Smart Grid

Author: Xiaoyu Ma


The paper presents information on Smart Grid. Using recent data and knowledge about Smart Grid, this paper mainly introduces the meaning of Smart Grid, the significance and goals of Smart Grid, history of Smart Grid development. Technologies of Smart Grid include: integrated communications, sensing and measurement technologies, advanced components, advanced control methods, and improved interfaces and decision support. Smart Grid must have self-healing, consumer participation, resist attack, high quality power, accommodate generation options, enable electricity market, optimize assets, enable high penetration of intermittent generation sources. Finally, this paper takes an outlook of the Smart Grid future. With cost and benefit analysis in Smart Grid, we found that Smart Grid can really provide people a more prosperous, healthier, and more quality life. In contrast, for today electric power system, major questions exist about its ability to continue providing citizens and businesses with relatively clean, reliable, and affordable energy services.


Smart Grid, electric power grid, efficiency, reliability, environment/climate change, affordability, security, national economy, global competitiveness, smart meters, global warming, energy independence


An overview of the meaning of Smart Grid, the significance and goals of Smart Grid, history of Smart Grid development, and Technologies of Smart Grid.

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1. INTRODUCTION: What is Smart Grid?

Smart Grid is a concept regarding digital technology application and electric power network. It offers a lot of valuable technologies that can be used within the near future or are already in use today. Smart Grid includes electric network, digital control appliance, and intelligent monitoring system. All of these, can deliver electricity from producers to consumers, control energy flow, reduce the loss of what, and make the performance of the electric network more reliable and controllable[1].

In the short term, a smarter grid will function more efficiently, enabling it to deliver the level of service we have come to expect more affordably in an era of rising costs, while also offering considerable societal benefits – such as less impact on our environment[2].

In longer term, we can expect the Smart Grid to spur the kind of transformation that the internet has already brought to the way we live, work, play and learn[2].

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2. Significance and Goals: What is Smart Grid used for?

As demand climbed quickly, there has been serious shortage in energy transmission and distribution. With reference to US, since 2000 [3], only 668 additional miles of interstate electric energy transmission line have been created, compared to the hundreds of thousands of high-voltage transmission lines course throughout the United States. Consequently, the outage and power quality really costs American Electric Utilities a lot. People really need an optimal and efficient way to ‘broadcast’ the power flows from a few of central power generators to a large amount of consumers, then, Smart Grid came out.

Fig. 1: Percentage of Revenue

Smart Grid can offer a lot of potential economic and environmental benefits and Significance:

  1. Improve reliability of power quality and transmission
  2. Increased power distribution efficiency and conservation
  3. Reduced costs for electric utilities
  4. Reduced expenditures on electricity by households and businesses
  5. Lower Greenhouse Gas(GHG) and other gas emissions

Reliability: because of the requirement of power increasing, the slow response time of mechanical switches, a lack of automatic analytics, more and more blackouts and brownouts happen. Take US as an example[4], as we know, in the past 40 years, there have been 5 massive blackouts, and three of them occurred in the past 9 years. However, Smart Grid can solve these problems, today. As technology evolves, people can make power more controllable and planned centrally. Now, with Smart Grid’s help, we avoid this kind of risks before they happen.

Efficiency: according to research data, if the power grid can be more efficient by just 5%, it will save us the energy as the same as 53 million cars’ GHG emission[5]. Think about it, if every American family takes off one incandescent bulb, and use a compact fluorescent bulb instead. The whole country will conserve enough electric energy to light 3 million homes and save at least $600 million annually[5]. Therefore, we really get the great reason to improve Smart Grid.

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3. History of Development: When and Where did smart grid start to be used?

The power grid started in 1896, based in part on Nikola Tesla's design published in 1888, but recently, in the past 50 years, electricity networks have not kept pace with modern challenges, such as: security threats, national power employment and distribution, high demand of power quality and so on. Therefore, the concept of Smart Grid came out, and the term smart grid has been in use since 2005.

3.1 The earliest and largest Smart Grid

Installed by ENEL S.P.A of Italy, and completed in 2005, the Teleogestore project was highly different from other system in the utility world. Its general architecture integrates electronic meter, provides metering, and contracts management and PLC communication functions. The Automatic Meter management communicates by public telecommunication networks (such as GSM, GPRS, PSTN & satellite) with LV concentrators (CBT) installed in every MV substation. LV Concentrators are able to manage the communication in both directions: half-duplex communication between Remote Metering Central System and Electronic Meters. The Teleogestore project is widely regarding as the first commercial use of Smart Grid. It offers annual savings of 500 million euro at the cost of 2.1 billion euro[6].

3.2 In the US

States such as Texas, California, New Jersey, Illinois, New York, Ohio and others are already actively exploring ways to raise the use of tools and technologies toward the realization of a smarter grid.

