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5 Facts About the Smart Grid: Technology Behind the Clean Energy

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Public awareness of climate change and resource conservation means there is now a growing appetite to learn more about the energy we use, the water we drink and how our choices can impact the energy transition.

So, we from ADD Bulgaria decided to shed some light on the smart grids and why they are considered so crucial for the future of clean energy.

Efficient power supply includes the smart grid as an approach for increased efficiency and security of energy consumption.

The efficiency comes from the complete monitoring of the power supply network by means of measuring and monitoring devices, constantly exchanging data with each other, It is essential for modern companies to be able to monitor the parameters of their electricity network to optimize electricity costs. This also applies to companies that just enter the electricity market in order to be able to prepare load schedules and to anticipate changes in electricity consumption.

⇒ Smart grids are energy networks that can automatically monitor energy flows and adjust to changes in energy supply and demand accordingly. When coupled with smart metering systems, smart grids reach consumers and suppliers by providing information on real-time consumption.

Here are 5 interesting and important facts about smart grids that you need to know:

1. Smart grids are changing patterns of energy generation and uses

Electricity sectors

Smart grids are introduced to overcome the weakness of conventional electrical grids. They allow one to monitor, analyze, control, and communicate within the energy supply chain to help improve efficiency, reduce consumption and costs, and maximize the transparency and reliability of the system.

Implementing digital technologies in electricity sector will improve efficiency or predictive maintenance to identify failure risks before they occur. Managers can make better decisions when they get insights from AI applications that crunch through huge data sets and generate previously unreachable insights1.

Smart grids show information on supply and demand, they are particularly beneficial for the integration of growing amounts of variable renewable energy sources, like solar and wind power, and of new loads, such as energy storage and charging of electric vehicles, while maintaining stability and efficiency of the system. 5 sectors matter according to the Green Covid-19 Recovery and Resilience Plan for Europe Summary report September 2020 – energy, building, transportation, industry and land-use2.

The switch from conventional to renewable resources is bearing the most visible impact not so much on electricity use, but rather on the decreasing consumption of oil and gas for heating and transport purposes.

2. The core of smart grid are the new technologies

There is a very broad range of smart grids technologies. Some of those are commonly applied in many systems today (e.g., smart meters, SCADA and FACTS) and some are still in development or early deployment stages (e.g., PMU, and V2G technologies). Some of the technologies are specific to electricity systems, some cross over into other energy systems and others still are common information and communication technology (ICT).

Transmission systems are typically “smarter” today compared to distribution systems. This is mainly due to the typical scale of transmission systems relative to the respective number of nodes that are managed. Currently transmission systems make up only about 10% of total network length, connecting few, but large customers or generators or interconnecting regional electricity systems. An additional reason for the smartness of transmission systems is that the operators at the transmission level typically have been given the responsibility to ensure reliable operation of the entire electricity system. In order to fulfil this task, adequate management technologies must be deployed on the system.

Comparatively distribution networks make up about 90% of total electricity system network length and a very large share (based on the number of connections) of electrical demand. A smaller scale generation (both renewable and conventional) is connected to distribution networks. In the planning for distribution networks customer demand is often estimated based on historical trends. Distribution electricity infrastructure is typically dimensioned to ensure high levels of reliability under the worst-case scenarios – often referred to as “fit and forget”. While these approaches have often resulted in high levels of reliability in many countries, existing systems may be over-designed or may not be fit for increased demand (e.g., high penetrations of electric vehicle charging infrastructure in urban centers) or impacts of increased distributed generation deployments (e.g., reverse flows from high penetrations of PV generation in rural networks).3

A smart grid is an installation in which consumption levels are always visible – not only through the electricity bill, but because it is possible to monitor and measure the electrical behavior of each of the appliances connected to the infrastructure.

To achieve this, a smart grid incorporates automated computer systems capable of automatically responding to fluctuations in energy production. Thanks to this groundbreaking approach, both the end user and the distributor have more information, which paves the way for a more responsible use of the energy throughout the cycle: all the way from the generation plants to our households and offices.

Among the capabilities of these smart grids, we could highlight that they repair themselves, encourage consumer participation in grid operations, ensure a reliable and premium-quality supply even in the event of leakages, allow the electricity markets to grow, and can be operated more efficiently.

