or parameter errors) are present. New technology of state monitor is needed to achieve the
goals of the smart grids.

[edit] High quality power

Outages and power quality issues cost US businesses more than $100 billion on average each
year[28]. It is asserted that assuring more stable power provided by smart grid technologies will
reduce downtime and prevent such high losses.

[edit] Accommodate generation options

As smart grids continue to support traditional power loads they also seamlessly interconnect fuel
cells, renewables, microturbines, and other distributed generation technologies at local and
regional levels. Integration of small-scale, localized, or on-site power generation allows
residential, commercial, and industrial customers to self-generate and sell excess power to the
grid with minimal technical or regulatory barriers. This also improves reliability and power
quality, reduces electricity costs, and offers more customer choice.

[edit] Enable electricity market

Significant increases in bulk transmission capacity will require improvements in transmission

grid management. Such improvements are aimed at creating an open marketplace where
alternative energy sources from geographically distant locations can easily be sold to customers
wherever they are located.

Intelligence in distribution grids will enable small producers to generate and sell electricity at the
local level using alternative sources such as rooftop-mounted photo voltaic panels, small-scale
wind turbines, and micro hydro generators. Without the additional intelligence provided by
sensors and software designed to react instantaneously to imbalances caused by intermittent
sources, such distributed generation can degrade system quality.
[edit] Optimize assets

A smart grid can optimize capital assets while minimizing operations and maintenance costs.
Optimized power flows reduce waste and maximize use of lowest-cost generation resources.
Harmonizing local distribution with interregional energy flows and transmission traffic improves
use of existing grid assets and reduces grid congestion and bottlenecks, which can ultimately
produce consumer savings.

[edit] Features
Existing and planned implementations of smart grids provide a wide range of features to perform
the required functions.

[edit] Load adjustment

The total load connected to the power grid can vary significantly over time. Although the total
load is the sum of many individual choices of the clients, the overall load is not a stable, slow
varying, average power consumption. Imagine the increment of the load if a popular television
program starts and millions of televisions will draw current instantly. Traditionally, to respond to
a rapid increase in power consumption, faster than the start-up time of a large generator, some
spare generators are put on a dissipative standby mode[citation needed]. A smart grid may warn all
individual television sets, or another larger customer, to reduce the load temporarily (to allow
time to start up a larger generator) or continuously (in the case of limited resources). Using
mathematical prediction algorithms it is possible to predict how many standby generators need to
be used, to reach a certain failure rate. In the traditional grid, the failure rate can only be reduced
at the cost of more standby generators. In a smart grid, the load reduction by even a small portion
of the clients may eliminate the problem.

[edit] Demand response support

Demand response support allows generators and loads to interact in an automated fashion in real
time, coordinating demand to flatten spikes. Eliminating the fraction of demand that occurs in
these spikes eliminates the cost of adding reserve generators, cuts wear and tear and extends the
life of equipment, and allows users to cut their energy bills by telling low priority devices to use
energy only when it is cheapest[29].

Currently, power grid systems have varying degrees of communication within control systems
for their high value assets, such as in generating plants, transmission lines, substations and major
energy users. In general information flows one way, from the users and the loads they control
back to the utilities. The utilities attempt to meet the demand and succeed or fail to varying
degrees (brownout, rolling blackout, uncontrolled blackout). The total amount of power demand
by the users can have a very wide probability distribution which requires spare generating plants
in standby mode to respond to the rapidly changing power usage. This one-way flow of
information is expensive; the last 10% of generating capacity may be required as little as 1% of
the time, and brownouts and outages can be costly to consumers.
[edit] Greater resilience to loading

Although multiple routes are touted as a feature of the smart grid, the old grid also featured
multiple routes. Initial power lines in the grid were built using a radial model, later connectivity
was guaranteed via multiple routes, referred to as a network structure. However, this created a
new problem: if the current flow or related effects across the network exceed the limits of any
particular network element, it could fail, and the current would be shunted to other network
elements, which eventually may fail also, causing a domino effect. See power outage. A
technique to prevent this is load shedding by rolling blackout or voltage reduction (brownout).
[citation needed]

[edit] Decentralization of power generation

Another element of fault tolerance of smart grids is decentralized power generation. Distributed
generation allows individual consumers to generate power onsite, using whatever generation
method they find appropriate. This allows individual loads to tailor their generation directly to
their load, making them independent from grid power failures. Classic grids were designed for
one-way flow of electricity, but if a local sub-network generates more power than it is
consuming, the reverse flow can raise safety and reliability issues. A smart grid can manage
these situations.[citation needed]

