The buzzwords “smart grid” have been floating around in environmentalist circles, national security circles, and it’s even made an appearance in urbanist media. Hype surrounding the “smart grid” claims major environmental benefits, increased affordability, and energy security.

So, what is the “smart grid” and what does it look like?

Broadly speaking, “smart grid” refers to the technology that digitizes our traditionally analog grid and evolves our electrical grid so that it can accommodate communication devices and software. 

The United States Department of Energy defines a smart grid as an “intelligent electricity grid—one that uses digital communications technology, information systems, and automation to detect and react to local changes in usage, improve system operating efficiency, and, in turn, reduce operating costs while maintaining high system reliability.”

At home, Seattle City Light has rolled out some smart grid technology into its service area. Our utility’s smart grid tech comes into the form of advanced metering infrastructure (AMI). AMI is a combination of smart meters, communication networks, and information-management systems. 

Transmission lines power substation where electricity is transformed into lower voltages. Distribution lines then serve customers and advanced meters feed collectors than send encrypted data beack to the utlity. (Courtesy of Seattle City Light)
Courtesy of Seattle City Light

Installation of this system is supposed to reduce the environmental impact of the utility. Bimonthly in person readings are being replaced with multiple communications a day between a smart meter and the utility, eliminating much of the utility’s transportation needs. 

AMI will also improve customer service and grid reliability for consumers. Seattle City Light have better monitoring of interruptions and irregularities, allowing their crews faster response times and greater preventative capacities. Additionally, advanced metering should improve bill accuracy, a much-needed improvement after the debacle and lawsuit after the launch of Seattle City Light’s new billing system.

Advanced metering is just a member of a collection of “smart grid” systems. All smart grid systems are essentially just a few component layers added on to a conventional grid system.

New hardware layers include automated/digital meters, sensors, new controls, and communications devices. Overlaying that hardware are tiers of software involved in combination of administrative, analytical, controls, and customer service tasks. 

These new layers grant our electrical grid greatly enhanced capacity to meet our progressively more complicated energy needs and protect our energy security. They can create platforms where utilities, consumers, and other parties can innovate to improve affordability, reliability, resilience, and environmental friendliness of our electrical infrastructure and supply.

AMI is a smart grid system that primarily collects information. Other smart grid systems not only collect data, but also assemble, display, and analyze information; receive information and control the behavior of devices to achieve a goal; generate, store, or reduce demand for electricity. Smart grid systems that do these operations include:

  • Fault location, Isolation, and Service Restoration
  • Advanced Pricing
  • Grid and Equipment Health Monitoring
  • Microgrids
  • Distribution Automation
  • Distributed Storage

While Seattle City Light’s AMI system isn’t the most advanced system, it does provide valuable insight into the benefits of digitizing our electrical grid. The primary effects that AMI and other smart grid technologies create are reduced greenhouse gas emission and improved grid reliability and resilience, all of which reduce costs.

Modernizing our grid for renewable generation

Incorporation of electric intelligent components in the electrical grid has enabled the grid to adjust to the evolving electricity market. Traditionally, our grid has been designed to transport electricity generated from central power plants to consumers. Power flows have since changed with greater distribution of power generation and energy storage.

In cities, distributed power generation often refers to residential solar. These solar systems are often small scale, and privately owned and operated, a stark difference to traditional central and large-scale energy producers. 

Traditional utilities are often wary of connecting distributed energy resources into the grid over safety, grid stability and operation, and pricing concerns or difficulties. The amalgamation of typically automated monitoring and controlling components in a smart grid allows it to manage distributed generation.

Improved information, and control over electricity could enable real-time pricing and packaging of electricity products. Consumers could gain choice over what kind of electricity they purchase, which in turn grants suppliers further incentive to build that kind of generation. Demand for renewable generation could be made tangible with this kind of electricity marketplace.

Distributed generation viability and the existence of large-scale smart grid infrastructure enables actors of any scale to invest in electrical generation. If regulation allows for it, marketplaces could be built onto smart grid systems and provide further economic incentive for private individuals or organizations to operate energy generation and storage systems.

This marketplace could also price in variability, a trait of ever-fluctuating resources like wind and solar. Currently, utilities have to maintain an equilibrium of electricity generated and supplied because unmet demand leads to unintentional brownouts that could disrupt critical uses of electricity. 

A smarter grid accommodates variability by dynamically accessing diverse electricity resources. Utilities could make discounted rates for degrees of interruptible electricity an option, negating worries of variability affecting critical services. This way, during sudden drops in generation, electricity sent to interruptible areas or stored electricity could be diverted to priority consumers. 

Logistical capabilities and efficiencies 

Alongside the capacity to integrate distributed energy generation and energy storage into our electrical grid system, smart grid technology works to optimize all accessible components. This not only produces environmental benefits, but also monetary savings.

The most direct greenhouse gas (GHG) reduction from smart grid technology is reduced vehicle miles traveled by utilities. Smart meters and digital communication remove the need for a utility to dispatch meter readers. Equipment health monitors optimize maintenance of the grid, further minimizing vehicle miles traveled by maintenance workers.

Other GHG reductions come from smart grid applications that optimize the benefit that suppliers and consumers get out of energy infrastructure. GHG reductions of energy storage and renewable generation can be maximized with applications that are exclusive to smart grid systems.  

A smart grid can communicate with electricity energy storage systems (ESS) to deliver the information needed for an ESS to autonomously conduct demand-shifting energy services. These services include load leveling, and peak shaving. They reduce GHG emission by combating the need for peaker plants. 

