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Why All the Excitement About the Smart Grid?

A portion of Southern California abruptly lost power on September 8, 2011, inconveniencing some 6 million people. Grid-related outages, not counting those affecting the distribution network during storms, hurricanes and tornadoes, occur with regularity and are more than mere annoyances.

The term smart grid, which has become popular in recent years, conjures images of a power system that is self-detecting, self-healing as well as more reliable and dependable than what we have currently. There is much more to the smart grid than enhanced reliability, even though this remains its main selling point.

Smart grids may be defined as any combination of enabling technologies—hardware, software or practices—that collectively make the electric power sector’s delivery infrastructure more reliable, more versatile, more secure, more accommodating, more integrated, more resilient and more useful to consumers.

But arguably, a lot of time and effort is frequently wasted in finding a definition. It makes more sense to examine what is missing or inadequate with the current grid.

By focusing on what new capabilities or features are missing or will be needed, one can arrive at an appreciation of what the smart grid can or should be, and what useful functionalities it can offer.

In this context, the smart grid must embrace six key driving forces that affect the electric power sector, such as:

  • Reliability – should be self-evident. Why is it that we even need to talk about this issue in the 21st century in advanced industrial parts of the world?
  • Integration – refers to improved balancing of supply-and-demand in real time, a well-known and challenging feature of the electric power system.
  • Intermittent-generation-friendly – able to accommodate renewable energy, now the fastest growing component of new capacity additions in some key markets. The variability of wind and solar generation puts new demands on the grid and is among the compelling reasons for wanting a smarter, more versatile and more integrated grid.
  • DG-friendly - equally able to integrate distributed generation, including not just renewable energy but small gas turbines, low-head hydro, battery-stored energy, fuel cells, and so on. Rapid technological advances and falling costs are sure to bring growing penetration of scattered small generation sources.
  • Two-way – in contrast to the prevailing industry paradigm, where traditionally large central power stations are connected to major load centers through a transmission and distribution network acting as a one-way conduit. The old business model increasingly appears out of synch with growing penetration of DG, increasing amounts of renewable generation, and schemes such as zero-net-energy and passive homes.
  • "Prices-to-devices" enabling – moving beyond the meter into customers’ premises. The grid will interact directly with devices, appliances and controls in ways that are acceptable to consumers and consistent with their priorities, needs and expectations.

A recent book, Smart Grid: Integrating Renewable, Distributed, and Efficient Energy, explores the many dimensions of the issues identified by focusing on the new challenges that these six requirements will place on the future grid.


  • Fereidoon P. SioshansiFereidoon P. Sioshansi is President of Menlo Energy Economics and the editor and publisher of EEnergy Informer, a monthly newsletter. He has worked at Southern California Edison Company (SCE), the Electric Power Research Institute (EPRI), National Economic Research Associates (NERA), and, Ventyx, now part of ABB. He has degrees in engineering and economics from Purdue University.

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About the Smart Grid Newsletter

A monthly publication, the IEEE Smart Grid Newsletter features practical and timely technical information and forward-looking commentary on smart grid developments and deployments around the world. Designed to foster greater understanding and collaboration between diverse stakeholders, the newsletter brings together experts, thought-leaders, and decision-makers to exchange information and discuss issues affecting the evolution of the smart grid.


Jim MaguireJim Maguire is Senior Vice President of Engineering and Grid Segment, at American Superconductor.
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Fereidoon P. SioshansiFereidoon P. Sioshansi is President of Menlo Energy Economics and the editor and publisher of EEnergy Informer, a monthly newsletter. Read More


Jack PokrzywaJack Pokrzywa, as International Director of the SAE Ground Vehicle Standards, is responsible for the overall performance of the SAE Ground Vehicle Standards...
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Mary ReidyMary Reidy is a staff member of National Grid’s Smart Technology Center in Liverpool, N.Y. where she is responsible for identification of...
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Christine HertzogChristine Hertzog, Managing Director of the Smart Grid Library, has over 20 years of experience managing successful introductions of...
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