[edit] Price signaling to consumers

In many countries, including Belgium, the Netherlands and the UK, the electric utilities have
installed double tariff electricity meters in many homes to encourage people to use their electric
power during night time or weekends, when the overall demand from industry is very low.
During off-peak time the price is reduced significantly, primarily for heating storage radiators or
heat pumps with a high thermal mass, but also for domestic appliances. This idea will be further
explored in a smart grid, where the price could be changing in seconds and electric equipment is
given methods to react on that. Also, personal preferences of customers, for example to use only
green energy, can be incorporated in such a power grid.[citation needed]

[edit] Technology
The bulk of smart grid technologies are already used in other applications such as manufacturing
and telecommunications and are being adapted for use in grid operations. In general, smart grid
technology can be grouped into five key areas[30]:

[edit] Integrated communications

Some communications are up to date, but are not uniform because they have been developed in
an incremental fashion and not fully integrated. In most cases, data is being collected via modem
rather than direct network connection. Areas for improvement include: substation automation,
demand response, distribution automation, supervisory control and data acquisition (SCADA),
energy management systems, wireless mesh networks and other technologies, power-line carrier
communications, and fiber-optics. Integrated communications will allow for real-time control,
information and data exchange to optimize system reliability, asset utilization, and security.

[edit] Sensing and measurement

Core duties are evaluating congestion and grid stability, monitoring equipment health, energy
theft prevention, and control strategies support. Technologies include: advanced microprocessor
meters (smart meter) and meter reading equipment, wide-area monitoring systems, dynamic line
rating (typically based on online readings by Distributed temperature sensing combined with
Real time thermal rating (RTTR) systems), electromagnetic signature measurement/analysis,
time-of-use and real-time pricing tools, advanced switches and cables, backscatter radio
technology, and Digital protective relays.

[edit] Smart meters

Main article: Smart meter

A smart grid replaces analog mechanical meters with digital meters that record usage in real
time. Smart meters are similar to Advanced Metering Infrastructure meters and provide a
communication path extending from generation plants to electrical outlets (smart socket) and
other smart grid-enabled devices. By customer option, such devices can shut down during times
of peak demand.[citation needed]

[edit] Phasor measurement units

Main article: Phasor measurement unit

High speed sensors called PMUs distributed throughout their network can be used to monitor
power quality and in some cases respond automatically to them. Phasors are representations of
the waveforms of alternating current, which ideally in real-time, are identical everywhere on the
network and conform to the most desirable shape. In the 1980s, it was realized that the clock
pulses from global positioning system (GPS) satellites could be used for very precise time
measurements in the grid. With large numbers of PMUs and the ability to compare shapes from
alternating current readings everywhere on the grid, research suggests that automated systems
will be able to revolutionize the management of power systems by responding to system
conditions in a rapid, dynamic fashion[31].

A Wide-Area Measurement Systems (WAMS) is a network of PMUS that can provide real-
time monitoring on a regional and national scale. Many in the power systems engineering
community believe that the Northeast blackout of 2003 would have been contained to a much
smaller area if a wide area phasor measurement network was in place.[32]

[edit] Advanced Components

Innovations in superconductivity, fault tolerance, storage, power electronics, and diagnostics

components are changing fundamental abilities and characteristics of grids. Technologies within
these broad R&D categories include: flexible alternating current transmission system devices,
high voltage direct current, first and second generation superconducting wire, high temperature
superconducting cable, distributed energy generation and storage devices, composite conductors,
and “intelligent” appliances.[citation needed]

[edit] Advanced control

Power system automation enables rapid diagnosis of and precise solutions to specific grid
disruptions or outages. These technologies rely on and contribute to each of the other four key
areas. Three technology categories for advanced control methods are: distributed intelligent
agents (control systems), analytical tools (software algorithms and high-speed computers), and
operational applications (SCADA, substation automation, demand response, etc). Using artificial
intelligence programming techniques, Fujian power grid in China created a wide area protection
system that is rapidly able to accurately calculate a control strategy and execute it[33]. The
Voltage Stability Monitoring & Control (VSMC) software uses a sensitivity-based successive
linear programming method to reliably determine the optimal control solution[34].

[edit] Improved interfaces and decision support

Information systems that reduce complexity so that operators and managers have tools to
effectively and efficiently operate a grid with an increasing number of variables. Technologies
include visualization techniques that reduce large quantities of data into easily understood visual
formats, software systems that provide multiple options when systems operator actions are
required, and simulators for operational training and “what-if” analysis.

[edit] Standards and groups

IEC TC57 has created a family of international standards that can be used as part of the smart
grid. These standards include IEC61850 which is an architecture for substation automation, and
IEC 61970/61968 — the Common Information Model (CIM). The CIM provides for common
semantics to be used for turning data into information.

