Smart Grid Overview

In announcing the American Recovery and Reinvestment Smart Grid projects in October 2009, President Obama explained the importance of our transformation to a smarter grid in saying:

"It will make our grid more secure and more reliable, saving us some of the $150 billion we lose each year during power outages. It will allow us to more effectively transport renewable energy generated in remote places to large population centers, so that a wind farm in rural South Dakota can power homes in Chicago. And by facilitating the creation of a clean energy economy, building this 21st-century energy infrastructure will help us lay a foundation for lasting growth and prosperity."

The electricity transmission and distribution grid in North America is considered one of the supreme engineering achievements of the 20th century, and is often called the "world's largest machine". The Grid connects huge power generating facilities with end users (both residential and commercial) in a system that is flexible enough, every second of every day, to accommodate the nation's growing demand for reliable and affordable electricity. However, as wonderful as this sounds, the environmental impact, inefficiencies, as well as the construction and operating costs, have reached limits that are now intolerable.

The smart grid is being designed to be digitally enabled and device-aware that gathers, distributes, and acts on information about the behavior of all participants (suppliers and consumers) in order to improve the efficiency and reliability of the system. This will ultimately result in benefits for society as a whole.

The objective of the Smart Grid initiatives is to create a more responsive system that organizes the flow of energy and information through all of its networks for the benefit of all who use it. There is even an emerging movement calling for the interconnection of a global power grid. Essentially, the capabilities of the Smart Grid will allow utilities to proactively manage demand, re-route power around disturbances, integrate distributed renewables and electric transportation and continue to offer reliable and affordable electricity into the foreseeable future.

Conclusion

The Smart Grid has become a critical agenda item in the U.S. and around the world, and the Obama administration is directing significant funding to Smart Grid developments. As a result, huge amounts of capital are being and will be deployed over the next decade and beyond in upgrading the nation's power grid.

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