How Essential is the Smart Grid?

Shehu Khaleel | Mar 10, 2010

Utility companies generate, transmit and distribute energy to consumers. This can be done more efficiently, cost-effectively and remain sustainable by designing an electric system that integrates smart devices, critical data and two-way communication between the utilities and the consumer-Smart Grid.

Many argue that Smart Grid is no capable enough to significantly reduce the excessive T&D energy losses. And some argue that the reduction is quite uneconomical compared to the cost of integrating smart grid equipment to decades old grids. Many consider Smart Grid as an incapable innovation especially with the conventional system of power Generation, Transmission and Distribution. Well considering all these argument many start to wonder how essential the Smart Grid is. And various questions are still un-answered to how does Smart Grid reduce energy waste. Its role in renewable energy integration into conventional energy grid, how could smart grid improve energy consumption efficiency.

Smart grid technologies provide utilities and consumers with real-time knowledge and decision-making tools that will empower them to save energy, resources, money, and the environment. The smart grid is not a product, but rather a collection of hardware and software that works together to make today's grid, well, smarter.

Overlaying the current power infrastructure with smart grid technology is like connecting the Internet to the computer, making an already useful machine much better and providing people with information to make intelligent decisions. Similarly, the smart grid, or the "energy Internet", empowers consumers, businesses and utilities to make smarter energy choices.

1. Could it really reduce energy waste?

Smart grid technologies help improve efficiency by providing the utility with information, so the utility can deliver just what is needed by the consumer and maximize productivity or minimize it depending on the consumption rate. Transmitting more than required power along the lines would expose the lines to more losses, this is due to the complexities of how power is currently delivered.

These losses take place due to the reactive load, or VArs, and also resistive load, all are functions of the length of the power transmission line. Therefore modern intelligent-grids are equipped with sensors and the sensors are incorporated with capacitors.

Adding the sensors and capacitors along the line can help compensate for the losses due to reactive load. Capacitors along the line help produce VArs where they're needed to decrease losses.

2. Does Smart Grid minimize power outages?

Power outages cost the industrialize Economies more than 450billion USD. Power outage cost US economy more than 100billion dollars alone. And outages normally occur as a result of malfunction of power components along the grid. Transformers are key components of an electric grid. A catastrophic failure of a critical transformer would result in power outages in the downstream network and could cause significant economic and environmental challenges.

Smart grid technologies help utilities maximize asset performance and reduce unexpected transformer failure and subsequent power outages through alerts, detection, diagnosis, and prognosis. By monitoring different conditions within the transformer, such as gas levels, smart sensors will detect and report potential problems back to the utility in real-time. The information sent to the utility can be stored and analyzed by advanced software, helping predict and prevent potential transformer failure before it happens.

Smart grid technologies can help intelligently re-route power on the grid to isolate outages and minimize customer impact. Mobile mapping technologies help utilities immediately direct crews to restore power, moving utilities from guessing to knowing.

3. Renewable energy integration into conventional power grid.

Smart grid technologies can help reliably integrate variable renewable energy into the grid. When renewable resources are producing electricity, the possibility of congestion on transmission lines can create a barrier to their full utilization. The variability of renewable sources can also cause challenges. And whenever renewables are offline i.e. the wind doesn't blow or it's a cloudy day -- other power generation will be needed to fill in the gaps.

Fortunately, smart grid technologies can help manage the unpredictability of wind and solar to help alleviate reliability and stability issues caused by power fluctuations. Automated demand response technologies will act as a lever that utilities can pull to help lower demand in the event there is a gap in renewable power generation -- for instance, if the wind stops blowing. To address such contingencies, a utility may incent consumers to opt into programs that allow certain devices (i.e., water heaters) to be temporarily switched off during peak times.

In the future, storage technologies could also help utilities manage the short-term imbalances in the supply and demand of energy, sometimes caused by the fluctuations of a lot of renewable energy. Batteries will store energy during times of excess wind energy production and discharge that energy via smart grid automation technologies when energy demand exceeds supply.

