Smart Grid

Smart Grid refers to the electric grid enhanced by information technology.


What is Smart Grid?

The Smart Grid is the modernization of the electricity delivery system. A smart grid differs from the traditional grid in that it allows two-way communication of electricity data, rather than a one way flow. Smart grids enable real time data collection concerning electricity supply and demand during the transmission and distribution process, making monitoring, generation, consumption and maintenance more efficient1.

Most electricity grids are based on one-way interaction from the stages of generation to consumption. Smart grids, on the other hand, integrate the action of all users in the power network using computer-based remote control and automation. This two-way interaction is what makes the grid “smart”2. Like the internet, the Smart Grid consists of controls, computers, automation, telecommunication and equipment that work together, but in this case, these technologies work with the electrical grid to respond digitally to our quickly changing electric demand3.

In order for the Smart Grid to work effectively, it relies on an entire system of smart technologies.

Examples of smart grid applications include:

  • Generation – A wide variety of generation sources that can respond quickly to changing demand will be necessary as intermittent renewables become an important component of the energy system. As more energy generation sources are distributed, the Smart Grid will help to effectively connect all these power generating systems to the grid, provide data about their operation to utilities and owners and give information about how much surplus energy is feeding back into the grid versus being consumed on site.
  • Distribution – Distribution intelligence enables an electric utility to remotely monitor and coordinate its distribution assets (transmission lines, substations etc.), operating them in an optimal matter using either manual or automatic controls. The Smart Grid also provides outage detection and response capabilities, sometimes enabling the grid to “self-heal”.
  • Consumption – Computerized controls in your home and appliances can be set up to communicate with the smart grid and respond to signals from your energy provider to minimize their energy use at times when the power grid is under stress from high demand, or to reduce power consumption at high priced hours. Smart controls and appliances can predict consumption patterns and respond to a wide set of pre-programmed variables to curb electricity use and costs.




The modern electricity grid has been developing since the 1950s and has improved as technology advanced. The next modernization of the grid is currrently underway in order to better manage society’s increasing integration of digital technologies and the rising complexities of today’s energy systems as it continues to evolve4.

Smart grids enable society to move from a centralized energy generation system, where electricity is produced at large industrial facilities and is transmitted over long distances to consumers, to a distributed energy resource system, where sources at various scales can be added to the supply mix with limited disruption5.

Smart grids have the capacity to better manage the energy generation of intermittent sources of electricity. Smart grids allow producers to increase or decrease production accurately and predictably in relation to variable generation of renewable electricity, thereby enabling further deployment of renewable energy.

Furthermore, smart grids improve energy efficiency by reducing transmission losses. As electricity is supplied from generators to consumers, smart grids ensure the optimal amount of electricity is dispatched, while also minimizing the distance electricity must travel to arrive to its end consumer6.

Despite the many benefits of the Smart Grid, there are many challenges in its implementation. Smart Grids involve many stakeholders who are in charge of difference aspects of the energy system and unfortunately, the coordination and rate of adoption of the new technology happens at different paces. The large investments required in both the infrastructure and new devices are also a barrier to adoption. Finally, regulatory hurdles and jurisdictional issues present significant challenges that must be overcome.


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