The main Smart Grid System list as follows[5]:

  1. Distribution Management System (DMS) Platform by the University of Hawaii[7]
  2. Perfect Power by Illinois Institute of Technology (IIT)
  3. West Virginia Super Circuit by Allegheny Energy
  4. Beach Cities Micro Grid by San Diego Gas & Electric
  5. High Penetration of Clean Energy Technologies by The City of Fort Collins

3.3 In other countries

In Ontario, Canada, Hydro One is in the midst of a large-scale Smart Grid initiative. By the end of 2010, this system will serve 1.3 million customers in the province of Ontario[8].

In China, the government has embarked on a 10-year project to build a ‘smart grid’ that will catapult power transmission into the digital age, securing electricity supplies and boosting energy conservation. The program is expected to be a boon to companies that provide equipment and technology to the power industry[9].

Fig. 2: Investment in China's power sector

Many Implementation decisions that are still in use today were made for the first time using the limited emerging technology available 120 years ago, but still, there are many new technologies coming out.

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4. Technologies of Smart Grid

Smart Grids is a new concept for electricity networks. The initiative responds to the rising challenges and opportunities, bringing benefits to all users, stakeholders and companies that perform efficiently and effectively. Smart Grid Technologies are already used in other applications such as manufacturing and telecommunications and are being used in grid operation.

Department of Energy (DOE) lists five fundamental technologies that will drive the Smart Grid[5]:

  1. Integrated communications, connecting electronic components to get information and control every part in real time, on the other hand, make every part of the Smart Grid both ‘listen’ and ‘talk’.

  2. Sensing and measurement technologies, to provide faster and more accurate response information of each important part of Smart Grid, such as remote monitoring, real time thermal rating, electromagnetic signature analysis, real-time pricing and demand-side management.

  3. Advanced components, to apply the latest research in superconductivity, storage, power electronics and diagnostics. they 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.

  4. Advanced control methods, to monitor essential components, enabling rapid diagnosis and precise solutions appropriate to any event. There are three categories for advanced control methods: distributed intelligent agents, analytical tools, and operational application.

  5. Improved interfaces and decision support, information systems reduce the complexity of Smart Grid to make both operator and manager use it more efficiently and easily, to amplify human decision-making.

New technologies bring new functions to Smart Grid, which make Smart Grid more competitive than the old power grid.

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5. Functions of Smart Grid

The government 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 a modern smart grid must have:

5.1 Self-healing from power disturbance events

As Anderson notes, "The problems that have caused the recent spate of blackouts will propagate cascading failures of the grid more and more frequently, unless we create a more intelligent grid control system. The system must become automated, because decision speeds increasingly are becoming too fast for humans to manage. This is a vital national security interest . . . The management of the smart grid will require digital control, automated analysis of problems, and automatic switching capabilities more familiar to the Internet.”

Operators or managers can use the real-time information which comes from embedded sensors and automated controls to anticipate, detect, and respond to system problems to automatically avoid or mitigate power outages, blackout, power quality problems, and system collision.

Smart Grid will likely have a control system that can analyze 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[10].

5.2 Enabling active consumers participation and operating resiliently against attack

Smart Grid allows consumers to change their behaviors around variable electric rates. It incorporates consumer equipment and behavior in grid design, operation, and communication system. Consumers can control the appliances of Smart Grid in homes or businesses. The connection between energy management systems enables consumers to manage energy better, and help them access to real-time pricing. The real-time, two-way communications available in 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.

Smart grid can identify and respond to hacker attack or natural disruptions better. Real-time information enables both grid operators and managers to isolate affected areas and redirect power flows around damaged facilities.

The smart monitoring of power grids can control and manage smart grids to avoid the system disruptions like blackouts. The traditional WLS monitoring prone mass errors weakly (including topology errors, measurement errors or parameter errors). New technology of state monitor is needed to achieve the goals of the smart grids[11].

5.3 Providing power quality and optimizing assets

According to recent data, losses of Outages and power quality issues in US businesses is more than $100 billion on average annually. More stable power provided by smart grid technologies will reduce downtime and prevent such high cost[5].

Smart Grid can optimize capital assets by minimizing operations and maintaining lower costs. Optimizing power flows can make full use of lowest-cost generation resources and reduce waste. Harmonizing local distribution and transmission of interregional energy flows improves use of existing grid facilities and reduces grid jams, which can ultimately save consumer money.

5.4 Accommodating all generation and enabling new products, services, and markets

As smart grids continue to support traditional power loads they also seamlessly interconnect fuel cells, renewable, micro-turbines, 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.

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[12].

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6. Features: Implementations of Smart Grids

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

6.1 Load Reduction

As we know, the total load connected between the power grids can change remarkably which means the overall load is not a stable, slow varying, average power consumption. Usually, responding time of a rapid increase in power consumption should be longer than the start-up time of a large generator, some spare generators are put on a dissipative standby mode. If there is a smart grid, it may restrict all individual devices, 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). With mathematical prediction algorithms’ help, it is possible for us to figure out 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[13].