4. Smart metering, Grid automation and monitoring

Smart grid automation technologies, such as distribution management systems and outage management systems, can work in conjunction with smart meters and advanced metering infrastructure to provide real-time knowledge of the grid's status, enabling utilities to prevent trouble before it occurs.

In advanced applications, monitoring and control technologies -- known as fault diagnosis, isolation and restoration -- can help mitigate the problem before deploying a repair crew. Using monitoring and control software, utilities will be able to identify problems on the grid and automatically reroute power to isolate damage and impact. Technically, these technologies help detect and isolate faulted feeder sections by opening and closing the necessary switches to restore power to the healthy feeder section within seconds. Once isolated, crews will immediately be dispatched to correct any problems.


Investing in the smart grid now is a great way to make a "down payment" on the reduction of the global GHG emissions. Improving energy efficiency throughout the grid and increasing the ability of the system to more easily accept non-carbon-based clean energy resources are just two of the ways the smart grid can help now.

Research indicates that carbon emissions could be reduced by 25% in America if smart grid technologies are implemented. If the grid allowed energy production to be just 5% more efficient, the energy savings would equate to eliminating the fuel and greenhouse gas emissions from 53 million cars.

Smart grid technologies will also enable higher percentages of centralized and distributed renewable generation to enter the grid efficiently and reliably so they can become significant contributors to the overall global energy platform, helping us reduce the challenges of outages, increase energy efficiency and defer the need to build more energy and power generation infrastructures. Smart grid Technology is of course an essential part of the solution to the global energy crises.

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In general, a good article, though too shortsighted. In your third point above you state "Batteries will store energy during times of excess wind energy production and discharge that energy via smart grid automation technologies when energy demand exceeds supply." Central battery storage is implied, which is I think missing the boat. Where the future batteries will be is in your customer's PHEV autos (note HYBRID). With just a slightly improved metering system the grid could constantly adjust prices so that willing customers would choose not to charge their cars when the grid is overstressed (due to a lull in wind, lack of sun, a baseload station failure or a grid fault) and possibly even do their morning comutes using bio-fuels or petroleum. Some may even have autos smart enough to return power to the grid, IF the grid were smart enough to fairly compensate them.

If a utility can pay off the capital on a simple-cycle peaker or a central flow-battery installation by running it perhaps only 100 hours / year then it could save money by paying a very high rate for power from auto batteries for that 100 hours.

eg. lets assume that the utility needs to earn $50 / kw / year to pay off the capital on the peaker. Then it pays $0.05 / kwh in fuel due to the low efficiency. That means that the power from the peaker is costing them $0.55 / kwh. If my PHEV is capable, on request, of delivering 10 kwh and still provide me enough electric power to barely do my commute. If my programming of the meter system allowed to to deliver to 50 2-hour emergency situations, in a year it could earn me 10 x 50 x $0.55 = $275. If my commute was short (as is common, most time is spent idling in traffic jams), chances are I might not even need to spend any extra on fuel.

That's where grid engineers and utiliy planners need to be thinking these days.

Off topic.

Red characters on blue background (as in Len's posting above) are almost impossible for me to read.

Agreed Don, though its not the colour, its the "brightness / intensity" which is the problem. I've tried a lot of different settings, and any which is readable on this site's light blue alternate post backgrounds is practically unreadable on it's dark blue backgrounds.

Here's some tests. Post a favourite choice.

Independent Market for Every Utility Customer - Preliminary Business Case

Independent Market for Every Utility Customer - Preliminary Business Case

Independent Market for Every Utility Customer - Preliminary Business Case

Independent Market for Every Utility Customer - Preliminary Business Case

Independent Market for Every Utility Customer - Preliminary Business Case

Independent Market for Every Utility Customer - Preliminary Business Case

Independent Market for Every Utility Customer - Preliminary Business Case

Len, I confess I have never read your IMEUC proposal. Based on the title, I suspect our thinking on the topic is quite similar. Thanks for the link.

