What it Takes to Make Smart Power Grids a Reality

By Timothy P. Adams, assistant associate editor

While current power delivery system infrastructure is still serving the industry well, by most standards, new load demands and aging assets are forcing the industry to begin looking to the future with hope of finding solutions that will sufficiently meet or exceed the energy demands of the next century. Without possessing a crystal ball that is able to provide any answers to the predicament, the industry, as a whole, has to look at itself to find a smarter, more standardized and long-term solution rather than the duct tape-type solutions that have been so common in recent decades.

Thus, distribution companies must do one of two things: passively approach the pressures of upgrading current industry infrastructure or proactively research and implement new technologies and networks. Some companies are beginning to look toward the latter. One way they are doing this is by researching the opportunities and benefits the intelligent, self-healing grid, or “smart” grid, offers.

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The smart power grid is defined as a transmission and distribution system that is capable of automatically anticipating and responding to conflicts within the energy delivery system, while continuing to function at an optimal level (see Figure 1). It would allow new infrastructure to meet growing demands, improve operations and efficiency, increase reliability and enhance energy security issues. The smart power grid would achieve this level of optimal performance through three key component areas:

Advanced network analytics using smart meters to continuously monitor the status of the intelligent electricity network, distribution companies can store the constant stream of data they provide in a data warehouse, where it can be utilized through advanced network analytics and used to boost operational efficiency.

Network design optimization can lower the cost of operating networks and help reduce capital expenditures. Without fine-grained information from the intelligent network, distribution companies must respond to growing demand by upgrading the network across the board. Analysis of individual customer load patterns, on the other hand, can enable operators to avoid upgrading circuits where upgrades are not needed.

Network operations analytics focus on power flows within the network, helping to improve reliability and reduce or defer capital expenditures. With real-time monitoring of contingent fault currents, operators can trigger network splitting and switching to keep fault currents from overloading critical components. Data from smart meters allows engineers to be dispatched to fault zones with the right equipment, enabling even quicker recovery from network failures.

Why it is Needed

The need to look at smart power grid development has come about by way of two areas. One is power delivery infrastructure. With current infrastructure not designed in an optimal fashion for deregulated markets, “we currently have power grids that were installed to support specific service territories. However, these designs did not take into account the number of power transactions from a deregulated wholesale power market that would allow power flows between regions,” said Wade Malcolm, vice president of power delivery for the Electric Power Research Institute.

This means that in addition to servicing the customers already in their service territory, power grids now have the responsibility of supporting the many power transactions that pass through their territory on a daily basis.

The second is simply the nature of advancement in science, which might be compared somewhat to the industrial revolution. The need to develop a smart power grid comes from the evolution of independent technologies tested in today’s markets-both inside and outside the utility industry-that promote enhancing manual labor with automated technologies.

“We have the need to look and develop a more creative way to increase the amount of throughput energy that can be sent along a transmission line. We also need to be able test new designs for the power grid in order to achieve these optimal levels of operation. And in order to do this, we have to examine technologies that are emerging and how these technologies can be combined and give us a step-functioning improvement over what exists today,” added Malcolm.

Potential Benefits

As difficult as it may be to actually bring the smart power grid to reality anytime soon, the potential benefits of an intelligent power delivery system definitely seem to be worth the battle (see Figure 2). The power grid’s ability to apply automated technologies that communicate and operate in real-time would allow the distribution company to locate and detect faults; restore remote service over wide areas of service territory; interact with consumers and markets; and provide real-time energy pricing; load management, metering and load shedding.

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“Operational efficiency is definitely another key benefit of the smart power grid,” said Michael Valocchi, a business strategy partner with IBM Business Consulting Services.

“A number of maintenance and operational decisions at the grid level are done so with a significant lack of real-time information. Decisions are currently made on time-based or historical-based data, so we do not really have the adequate information to make pinpointed maintenance and operational decisions at the moment, but with real-time data monitoring development this becomes possible, thus faster and better decisions can be made regarding energy delivery,” added Valocchi.