Peaking power plants or peakers turn on when demand for electricity exceeds the capacity of base load plants and other energy sources. Peakers are often carbon-based and expensive to operate. Costs of peaker plants raise the cost of electricity 30% to 70% based on demand spikes.

Natural gas is most common fuel for peaker plants. Meanwhile, renewable resources make for poor peaker fuel as they cannot generate a vast amount of energy on a whim.

Smart grid enabled energy storage systems can erase the need for peaker plants by providing services that shift the demand vs time curve. These services effectively shift demand in a manner that levels off electricity needed by electrical plants to the point where only base load is sufficient. 

Courtesy of Next Kraftweke. Note that prices increase with demand, which is due to the utility having to access more expensive energy sources to meet demand
Courtesy of Next Kraftweke. Note that prices increase with demand, which is due to the utility having to access more expensive energy sources to meet demand

Peak shaving with ESS just involves using storage energy to smooth out and fill in electrical demand to match base load generation during periods of peaking demand. Load leveling services go further; they purchase and store electricity during periods of low demand and lower prices and then fill the niche that a peaker plant would take during periods of high demand. 

A digitized grid system is required in order to autonomously coordinate operations between generation and storage systems. Robust automation will be needed to ensure that load leveling, and peak shaving occurs smoothly. Additionally, advanced algorithms can be utilized to optimize for cost and emissions.

Demand shifting services are increasingly important as great temperature variances from climate change affect heating and cooling habits. Rising temperatures will require either more peaker plants or more energy storage systems. 

Softer smart grid services may also have a demand shift effect. Advanced metering and communications will inform households of their energy usage and energy costs on a 24-hour scale. This could help reduce electrical demands during their traditional peaks by giving households monetary incentives to time-shift their electrical usage. 

Energy Security

Also bolstered during the adoption of smart grid technology is the security of our energy supply. As we grow increasingly dependent on electricity, increasing our energy security is paramount. Smart grid technology improves our energy security by improving the reliability and resilience of our electrical grid.

Reliability refers to how adequate, safe, and stable the flow of electricity is. This indicator is improved by smart grids through real-time monitoring and communication between smart grid components. It is also bettered with the increased pool of energy resources that a smart grid can accommodate.

Grid resilience comprises of the preparation for, operation through, and recovery from system interrupting events. Data collected from monitors can be used to create models and simulations of outages to train with, improving preparation for large outages. Equipment health monitors can guide utilities crews to quickly respond to outages and hasten recovery.  

The technology also fosters a stable and distributed source of electrical generation and storage, which prevents any singular points of generation failure for significantly impacting supply. This is in clear contrast to traditionally centralized generation, transmission, or distribution, in which failure would be catastrophic.

Some definitions of energy security have expanded to include energy affordability. Removing the need for peaking power plants, a falling cost for renewable generation, and expanded access of the grids to more suppliers further augments energy security gained from smart grid infrastructure.

Barriers and Concerns

As with any major infrastructure project, grid modernization is an expensive task. Seattle’s AMI project ended up costing more than $100 million, after going 20% over its original $84 million budget.

That $100 million is marginal when compared to the 2011 estimate by the Electric Power Research Institute that priced a “fully functioning Smart Grid” at $338 billion to $476 billion. That institute does also estimate that an investment of that size could net a benefit-to-cost ratio of 2.8 to 6.0.

Such an expansion to our grid infrastructure also challenges the role of our utilities. Dispute between a generator and a utility could occur if the utility seeks to curtail a generator’s output for operational stability. New policy must handle the governance on diverse ownership stakes of distributed energy resources.

Tension also arises with the mass collection of usage data by smart grid tools. Utilities will also have to deal with vast amounts of potential sensitive data usage that inflames privacy and cybersecurity concerns. 

In 2018, the Seattle City Council passed a law to protect utility customer’s personal data, during the controversial roll out of the regional utility’s smart meter program. A more elaborate grid will likely harvest even more sensitive data, which demands an equivalent privacy policy. Progressively more vigilant cybersecurity measures would also be needed to protect that data. 

Cybersecurity will need to be addressed even if we don’t upgrade our grid; it’s not just to protect our data, but also to maintain the integrity of our grid. Russia’s attacks on Ukraine’s power grid illustrate the importance of protecting our electricity dependent way of life. 

How we can continue to modernize our grid

Smart grid projects come in packages of varying costs. Smart meter/AMI infrastructure has already been widely deployed. In 2017, nearly half of American electricity consumers had smart meters. Locally, Seattle City Light is continuing to modernize our grid with a mircogrid demonstration in the works.

Microgrids are a hyper-local application of smart grid technology that create a small and contained system capable of working in tandem with and independent of the wider grid. They are smaller increments of smart grid adoption that may be more palatable for local governments in the United States.

During times of economic distress, infrastructure is a dependable option for economic stimulus. Smart grid infrastructure could spur additional investment by enabling further distributed generation investments. Not only could smart grid infrastructure revitalize our economy, but it could also boost the adoption of green generation.

Smart grids can be a vital foundation for our energy infrastructure. They are critical to extracting the most value out of the renewable generation and storage systems that environmentalists champion. They are also practical, potentially reducing electricity cost and protecting our vital electrical supply.

We hope you loved this article. If so, please consider subscribing or donating. The Urbanist is a non-profit that depends on donations from readers like you.

Shaun Kuo is a junior reporter at The Urbanist and a recent graduate from the UW's Jackson School. He is a Seattle native that has lived in Wallingford, Northgate, and Lake Forest Park. He enjoys exploring the city by bus and foot.