Much of this article makes little sense.

"Transmitting more than required power along the lines would expose the lines to more losses, this is due to the complexities of how power is currently delivered."

If you have figured out a way to transmit more power along a power line than the consumer is requesting please patent it. You'll have beat Einstein and will be an instant millionaire. The whole purpose of the grid is to balance in real time EXACTLY the amount of production with EXACTLY the amount of demand. Electrons are not "sent" they flow due to potential difference and they will only flow when they are demanded by the customer. You cannot send more power down a line than the customers demand.

Reactive load (VARS) is directly attributable to the use of electric motors and similar devices on the grid. Resistive load (electric heaters) do not create VARS. The ratio of reactive to resistive load is the power factor which can be adjusted at the generator by adjusting the generator field current. Most generators operate as close to PF=1 as possible since this is the most efficient operating mode. The grid already uses capacitor banks to counteract the use of electric motors and similar devices so nothing new there. In addition generators are often used to create reactive power. Usually generators not being used to create megawatts are deployed for this purpose routinely by grid operators.

"Adding the sensors and capacitors along the line can help compensate for the losses due to reactive load. Capacitors along the line help produce VArs where they're needed to decrease losses."

The capacitor banks used at grid substations are not some little capacitor you might find on a printed circuit board. They are about the size of a small house. They are already used in every grid system in the world. Not new at all. Been used for about a century.

In part 2 you talk about monitoring transformers. Not sure of you have ever worked in the power industry but all transformers are routinely monitored for all the things you mentioned. And for the most part this information is already transmitted to grid control centres. Oil in transformers is routinely sampled and changed as required. Transformers are also very reliable and it is extremely rare for a transformer to unexpectedly fail without warning (although it has occurred). Even so most grid substations are able to re-route power around failed devices so there is significant redundancy built in to grid systems. So nothing new there either.

In item 3 you talk about the variability of wind and solar power. When the wind is not blowing or the Sun is not shining power output from these devices falls - that is trus of course but if the demand is still there another power source will be utilised to maintain the flow of electrons. It is of course the fundamental reason why renewables are not economic. Because you need two power must be there as a back up when the wind or the Sun is not there. I agree you could control demand and cut off some customers who choose to and you could automatically shutoff air conditioners but turning off small loads isn't going to make a hill of beans difference. Some utilities do that already and you don't need a smart grid to do it.

So I have not read anything here that is not already done. All grids have sophisticated fault logic for safety and grid stability reasons. Phase to phase and phase to ground will automatically disconnect the line in a cycle or two - if they did not the lines and other components would be damaged. Fault protection is a major feature of all grid systems so nothing new there either.

So I am still looking for what is new in this article. If this is supposed to be a description of a smart grid then we are already have it.

Len's idea of charging PHEV's at night or in times of low demand might work - at least in theory. But you would need to change out the whole current stock of automobiles or a significant chunk of it to make much of a difference and of course if you did the peak energy demand would switch from about 5 pm to midnight. Of course battery chargers require transformers and rectifiers to convert the 110 volt AC to 12V DC which introduce VARS into the system which tends to make the grid less efficient. And how exactly does one convert the DC that you have in your car into AC for the grid. You need an inverter. and who is going to pay for millions of those. These are also very inefficient devices.

Unless by some Len Gould magic people abruptly change their lifestyles I think the concept is a non-starter and not very well thought out.



I agree with most of your comments since I suspect many of the practices you describe about grid operation and control have already been automated to some degree. I suppose some grids in places could use more monitoring and automation to replace manual intervention.

The one area where smart grid seems to be of large interest to local distribution companies is outage management. Smart meters can be "pinged" through their AMI networks from the utility's head end to more quickly determine exactly where outages are, leading to faster more efficient repairs in the field. The traditional approach in many utilities has been to rely on customer phone calls to report outages.

