The Smart Grid is a vision of the future electricity delivery infrastructure that improves network efficiency and resilience while empowering consumers and addressing energy sustainability concerns [Gartner IT].
The SmartGrids Platform was started by the Directorate‐General for Research of the European Commission in 2005 [SmartGrids 2006]. This initiative aims at boosting the competitive situation of the European Union in the field of electricity networks, especially smart power grids. The establishment of a European Technology Platform (ETP) in this field was for the first time suggested by the industrial stakeholders and the research community at the first International Conference on the Integration of Renewable and Distributed Energy Resources [Conference 2004].
Although there is no formal definition of a Smart Grid based on its features proposed in the literature, the Smart Grid may be considered as a power grid in which modern sensors, communication links, and computational power are used to improve the efficiency, stability, and flexibility of the system [Rihan 2011].
The 2006 report of European Commission [SmartGrids 2006] describes the vision of the “Future: operation of system will be shared between central and distributed generators. Control of distributed generators could be aggregated to form microgrids or ‘virtual’ power plants to facilitate their integration both in the physical system and in the market.” Figure 1.4 shows how the concept of SmartGrids works.
Figure 1.4 SmartGrids concept.
Source: [SmartGrids 2006]. © European Communities, 2006.
SmartGrids was a new concept for electricity networks across Europe. The initiative aims to respond to the rising challenges and opportunities, bringing benefits to all users, stakeholders, and companies. Also, the Advisory Council of the technology platform SmartGrids proposed new ways for Europe to move forward on improving the efficiency of the generation, transmission, and distribution of electricity. By using cleaner energy resources (e.g. solar, wind), the SmartGrids aims to benefit the European economy and help improve consumers’ needs.
Figure 1.5 illustrates the vision for the future electricity networks. As presented in the [SmartGrids 2006] report, a proportion of the electricity generated by large conventional plants will be displaced by distributed generation, renewable energy sources, demand response and demand‐side management, and energy storage.
Figure 1.5 Future network vision.
Source: [SmartGrids 2006]. © European Communities, 2006.
Figure 1.6 depicts the layout of the modernized electrical grid with voltages and depictions of electrical lines that are typical of Germany and other European systems. A vision of future developments in Europe is depicted at VISION 2050 site (see [VISION 2050]). More European reference publications are available at [ETIP SNET].
Figure 1.6 General layout of electricity networks.
Source: [ElNet 2014]. Licensed under CC BY 3.0.
The development of Smart Grid in the United States is a result of Title XIII of the Energy Independence and Security Act of 2007 [EISA 2007], which provided legislative support for Department of Energy’s (DOE) Smart Grid activities and reinforced its role in leading and coordinating national grid modernization efforts [Mandates 2007].
The smart power grid delivers electricity from suppliers (e.g. central power plant, distributed generation resources such as wind turbines, microturbines, etc.) to consumers using two‐way digital technology to communicate with end loads and appliances at industrial, commercial, and residential premises to save energy, reduce capital and operational cost by improving efficiency, and increase reliability and transparency. Also, the Smart Grid includes control systems, intelligent devices, and communication networks that keep track of electricity flowing in the grid.
Until this point in time, research on the Smart Grid has revolutionized the way the energy trade will be performed in the near future. The Smart Grid concept challenged the majority of the energy trade stakeholders regarding several aspects of the current setting: infrastructure should be reengineered, and new legislation should be developed, and new business models should be implemented, and so forth. Motivations for Smart Grid developments in the United States are also described in [DOE 2009].
As we have seen in the above definitions, Smart Grid and similar names such as intelligent grid, modern grid, future grid, modernized grid, and so on are all being used to describe a digitized and intelligent version of the current power grid.
1.2.3 Drivers for Change
Examples of drivers for change in the electric power system in the United States include:
Integration of Smart Grid technologies (see definition in Appendix B) for managing complex power systems, driven by the availability of advanced technologies that can better manage progressively challenging loads.
Growing expectations for a resilient and responsive power grid in the face of more frequent and intense weather events, cyber and physical attacks, and interdependencies with natural gas and water systems.
Smart Grid technologies and applications encompass a diverse array of modern communications, sensing, control, information, and energy technologies that are already being developed, tested, and deployed throughout the grid. These technologies are divided into three basic categories [NSF 2011]:
Advanced ICTs (including sensors and automation capabilities) that improve the operation of transmission and distribution systems.
Advanced metering solutions, which improve on or replace legacy metering infrastructure.
Technologies, devices, and services that access and leverage energy usage information, such as smart appliances that can use energy data to start operating when energy is cheaper or renewable energy is available.
The Smart Grid vision increases the use of IT systems, networks, and two‐way communication to automate actions that system operators formerly had to perform manually.
Thus, the grid modernization is an ongoing process, and initiatives have commonly involved installing advanced metering infrastructure (AMI) (smart meters) in homes and commercial buildings that enable two‐way communication between the utility and customer. Other initiatives include adding smart components to provide the system operator with more detailed data on the conditions of the transmission and distribution systems and better tools to observe the overall condition of the