MultiSpeak has created a specification that supports distribution functionality of the smart grid.
MultiSpeak has a robust set of integration definitions that supports nearly all of the software
interfaces necessary for a distribution utility or for the distribution portion of a vertically
integrated utility. MultiSpeak integration is defined using extensible markup language (XML)
and web services.

The IEEE has created a standard to support synchrophasors — C37.118.

A User Group that discusses and supports real world experience of the standards used in smart
grids is the UCA International User Group.

There is a Utility Task Group within LonMark International, which deals with smart grid related
issues.
There is a growing trend towards the use of TCP/IP technology as a common communication
platform for Smart Meter applications, so that utilities can deploy multiple communication
systems, while using IP technology as a common management platform.[35][36]

IEEE P2030 is an IEEE project developing a "Draft Guide for Smart Grid Interoperability of
Energy Technology and Information Technology Operation with the Electric Power System
(EPS), and End-Use Applications and Loads"[37][38].

NIST has included ITU-T G.hn as one of the "Standards Identified for Implementation" for the
Smart Grid "for which it believed there was strong stakeholder consensus"[39]. G.hn is standard
for high-speed communications over power lines, phone lines and coaxial cables.

OASIS EnergyInterop' – is an OASIS technical committee developing XML standards for

energy interoperation. It's starting point is the California OpenADR standard.

[edit] Government Policy and Financing

[edit] Countries

[edit] Australia

The Australian Government has committed to investing $100m in smart grids.[2] In early-
October it is expected to call for proposals to initiate a study into the technology with the
successful location to be announced in early 2010. The study is expected to increase customer
awareness and engagement in energy usage and establish distributed demand management and
distributed generation management.

Within Australia the adoption of smart grids is hindered by a lack of service level obligations on
electricity distribution businesses to connect distributed generation devices in a timely
fashion[3].

[edit] Canada

The government of Ontario, Canada, through the Energy Conservation Responsibility Act in
2006, has mandated the installation of Smart Meters in all Ontario businesses and households by
2010.

[edit] China

As part of its current 5-year plan, China is building a Wide Area Monitoring system (WAMS)
and by 2012 plans to have PMU sensors at all generators of 300 megawatts and above, and all
substations of 500 kilovolts and above. All generation and transmission is tightly controlled by
the state, so standards and compliance processes are rapid. Requirements to use the same PMUs
from the same Chinese manufacturer and stabilizers conforming to the same state specified are
strictly adhered to. All communications are via broadband using a private network, so data flows
to control centers without significant time delays[20].

On May 21, 2009, China has announced an aggressive framework for Smart Grid deployment.
Comparing with US and Europe, the Chinese Smart Grid appears to be more transmission-
centric. [40]

[edit] European Union

Development of smart grid technologies is part of the European Technology Platform (ETP)
initiative and is called the SmartGrids Technology platform [4]. The SmartGrids European
Technology Platform for Electricity Networks of the Future began its work in 2005. Its aim is to
formulate and promote a vision for the development of European electricity networks looking
towards 2020 and beyond[41][citation needed].

[edit] United States

It has been suggested that this section be split into a new article. (Discuss)

Support for smart grids became federal policy with passage of the Energy Independence and
Security Act of 2007[42]. The law, Title13, sets out $100 million in funding per fiscal year from
2008–2012, establishes a matching program to states, utilities and consumers to build smart grid
capabilities, and creates a Grid Modernization Commission to assess the benefits of demand
response and to recommend needed protocol standards[43]. The Energy Independence and
Security Act of 2007 directs the National Institute of Standards and Technology to coordinate the
development of smart grid standards, which FERC would then promulgate through official
rulemakings. [44]

Smart grids received further support with the passage of the American Recovery and
Reinvestment Act of 2009, which set aside $11 billion for the creation of a smart grid.[citation needed]

The Federal Energy Regulatory Commission (FERC) issued a proposed policy statement and
action plan on March 19, 2009 for standards governing the development of a smart grid, leading
to a final rule issued July 16, 2009.[45] However, FERC notes that the electric industry is already
moving ahead with smart grid technologies, so it is proposing to establish some general
principles that the smart grid standards should follow. FERC is also looking at the growth in
clean energy, so the commission wants to be sure that smart grids will better accommodate
renewable energy resources, demand response systems, energy storage systems, and electric
vehicles. For electric vehicles, FERC at least wants the smart grid to allow charging during times
of low power demand, but ideally the commission would like the smart grid to accommodate
vehicle-to-grid technologies, which would use the nation's electric vehicles as a vast, distributed,
energy storage system.[44]

USDOE issued a Notice of Intent and a draft Funding Opportunity Announcement (FOA) that
will lay the groundwork for providing nearly $4 billion in American Reinvestment and Recovery
Act funds to support smart grid projects. The Notice of Intent was issued for DOE's Smart Grid
Investment Grant Program], which will provide grants of $500,000 to $20 million for smart grid
technology deployments and grants of $100,000 to $5 million for the deployment of grid
monitoring devices. The program will provide matching grants of up to 50% of the project cost,
and the total funding for the program is $3.375 billion. In addition, the draft FOA paves the way
toward an offer of $615 million to support demonstrations of regional smart grids, utility-scale
energy storage systems, and grid monitoring devices.

