The Smart Grid Defined

One of the more commonly used yet least understood terms in today’s electric utility vocabulary is the term Smart Grid. Much like other often-used terms, with broader use it now lacks any precision, particularly given the evolution of many related programs and initiatives. Virtually every presentation on the topic starts with a definition of what Smart Grid is relative to the specific presentation and it is an indication of the confusion around the phrase.

In reviewing these differing perspectives, one can quickly conclude that the key variable in defining Smart Grid is the specific issue or topic that is driving a specific discussion, namely:

• Customer involvement
• Reliability
• Deregulation
• Operating Performance
• Energy Efficiency / Demand Response
• Renewable Energy

Though Smart Grid implementations often include advanced metering infrastructure (AMI), meter data management systems (MDMS), home area networks (HAN), supervisory control and data acquisition (SCADA), distribution management systems (DMS), distribution automation (DA), the focus and prioritization will shape the business case, program design, and specific technology choices.

It is also relevant to note that though the starting point and initial focus may vary, the end point tends to be the same, as the needs of the utility, customers and society at large all need to be factored into and addressed by the long term plan.

The Focus Defines Smart Grid

The specific utility objectives or focus is the key determinant of how to best define and implement Smart Grid, as described below:

• Customer Involvement: Smart Grid offers the potential of altering each individual’s energy usage. By equipping the end user with real-time signals (e.g. market prices, load, and environmental impacts), the customer is able to change his/her usage pattern. For this to be effective customers will require easy-to-understand information and rate designs; and equally important, will need knowledge and motivation to alter their behavior. So, the starting points for Smart Grid are technologies that expand the customer interaction and aggressive outreach and communication strategies.
• Reliability: Through myriad of intelligent devices, Smart Grid provides visibility and insight into grid operations, including knowledge of potential failure points as an indication of enhanced and / or targeted maintenance and reliability activities. Specific system measures such as outages, power quality, and network disturbances can be measured / identified; and the evolution into a full scale distributed generation, storage and load management can be realized.
• Deregulation: With electricity deregulated in 13 states and the District of Columbia, Smart Grid technologies can potentially provide more effective and timely information for better market decisions by third-party suppliers and energy users.
• Operating Performance: In the quest to provide efficient and reliable power to its customers, utilities are challenged to optimize their investments in the T&D infrastructure, with particular focus on its most significant physical assets. The use of grid sensors and subsequent improved measuring capabilities enable the improvement in distribution planning, asset management, and overall preventive maintenance regimens, all leading to increased operational efficiencies.
• Energy Efficiency / Demand Response: The key element to entering the Smart Grid discussion through the EE / DR lens is determining the mix of programs using dedicated systems vs. those expected to employ Smart Grid technologies. With the use of voluntary programs, rate-based programs, automated programs, or energy reduction programs, the Smart Grid strategy quickly becomes rather comprehensive with respect to technology deployment.
• Renewable Energy: In the wake of a number of states with renewable portfolio standards (RPS), Smart Grid actions focused on renewable energy will focus on those technologies that facilitate the integration of renewable energy into the portfolio of power generation and the necessary systems to manage the relatively complex transactions.

No matter the starting point, each of these focus areas need to be addressed in any long-term strategy.