Where's the Smart Grid?

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Although there has been talk of it for years, many Americans are not fully aware of what the Smart Grid is. Most are aware of “smart meters” and “green energy,” which can be components of this grid, but that’s not the complete picture.

The key differentiators between the Smart Grid and our current electrical grid are those features that provide two-way interaction between a utility company and its customers. Some experts define it as a bi-directional supply chain that uses information technology to connect power generation to transmission, distribution, and consumers.1

Another way to think of it is as the “cloud computing” for the utility industry, where “Web 2.0 technologies” will operate sophisticated switching systems to better route electricity through the system. It will also provide productive ways to use and deploy monitoring technology.

In practice, the Smart Grid will use consumer interfaces such as in-home displays, as well as programmable communicating appliances and smart meters to monitor power usage and gather other data at a house or office building.

The smart grid network will route the data it collects to the utility where analytical software and customer information systems will be used to control various functions, such as consumption patterns, demand response, pricing, and load balancing. The feedback loop will be completed when actionable information is sent back to the customer.

It is this two-way connection that offers both benefits and drawbacks. First, we’ll examine the benefits being promised by advocates of the Smart Grid. Then, we’ll consider some of the negatives.

This two-way “power conversation” between electrical devices and energy providers is being promoted as a democratization of electricity decisionmaking. A key benefit being cited is that the data unleashed will allow consumers to adjust energy consumption to their own individual preferences. They will be able to control their electricity consumption to a degree that satisfies their gadget obsessions, reduces their emissions profile, and manages their energy bills.

The Smart Grid is also expected to deliver more accurate price signals, appropriate information feedback, and technology to help manage energy use. Many experts believe these factors, when combined, will enable residential consumers to cut their peak demand by 30 percent as well as reduce power consumption overall.

The key to making this happen are the interoperability standards that will allow smart appliances and other electrical devices to automatically react to changing electricity prices...

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