Commerce Secretary Gary Locke announced that he will co-chair a smart grid meeting with
Secretary of Energy Steven Chu in Washington, D.C., in early May 2009. The meeting will bring
together industry and government leaders to begin a critical discussion about developing
industry-wide standards for smart grid technologies. Industry leaders at this meeting are expected
to pledge to harmonize industry standards and to commit to a timetable to reach a standards
agreement. Additional meetings on May 19-20 will be used to make further progress on a
standards agreement.[46]

In September 2008, the National Science Foundation established the FREEDM Systems Center,
an Engineering Research Center to develop future smart grid technologies that will enable plug-
and-play integrations of distributed generations and distributed storages. At the heart of the
center's technology development is the use of wide bandgap power electronics technology to
control and protect the power grid.

On 2009-07-20, USDOE awarded $47 million in American Recovery and Reinvestment Act
funds on July 20 to eight ongoing smart grid demonstration projects. The $47 million investment
will add to the $17 million in funds DOE had awarded these eight projects in 2008, thereby
accelerating the timelines for the projects. Most of the projects relate to technologies to help
transmission and distribution systems operate better, but a few are directly related to renewable
energy. For example, the city of Fort Collins, Colorado, will research, develop, and demonstrate
a coordinated and integrated system of mixed clean energy technologies and distributed energy
resources, allowing the city to reduce its peak electrical demand by at least 15%. Meanwhile, the
Illinois Institute of Technology (IIT) in Chicago will focus on implementing distributed energy
resources and creating demand-responsive microgrids, which are small power networks that can
operate independently of the utility power grid. In addition, the University of Hawaii will explore
the management of its electrical distribution system to better accommodate wind power.[47]

[edit] Obstacles

In Europe and the US, significant impediments exist to the widespread adoption of smart grid
technologies, including:

 regulatory environments that don't reward utilities for operational efficiency, excluding
U.S. awards.
 consumer concerns over privacy,[clarification needed]
 social concerns over "fair" availability of electricity,[clarification needed]
 social concerns over Enron style abuses of information leverage,[clarification needed]
 limited ability of utilities to rapidly transform their business and operational environment
to take advantage of smart grid technologies.
  concerns over giving the government mechanisms to control the use of all power using
activities.[clarification needed]

Before a utility installs an advanced metering system, or any type of smart system, it must make
a business case for the investment. Some components, like the Power System Stabilizers (PSS)
installed on generators are very expensive, require complex integration in the grid's control
system, are needed only during emergencies, but are only effective if other suppliers on the
network have them. Without any incentive to install them, power suppliers don't[20]. Most utilities
find it difficult to justify installing a communications infrastructure for a single application (e.g.
meter reading). Because of this, a utility must typically identify several applications that will use
the same communications infrastructure – for example, reading a meter, monitoring power
quality, remote connection and disconnection of customers, enabling demand response, etc.
Ideally, the communications infrastructure will not only support near-term applications, but
unanticipated applications that will arise in the future. Regulatory or legislative actions can also
drive utilities to implement pieces of a smart grid puzzle. Each utility has a unique set of
business, regulatory, and legislative drivers that guide its investments. This means that each
utility will take a different path to creating their smart grid and that different utilities will create
smart grids at different adoption rates.

Some features of smart grids draw opposition from industries that currently are, or hope to
provide similar services. An example is competition with cable and DSL Internet providers from
broadband over powerline internet access. Providers of SCADA control systems for grids have
intentionally designed proprietary hardware, protocols and software so that they cannot inter-
operate with other systems in order to tie its customers to the vendor[20].

[edit] General economics developments

As customers can choose their electricity suppliers, depending on their different tariff methods,
the focus of transportation costs will be increased. Reduction of maintenance and replacements
costs will stimulate more advanced control.

A smart grid precisely limits electrical power down to the residential level, network small-scale
distributed energy generation and storage devices, communicate information on operating status
and needs, collect information on prices and grid conditions, and move the grid beyond central
control to a collaborative network[32].

[edit] See also

Energy portal
Sustainable development portal

 Charging station
 Power line communication
 Unified Smart Grid (USA)
 SuperSmart Grid
 Super Grid
 Wide area synchronous grid
 Pickens plan
 Vehicle-to-grid
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