When the worlds first electricity grids were developed a century ago, energy was cheap and abundant, the term climate change hadnt even been coined and grids were centralised systems, with electricity flowing from power plant to peoples homes in one direction.
Today, any one of those homes could have its own power on the roof in the form of solar panels feeding back into the grid, while climate change means there is an urgent need to make the most of the renewable energy those panels produce.
The changes that are coming along, like electric vehicles, like renewable energy, really cant be accommodated by the existing grids, says John Scott , an independent energy consultant and a member of the SmartGridGB forum , which champions smart grid development in Britain . So rather than making the grid bigger and bigger smart technologies allow you to get much more out of what you already have.
Either we have to pay millions to reinforce our current grid to cope with the increased load, or we adopt smarter technology, says Dr Luis Nando Ochoa , a senior lecturer in smart distribution networks at the University of Manchester . By controlling things we can still use the same infrastructure but its now more intelligent and we can defer all this investment, which will be very expensive.
Smart grids are about digitising the electricity network with the flow of data as important as the flow of electricity. The grids depend on smart meters and other intelligent devices in homes and offices that keep power companies informed in real time of exactly how much energy is being produced and consumed and where. The grid technology then draws on this two-way flow of information to match up supply with demand. Its this flow of information between producer and consumer that is the real game changer.
Enel developed the worlds first smart grid in Italy in the early 2000s, installing smart meters in every Italian household. Since then, fledgling smart grids and trials have proliferated. Enel is now digitising Spain , while smart grids already exist in parts of the USA , China and northern Europe .
According to information provider Bloomberg New Energy Finance, global smart grid investment grew to $14.9bn in 2013, with China the largest investor, spending $4.3bn compared to $3.6bn in the US. In Europe , over 3bn has been invested in around 450 smart grid projects since 2002, although the EU commissioner for climate action and energy, Miguel Arias Caete , recently spoke of the need for a colossal 400bn investment by 2020 to modernise the continents electricity transmission and distribution grids.
These are huge costs but the environmental payback is worthwhile. The Climate Group a non-profit organisation that works with business and government to promote greener technologies and policies estimates that, worldwide, smart grid technologies could prevent about 4% of worldwide emissions.
And the intelligence provided by smart grids is not just useful to power companies. Smart grids will be able to interact with domestic appliances, allowing consumers to opt to run washing machines or electric car chargers only using off-peak electricity, helping to reduce peak consumption and cut bills.
Not everyone will choose to use lower tariffs, but if just 10% of a country does that will make a huge difference, says Ochoa.
One big area where smart grids could change peoples daily lives is in transport, by allowing mass ownership of electric vehicles. Electric vehicles are really disruptive to traditional power grids, explains Scott. If everyone in a street plugged in an electric vehicles, youd blow the fuses in the local sub station.
The way around this, he says, is smart charging. Sensors on the network will know when a vehicle is connected. You can then tell the grid when you need the car to recharged by and it will find the cheapest energy available during that period, rather than simply beginning the process straightaway.
On a global scale, while fossil fuels of course remain key to most electricity generation, smart grids will play an important role in helping to decarbonise the world economy, precisely because they can adapt so well to changes in the power from renewables caused by natural fluctuations of sun and wind.
The development of new renewable resources means we need to change how electricity networks are used and designed, says Livio Gallo , Enels head of global infrastructure and networks. We need to move from passive to active, and smart grids can flexibly integrate and manage electricity flows that differ in quantity, quality and origin.
Enel is now working on smart grid projects across Europe and is part of the four-year European project Grid4EU , which is trialling smart grids in various countries with a particular emphasis on energy efficiency and new uses of electricity.
View all SMART GRID Bulletins click here
Enter your email-id to subscribe to theSMARTGRID Bulletins