I like your last comment - who is going to pay for millions of inverters to feed battery power back into the grid. By extension, who is going to pay for all the smart grid initiatives. Without regulatory reforms, I'm afraid we as consumers will all be paying for it, through much higher utility bills down the road, whether we want any sort of smart grid technology or not in our homes. It’s going to be a tough pill to swallow for many consumers, and in places like Ontario here where the electricity system is highly political and continually tinkered with by legislators, consumers will choke on this bitter pill and show it during future provincial elections.

There are certainly technologies out there that can be used to control demand and, as you say Bob, to make system maintenance easier - especially on large local distribution networks that are common in Canada. The point I was trying to Mr. Khaleel the author was that none of what I read was new and to try to portray the items he noted as somehow "innovative" when we have been using them for years is very misleading. In my view the grid systems we have are already very very smart and extraordinarily reliable.

It certainly made me wonder whether the author had spent any time in the power industry.

Regarding the idea of using PHEV's to reverse power the grid. It is one of those nice ideas that seem good in theory but in practice would be a train wreck - and an expensive one at that.

While storage batteries seem like the solution to intermittent energy supplies from solar and wind the reality is that significant amounts of energy are lost in the conversion from AC to DC and then from DC back to AC and there is no way around it. Apart from this power inverters (those in the tens of kilowatt to megawatt range) - even the most modern solid state ones - are quite noisy and they are not cheap. The hapless PHEV owner would likely have to buy one in addition to his vehicle and a new battery every four years. The few bucks made selling power back to the grid is not likely to cover the cost.

Also I am not sure that the wave forms produced by inverted DC would be satisfactory for reverse powering the grid. I suspect a lot of devices that are designed to work on a pure sine wave would not work so well on a capacitor clipped wave form. Perhaps Len has some solutions to that.

One solution is to convert the entire grid to DC. That will only cost a few tens of billions and the need to replace all of the outdated AC appliances with new DC ones will be a stimulus to the economy. (likely the Chinese economy - not ours). I can hear the idea rattling around the halls of power now - it's right up there with windmills at 14c/Kwh and solar at 80c/Kwh.

Lets call it Green DC - that oughta sell it.


Malcom I realy appreciate your comment. And as a professional in the industry I do believe you have some important and educative resources, that would help me to improve my knowledge especially on the Grids automation. Secondly I ve been in the power field for almost 9-years though on a devoloping country where Grid automation is something new. But the article was written long ago. I would be glad to communicate with you please. My email is Thank you


Well I owe you an apology sir

Please forgive my ignorance. I had written my response based on how the North American and European grid systems are operated. In less developed countries the systems are indeed much less sophisticated and VAR losses are significant because investment in capacitor banks is prohibitively costly.

From a developing country perspective your article makes much more sense and I do see (now) where you are coming from.

There are many techniques available to you to improve your system and I will write to you soon to discuss further.

Once again my sincere apologies for completely misreading your article.


Thank you Malcolm, I once more appreciate your comment. I would be looking forward to further discuss with you.

Malcolm: "And how exactly does one convert the DC that you have in your car into AC for the grid. You need an inverter. and who is going to pay for millions of those. These are also very inefficient devices. " -- Tesla has developed the ideal gridwise auto system. When charging batteries, they use the auto's motor(s) as a transformer and its drive electronics as an inverter, meaning the auto constantly carries around its entire charging system, which also happens to be capable of returning DC power from the batteries or generator to the grid as AC at the load rating of the auto's drive inverters. No added cost except for requiring a double- insulated motor, and surprisingly high efficiency. Of course that's too advanced for any large auto manufacturer to implement.... And the auto fleet will likely be entirely PHEV long before your staid old business even tries to identify advantages to encouraging it.

If electric utilities had half the brains of Warren Buffet they would long ago have begun lobbying Washington to buy Tesla's patents into the public domain and encouraging all the large auto mfgrs to implement them.