The smart power grid would also improve the way grid investments are made. With the lack of real-time data and standardized grid components available, distribution companies are unable to accurately assess current power grid investments or the need for future investments.

“Having this type of architecture and real-time data available allows utilities to anticipate and properly plan capital investments. A major improvement that the smart power grid will provide is that it will allow companies to plan today for tomorrow’s needs, which means that they can position themselves for the future without incurring any expenses outside of the normal,” stated Malcolm.


As beneficial as the smart power grid appears to be, there are still tools that need to be developed and integrated before it becomes a finished product, which by some accounts could take upward of 15 to 20 years for full implementation.

One area in particular that has had a large role in constraining smart power grid research and development is the lack of investment into the overall scheme of the power grid.

“There has been a lot of investment made to promote efficiency from a financial and reliability point of view recently, resulting in decreased research and development, but I see that it is beginning to come back. It is not fair to blame the industry because the utilities have been under a tremendous amount of pressure over the last three or four years to become cost effective and a low-cost provider,” said Valocchi.

In addition, without knowing the pace of deregulation and the status of the new federal energy policy, companies are hesitant about the future of the investment environment in power delivery systems. And without an acknowledgement from regulators that there will an appropriate recovery mechanism associated with power grid investment, it keeps companies at arm’s length and wary about any sort of “lead-the-pack” approach.

“Utility owners are quite uncertain about the rate of return, as well as what the future of regulation will be, so most want to wait and see what the regulatory environment is going to hold, therefore they can justify their investments,” stated Malcolm.

Another factor that seems to distance the reality of the smart power grid is communication across the entire power grid scheme. With such a variety of different systems and protocols within the system that need to exchange data effectively, the industry would need to develop standardized communication interfaces, as well as adopt common practices throughout, which would accelerate the acceptance of these new technologies and result in lower integration costs.

Fast simulation and modeling is another barrier in smart power grid development that needs to be bridged. The industry has to develop and implement new algorithms to both control and integrate the next generation set of devices on the power grid. “Faster tools for processes, such as simulation and modeling, need to be developed in order to make the proper push for a smart power grid. Being able to develop new mathematical techniques that allow utilities to simulate power grid behavior along with the utility’s response to the behavior will be imperative,” added Malcolm.

Having these tools means companies would be able to review measurements and anticipate a problem ahead of time and would be able to respond in a more proactive and accurate manner.


With the uncertainty that surrounds the industry and new energy regulations, it may prove difficult to make the smart power grid a “dream come true” anytime soon, however, there is plenty that can be done to promote industry research and investment. As companies begin to see market stabilization, some will begin to think more strategically and begin looking at ways that will allow them to standout with their industrial and commercial customers, thus researching and investing in the smart power grid concept becomes a viable option.

“The smart power grid is a very important topic. One that takes careful analysis by utilities, regulators and the technology industry, because it will be a combination of all the stakeholders that will truly get this started and make it a reality,” said Valocchi.

One development that will help promote the smart grid, said Malcolm, is an industry-wide public domain support infrastructure where research, field studies, case studies and guidelines can be shared. This will not only become an important vehicle from which companies can receive feedback, but also a mechanism in which they can review and implement best-practice concepts, which ultimately will result in accelerating research, adoption and implementation of the technologies needed to build this grid of the future.

“Over the past 20 years, we have really been harvesting the power grid in terms of new construction, especially transmission construction. Now infrastructure is declining while expectation and load demands are steadily increasing, therefore, it is fairly safe to say that without looking at new ways of distributing energy, we could definitely run into reliability problems in the future,” added Malcolm.

Even though some companies tend to be optimistic regarding short-term smart power grid implementation, the reality of it, however, is that it could take up to 20 years to fully bring to market. Nevertheless, this should not prevent companies from researching and testing the technologies needed, even if only to have certain pieces implemented by the 5- and 10-year benchmarks.

And while this might still appear to be a daunting task to some, many feel that by combining an industry-wide support infrastructure; companies willing to take some risk and become early adopters; and regulators and legislators promoting research allowing companies to take steps toward investing, it will be possible to have today’s power grid ready for any energy crisis that may lay ahead. 

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