What makes a smart grid ‘smart’?

What makes a smart grid 'smart'?

Historically, our energy needs were quite simple and low. Families often needed to power a couple of lightbulbs and maybe a radio. Therefore, the grid system would work in one direction, from the power generation source to the house. There would be no communication between utility company and customer, and no monitoring of energy usage. However, our energy demands have become significantly more complex, which has called for a more developed and advanced smart grid system. What is most special about the smart grid system is that electricity can travel in both directions. While customers still call electricity from the utility company, they also can produce energy and send it to the grid (through solar panel systems or wind turbines).

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What the smart grid also offers is constant communication between the customer and utility company, which allows for the following technologies to take place:

  • Variable Pricing
    • A common practice is when utility companies offer a changing rate for the electricity you use. Primarily, they charge significantly lower rates for the later hours of the day. This way, the power grid will not be under as much stress during the daytime hours, when most people are home and using their heating, cooling, entertainment, and other systems.
  • Demand Response
    • Demand Response (better known as DR) is a common way of preventing blackouts and brownouts. Mostly aimed toward commercial (but also residential) customers, utility companies incentivize their customers to use less electricity during moments of high stress on the grid. For example, factories are paid large sums of money to reduce their energy during hot summer days when most homes use their air conditioning. This is all possible due to the smart grid, which allows for constant communication between utility companies and customers.
  • Optimization and remote control of devices
    • Important components of a smart grid are smart devices. These are devices that can be controlled remotely from cell phones or laptops. This allows one to customize when these devices run, hand in hand with variable pricing or demand response. For example, you can have your washing machine run at night when electricity is cheaper, or shut off devices during a demand response event to gain income from your utility.
smart grid

Major benefits of having a smart grid

  • Less use of fossil fuel power plants
    • During the months when there is a lot of stress put on the power grid, power plants have to produce more to keep up with the demand. This often comes in the form of carbon-emitting power plants. With demand response and other tools the smart grid offers, we can reduce the energy demand at these peak times, therefore, reducing the need to use more fossil fuel power generation.
  • Greener power production
    • Enabling people to receive energy from the grid and send energy into the grid creates the possibility of residential power production. You have certainly seen this through solar panels in your neighbourhood or community. These solar panels are sending energy in to the grid, reducing the need for fossil fuel power generation.