The smart grid is a digital network that unites electrical providers, power-delivery systems and customers, and allows two-way communication between the utility and its customers. Smart grids have the potential to improve the efficiency of energy distribution and usage, both through the grids’ design and through consumer participation. Though smart grids aren’t in widespread use yet in the United States, some U.S. utilities have begun smart grid pilot projects or have deployed smart meters in residential areas.

Increasing electrical demands in the United States sparked governmental and environmental interest in modernizing the U.S.’ existing electrical grid. When it’s fully operational, the smart grid should help utilities meet customers’ power demands and help customers themselves use only as much power as they need. Optimizing the electrical grid may ultimately distribute power more effectively, with less environmental impact. It may also minimize wasted energy that is distributed when fewer people actually need it.

Ideally, smart grids are also intended to work with multiple power sources, including wind and solar sources, and perhaps eventually small individual sources and ones that provide automotive power. New energy sources can be integrated into a smart grid at different times as well.

A smart grid works with a utility’s existing setup. The utility transfers power from plants and distributes it to consumers’ homes and businesses as it would without a smart grid. But when the smart grid overlays the electrical grid, computerized devices monitor and adjust the quality and flow of power between its sources and its destinations. These devices recognize situations such as peak usage hours, when most people are in their homes. The devices can also detect energy-wasting appliances.

The smart grid is also able to respond appropriately to different types of incidents, such as weather issues or failing equipment. The smart grid can identify a piece of failing equipment (or even find a tree branch that’s fallen on an electrical line) and alert the utility. Conversely, the smart grid can extend the life of some equipment: Today, some utilities automatically replace equipment once it reaches a certain age, whether it’s worn out or not. With a smart grid, equipment could remain in operation until a computer detects its failure, thereby saving unnecessary replacement costs. In some cases the smart grid can solve power outages and other service interruptions.

Utilities currently require customers to report most power outages or workers to diagnose problems in person. The smart grid doesn’t require as much human intervention. One example is the residential “smart meter,” which relays detailed power usage information between the utility and the homes it services. Whereas regular meters require an employee to scan meters regularly, smart meters collect data that’s available to customers almost immediately.

The smart grid allows utility customers to play a bigger role in their power usage, and it encourages them to use power wisely and efficiently. For instance, a customer would be able to log onto a utility’s website and track his power usage, learn when rates rise and fall, spot energy drains around his home, and eventually find ways to lower energy consumption.

In turn, modified consumer consumption helps utilities prioritize their power loads through the smart grid.

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What is the 'smart grid'?
The smart grid is a digital network that unites electrical providers, power-delivery systems and customers, and allows two-way communication between the utility