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In the previous post, we discussed the basics of the Smart Grid (SG), its origins, and purpose. But, what exactly makes up the SG and what technology is required for us to have a modernized grid? Additionally, we will touch on the key factors for a full SG implementation in the U.S.

Enough said! Let’s have a casual conversation.

Smart Grid Technology Overview 

To understand SG, we need to examine the technology that makes it smart. But first, let’s define Smart. The term Smart has been used as a buzzword applicable to different technologies in the last two decades. It simply describes a device that has wireless connection capabilities to other devices or networks¹. 

But how do you enable a Smart device?

In general, to enable the SG and its devices, you must have what is referred to as two-way communication, that is, the ability to send information and to receive feedback from devices on the field. These devices must recognize the information, receive it, and act on it². 

One way that Utilities use two-way communication is with price signals. The Utility sends signals to users notifying them that electricity prices are going up or down, which will affect their consumption. Devices such as photovoltaic systems and controls receive the information and they react accordingly by coming online (generating electricity) or shutting off. But, for this to happen, the devices on the field should be able to receive, understand, process, and act on the information and therefore a common “language” is required. On a larger scale, commercial, industrial, residential, and Utility systems must be able to talk to one another in a secure way. That means that protocols and cybersecurity standards are imperative. 

Now, let’s dive deeper, and review the technology components that make up the SG. 

Smart Meters

Smart Meters were revolutionary when introduced in the early 2000’s. Before them, meter readers visited each meter located in residential, commercial, and industrial buildings in a service territory to collect energy consumption data. They did this by directly reading the mechanical meter gauges. This process was usually completed once a month. And, in some areas around the world, this method is still used to collect meter data. 

The next stage for collecting energy usage data was Automatic Meter Reading (AMR). With AMR, a device signals the meter to collect its data. This device could be hand-held and carried around by a meter reader, placed in a vehicle and driven around, or located remotely via a fixed network³. However, AMR was characterized by one-way communication. This meant the meter would send information to the metering device but it could not receive a command based on a predetermined condition. As a result, the Advanced Metering Infrastructure (AMI) was developed.

AMI enables two-way communication and they are mostly what users refer to as Smart Meters ¹. The major advantages for the Utility are to enable near real-time monitoring and data collection to improve operational efficiencies, to reduce costs, and to quickly locate outages or any system tempering. It also enables Utilities to utilize Time-of-Use (TOU) rates, implement demand response programs, and accurately bill their customers. For consumers, AMI gives visibility to their energy data. It also allows them to gain control over their consumption and offers them transparency of billing. 

By 2019, there were nearly 95 million AMIs installed in the U.S.⁴ However, groups across the U.S. have expressed their concerns regarding smart meters. Critics point out possible security vulnerabilities, data privacy issues, and possible health issues based on long-term exposure to wireless technology among others ⁵. But, these claims have not been confirmed. 

“So, installing smart meters makes a smart grid, right?”

Not quite. There are plenty of other technologies participating in a SG and several industries that must join in the effort. Let’s take a look at some of them.

Software for Utility Systems 

To list all systems required for a fully automated SG, we would need extensive research outside the scope of this post. But, let’s briefly discuss a few major Utility systems existing today.

The Advanced Distribution Management System (ADMS) is a software system that focuses on electricity distribution and failure management. ADMS gives the Utility visibility to the grid’s capacity, to electricity demand, forecasting and possible optimization options, and to any issues with infrastructure that would threaten grid’s reliability ⁶. Depending on the vendor, the functions above along with optimal power flow, contingency analysis, fault calculation, and voltage stability are part of one or several software suites.      

The Substation Automation is a software system that encompasses the integration of protection, control, and data acquisition functions for Utility substation equipment into one or a few platforms ⁷. The main goal is to reduce capital and operating costs while gaining visibility to equipment’s health, and to increase reliability. 

In short, different software suites are used by grid operators to gain visibility to assets’ statuses in real time, and to identify and to address any equipment issues immediately.         