6.2 Elimination of the demand fraction

By using control systems, power grid systems have varying degrees of communication, such as in generators part, transmission lines, substations part and major energy consumers. Normally, information only flows from the users and the loads they control back to the utilities. The utilities attempt to supply the demand and succeed or fail to varying degrees, such as brownout, rolling blackout, and uncontrolled blackout. Demand response allows generators and loads to interact in real time. 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[13].

6.3 Distribution of power generation

Generation Distribution allows individual consumers to create power on their place by themselves. This allows individual loads to manage their generation directly to their load, making them independent from public power grid, by which consumers can avoid power failure. 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.

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7. Vision of the future of Smart Grid

Fig. 3: Smart Grid in the Future

In the future, Smart Grid will connect everyone to abundant, affordable, clean, efficient, and reliable electric power anytime, anywhere. It will offer the world the best and most secure electric services. The same type of existing electric infrastructure will still play a very important role in the future, such as, power transmission line and substations[14].

“Smart Grid is a fully automated power delivery network that monitors and controls every customer and node, ensuring a two- way flow of electricity and information between the power plants and appliances and all points in between.”[15]

Technological breakthroughs in superconductivity have made it possible to deliver large amounts of energy over long distances into congested areas with no loss and near-zero voltage drops. New conductor materials enable two to three times the power through existing rights-of-way. Advances in energy storage and demand-side management technologies have virtually eliminated peak-load problems. Economic losses from power outages and power quality disturbances are extremely rare (never caused by electric resource constraints), and customers routinely obtain electricity services at reliability and quality levels tailored to their individual needs with greatly reduced environmental impacts.

In the Future, Smart Grid consists of three major elements[15]:

  1. National electricity ‘backbone’, it is possible for people to balance the supply and demand of electric power service in the range of nation.

  2. Regional interconnections, which include Canada and Mexico, The national backbone are connected with two major North American regional interconnections: East and West.

  3. Local distribution, mini- and micro grids providing services to customers and obtaining services from generation resources anywhere on the continent.

In the future, Smart Grid will benefit the American economy, environment, national security, and people. National electric power grid will encourage economic growth by attracting capital to support infrastructure development and investment in new factory and business for electricity customers.

Making energy transmission and distribution more efficiently will reduce line losses, lower emission of GHG and pollution. Operating resiliently against physical and cyber attack, faster detection of outages, and rapid restoration systems will improve the security of electric grid.

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In this paper, Smart Grid’s 7 advantages were introduced: Efficiency, Reliability, Environment/climate change, Affordability, Security, National Economy, and Global Competitiveness.

The Smart Grid creates value up and down the value chain, much like the internet has. As we have experienced with the internet, affordable, rapid and universal communication in Smart Grid can enable sophisticated transactions, create entirely new business models and sweep across society with surprising speed. We can see a bright future. Working together, a willing coalition of industry, universities, nongovernmental organizations, and Federal and state government agencies can help make Smart Grid a reality.

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[2]. European Smart Grids Technology Platform, (2006) Author: European Commission Directorate-General for Research Information and Communication Unit
[3]. the Smart Grid and Intelligent Power, (2010-2-10) Author: Larry Darter,

[4]. Some Alternative Energy Names Are Ready to Power Up, (2010-4-10),

[5]. The Smart Grid: An introduction, (2008),Association: Litos Strategic Communication,

[6]. ENEL’s Metering System and Telegestore Project, (2006-2-19),Author: Sergio Rogai ENEL Distribuzione S.p.A.,

[7]. Surles University of Hawaii Project Summary. (2008),

[8]. the Power of Smart Metering,

[9]. China gets smart on power supply, (2009-6-1),Author: Fu Chenghao,

[10]. The SuperSmart Grid, (2008-6-18),Author: A. Battaglini, J. Lilliestam, C. Bals and A. Haas.
[11]. 2007 IBM Energy and Utilities Global Residential/Small Business Consumer Survey,

[12]. Smart Grid, (2010),

[13]. Challenge and Opportunity: Charting a New Energy Future, (2010),

[14]. The rise of the Smart Grid, (2009),

[15]. “GRID 2030” A NATIONAL VISION FOR ELECTRICITY’S SECOND 100 YEARS, (2003-6),Author: United States Department of Energy Office of Electric Transmission and Distribution

11 List of Acronyms

DMS Distribution Management System
DOE Access Point
GHG Lower Greenhouse Gas
GSM Global System for Mobile Communications
GPRS General Packet Radio Service
IEEE Institute of Electrical and Electronics Engineers
IIT Illinois Institute of Technology
MANWEB Merseyside and North Wales Electricity Board
PLC Programmable Logic Controller
PSTN Public Switched Telephone Network
WLS Weighted Least Square
Date Last Modified: 4/05/2010