The American Recovery and Reinvestment Act (ARRA), unofficially known as the stimulus bill, includes plans for upgrading our current electrical system with “Smart Grid technologies” in order to deliver electricity to consumers in a real time market The ARRA appropriates $4.5 billion to modernize our current grid in order to save energy, reduce costs, and also increase accuracy.

Our current system is continually struggling to keep up with increasing energy demands and increasing supply from renewable energy sources such as wind energy. Test projects have shown that utilizing Smart Grid technologies that incorporate well-functioning hour-ahead and day-ahead markets can make use of variable energy resources such as wind power efficiently and reliably. Additionally, some Smart Grid technologies will help store the energy harnessed from wind power and dispatch it on demand.

Investment in America’s transmission and distribution system has lagged over the last 30 years, which has severely limited the grid’s efficiency and reliability. The U.S has only built 668 miles of interstate transmission since 2000 and it is quickly falling behind the needs of the nation. Additionally, if the grid increased its efficiency by 5%, the energy savings would be equivalent to eliminating fuel and greenhouse gas emissions caused by 53 million cars. The Smart Grid looks to improve upon our system in terms of efficiency, affordability, and reliability.

The Department of Energy (DOE) has outlined five characteristics that will drive the Smart Grid:

  • Integrated communications with real-time information and control, essentially allowing the grid to ‘talk’ and ‘listen’
  • Sensing and measurement technologies that will support faster and more accurate responses
  • Advanced components that will implement findings regarding superconductivity, storage, and power electronics
  • Advanced control methods for quickly diagnosing and solving any event
  • Improved interfaces and decision support to increase human decision-making

Smart Grid technologies will provide an instantaneous monitoring system that will help us to foresee and control future electricity needs. This will ultimately reduce the cost of meeting peak energy demand, which has been exceeding transmission growth by almost 25% each year.

Smart Grid technologies will help transform our current producer-controlled network to one that is driven more by consumers and their needs. By allowing consumers to participate through new technologies, the grid will be able to maintain a higher sense of reliability. This transformation will change the business model and relationships affecting all utilities, regulators, and consumers of electric power.

Complete implementation of the Smart Grid will evolve over time. However, numerous constructive steps are already being taken today to realize this goal. Smart Grid efforts are on track in many states and utilities that are thinking for the future.