Energy suppliers utilizing smart grid technology can customize production to better match customer demand and quickly isolate faults, redirecting energy around them to reduce their impact and avoid massive blackouts such as those experienced in 2003.
Smart grids can support renewable resources like wind and solar, which reduce society’s dependence on fossil fuels. Unfortunately, however, integrating these resources into the existing electricity supply system is challenging.
Improved Efficiency
With rising energy demand and environmental concerns, we face an urgent need to make current power systems more energy-efficient. Smart grids present an attractive option that may offer numerous advantages both to consumers and utilities alike.
Smart grids use digital technology to monitor, automate and optimize electricity systems – increasing energy efficiency while supporting two-way power flow and accommodating renewable sources like solar and wind power – providing real time supply/demand equilibrium.
Smart meters and home energy management systems give customers real-time information on their electricity rates and consumption, giving them more informed energy choices that promote greater energy efficiency and sustainability. Smart meters also allow devices to connect when electricity rates drop lower for cost savings on monthly electricity bills – helping foster an ecosystem promoting sustainable practices and an awareness of sustainable living practices.
Reduced Energy Costs
Smart grids enable bi-directional power flow, enabling end-users to both produce and consume electricity – thus mitigating energy peaks as well as demand/supply imbalances.
Smart grids also possess the capacity to detect and mitigate technical energy losses, enabling more effective usage of the entire grid and thus potentially lowering energy costs by minimizing energy waste, which is estimated at accounting for 8 percent of global electricity usage.
Smart grid technologies enable utilities and grid operators to analyze real-time data to optimize electricity distribution while simultaneously monitoring service disruptions more rapidly, thus reducing outages costs while strengthening resiliency. Their effects on energy prices depend on market factors; deregulated markets offer better opportunities for energy providers to pass cost savings onto consumers while regulatory frameworks must take steps such as cost recovery or rate design into consideration in order to ensure benefits are spread fairly across consumers.
Increased Reliability
Smart grids are built for two-way communication between information and electricity flows – an interesting departure from traditional approaches taken by utilities or grid operators, which typically see when demand increases and then ramp up production at their power plants to meet it.
Energy storage technologies can be integrated into smart grids to store excess electricity for later delivery when demand spikes – helping balance out intermittent renewable sources like solar and wind power.
Ongoing data monitoring allows smart grids to quickly detect and respond to problems, helping prevent outages from occurring or mitigating their effects when they do happen. They also enhance resilience by expediting recovery following disasters.
Utility companies stand to gain from reduced maintenance and distribution costs, improved energy reliability, greater resiliency and lower business interruption rates. As for consumers, they gain greater control of their energy use with lower electricity bills as a result, as well as demand response programs which help the grid reduce fossil fuel dependency.
Increased Flexibility
As the grid moves from managing one-way flows of electricity to integrating new generation and increased demand for it, it requires flexibility from various sources ranging from renewable installations on residential roofs and electric vehicle batteries, through prosumer trading activities (producing and consuming at the same time), and energy trading users participating as prosumers.
Smart grid technology enables devices/appliances to communicate with the power network and react to price signals, so when there is an electricity shortfall they can shut off quickly – helping to balance demand and bring down prices across all connected grids.
However, this shift toward flexibility reflects an overarching vision of sustainable domestic energy consumption and provision that can be translated into everyday energy practices in various ways. Two pilot smart grid projects studied here used time-of-use tariffs with participants receiving smart appliances as well as monitoring devices as examples of such practices.