Yet, according to Future of Utilities’ report from 2020 utilities companies have proved slower to embrace the potential of the digital revolution. Utilities have achieved only a moderate level of digitalization, well below that of other industries like banking, for example, which is also a highly regulated industry. The majority of utilities (76%) identify regulation as the core because of their slow adoption of digital transformation, precisely the lack of adequate incentives for such investments.

3. The smart grid is much more efficient than the traditional one

Интелигентни измервателни уреди

Against the uncertainties surrounding the future balance between grid-supplied electricity and self-consumption, smart grids feature a major advantage in terms of reliability. Reliability – along with affordability and decarbonisation – are in fact the main challenges that the electricity sector is confronted with for time to come. Due to the penetration of ICT appliances in businesses and households, the world has become extremely vulnerable to supply interruptions, which can cause considerable costs to individual consumers and the overall economy.

This increased vulnerability of customers has motivated electricity providers to invest in smart technologies like smart metering systems and of course IoT has the potential to revolutionise many aspects of day-to-day life.

⇒ A smart metering system is an electronic system capable of measuring electricity fed into the grid, or electricity consumed from the grid, providing more information than conventional meters. Such system is capable of transmitting and receiving data for information, monitoring and control purpose, using a form of electronic communication and comes with a range of benefits for the energy system and its users. With smart meters, final customers can get as a minimum accurate and regular measurements of their energy use, and get billed on electricity they actually use. Smart meters also open the door to innovations like time-of-use tariffs and dynamic pricing for electric vehicle charging. This is vital because industry forecasters believe that not only will the measures to achieve Net Zero, require a dramatic increase in capacity (from 103 GW today to 268 GW in 2050), but peak demand will double without incentives to reduce it.

This increased connectivity will give the industry an unprecedented level of insight into the real-time performance of far-flung or difficult to access assets, whether it’s sensors in turbine blades or on high voltage lines.

By gathering more data more efficiently, from sensors, drones or other datasets, and then feeding it into advanced models, the digital utility can predict the probability of asset failure and target interventions to those assets that need it most.

The pressure to squeeze every extra watt from the system is now on – and this means no company can afford to ignore the efficiency and resilience gains of investing in sensors, data analytics, automation and AI.

4. Other benefits of the smart grid:

Arista – a new generation software and hardware solution

While summarizing some of its features, we’ve already touched upon several benefits of smart grids, but it is also worth highlighting:

  • The potential energy savings through reduced consumption, because users of smart grids are informed of their consumption and contracted power at all times, and can adjust those parameters to meet their real needs.
  • Better customer services, more accurate energy bills, and easier fraud detection.
  • Increased competition in the energy industry, thanks to lower entry barriers.
  • A more levelled demand curve, and therefore less peaks.
  • A better integration of customer-owned power generation systems.
  • A reduction of carbon emissions through the integration of renewable energy sources.
  • And improved security.

5. Companies are turning the smart grid into services

Hardware and software vendors turn the smart grid technology into management services. Some of the services include home energy management, advanced metering infrastructure, distribution and substation automation communications, asset management and condition monitoring, demand response, software solutions, and analytics.

Energy companies are also enjoying operational savings as a result of data-driven decision-making. One transmission operator achieved a 10 to 15 per cent saving on circuit-breaker maintenance by rescheduling inspection frequency and another saved 10 to 15 per cent of its maintenance spending on distribution feeders by delaying inspections in areas with very low probability of failure. The industry isn’t just chasing ways to save money. The main drivers to improve asset management are the need to address the public’s environmental concerns, whether it’s managing water leaks or accommodating increased renewable energy generation, and the ability to meet increased demand as a result of demographic and environmental pressures.

Smart grids have changed the business model of the electricity industry and the relationship between its players, from energy companies to the final consumer. They are the result of needing to transition from a centralized network to a more distributed one, capable of managing the increasing complexity of supplying electricity in times of the digital revolution. However, utilities companies, solutions and technology providers, experts and government regulators need to unite their efforts and to act now, so that all the benefits are not lost. There is no time to waste.

1 Future of Utilities report 2020 – Future of Utilities Report 2020 | Annual Report | Future of Utilities (
2 A Green Covid-19 Recovery and Resilience Plan for Europe Summary report September 2020
3 Electricity system development: a focus on smart grids overview of activities and players in smart grids