Distributed Energy Resources (DER)

A Distributed Energy Resource (DER) is an electrical system whose major function is to generate or to store electricity, and it is characterized by its smaller-than-conventional centralized generation systems ¹. Examples of DERs are photovoltaic (PV) systems, wind turbines, natural gas turbines, battery storage, and electric vehicles (EVs). 

As you can see, a great variety of devices are considered DERs. Unfortunately, this means it has been a large task to consolidate the devices and for manufacturers to agree to a common and secure communication protocol for all. Consequently, organizations like the Institute of Electrical and Electronics Engineers (IEEE) have developed standards like IEEE 1547 and IEEE 61850-7-420 to coordinate the efforts. 

Once the different DER systems are incorporated onto the grid, the Utility needs visibility for their consumption and generation. For example, imagine 100 DER’s start producing electricity and begin sending it to the grid. However, what if at the time they are producing it, this electricity is not needed (low demand)? So, the Utility needs to compensate by lowering their own generation to incorporate the electricity produced by DER’s. This flexibility is achieved through a DER Management system (DERMS) ⁸. This system is in charge of analyzing generation, consumption and DER data to match supply and demand as close as possible in real time.     

Commercial, Industrial, and Residential Buildings.  

Commercial buildings and their automation systems have been shaped by communication protocols such as BACnet and organizations such as ASHRAE, ANSI, IEEE, and ISO. An interconnected building designed for improved user comfort and for efficient operation is called a Smart Building. In commercial buildings, these are characterized by allowing communication and interaction among systems such as heating, ventilation, and air conditioning (HVAC), and power, lighting, and security systems. For Industrial buildings, this could go even further by communicating to process automation systems and by leveraging standards like IEEE 2755.1.  

For residential buildings, a wave of smart devices has entered the consumer market in the last decade. From smart speakers, lights, HVAC systems, to smart fridges, TVs and security systems. While this boom in smart devices is encouraging, interoperability has been difficult to achieve at the residential level. Since residents buy smart devices from various manufacturers, all with their own, individual communication protocols, their devices are unable to communicate with one another and work together on one system. 

Final Thoughts

The SG is the natural next step for our electrical grid. It has several benefits ranging from environmental, reduction of costs, and operations efficiency. A large part of the technology required for a fully automated Smart Grid already exists, but its implementation is still a long ways away. It requires industries, businesses, technical standards, and policy makers to work together. Nonetheless, if we can ensure a powerful, reliable, and clean future, we can say: it was worth the fight. 

“So, if many industries are involved in SG, along with governments and organizations, who will pay for the SG implementation? Also, what happens to the current way Utilities make money if end users can now generate and sell electricity?”

Great questions, and we will discuss that in our next post.

We encourage you to find out more about this topic. Start by checking the following references:

• ¹ Paul, S., Rabbani, M. S., Kundu, R. K., & Zaman, S. M. (2014). A review of smart technology (Smart Grid) and its features. 2014 1st International Conference on Non Conventional Energy (ICONCE 2014). doi:10.1109/iconce.2014.6808719
• ² Fox-Penner, P., Rogers, J. E., & Esty, D. (2014). Chapter 5. The Regulatory Mountain. In Smart Power Climate Change, the Smart Grid, and the Future of Electric Utilities. Washington: Island Press.
• ³ Smart Grid system Report (2009). Washington, D.C.: U.S. Dept. of Energy
• ⁴ U.S. Energy Information Administration (EIA).
• ⁵ Smart meters. (2014). Retrieved March 28, 2021, from here
• ⁶ Baggu, M. (2021). Advanced distribution management systems. Retrieved March 28, 2021, from https://www.nrel.gov/grid/advanced-distribution-management.html
• ⁷ SCADA. (2021, March 01). Retrieved March 26, 2021, from https://en.wikipedia.org/wiki/SCADA
• ⁸ Mohn, T. (2019, September 09). What DERMS technology means for a utility? Retrieved March 28, 2021, from https://energycentral.com/c/gr/what-derms-technology-means-utility