What is a Smart Grid?

Grid refers to electric grid, a network of transmission lines, substations, and transformers that deliver electricity from a power plant to your home or business. Smart refers to the digital technology that allows two-way communication between utility and its customers. On a basic level, this is also known as net-metering.

Therefore, a Smart Grid consists of controls, computers,

and automation technologies that work together with the electrical grid

to digitally respond to real time changes in electric supply and demand.

How Smart Grids Function Differently

  • Transmission of electricity is more efficient
  • Restoration of electricity after storm or power disturbances is quicker
  • Reduced operations and management costs for utilities
    • Decreases power costs for consumers
  • Reduced peak demand
    • Lowers electricity rates for consumers
  • Increased integration of large-scale renewable energy systems
  • Customer-owner power generation systems are more efficiently integrated
  • Advance Metering can collect data in more granular intervals

This is a pie chart depicting paybacks to EPB related to smart grids; smart grid, smart city, smart grids usa, smart grid pie chart

How Smart Grids are beneficial for customers

  • Real time pricing allows customers to save money by using less power when electricity is most expensive
  • No need to wait for monthly bill to check how much electricity is used
  • Appliances at home can be set up to respond to signals from the energy provider to minimize energy use when power grid is under stress
  • Home Energy Management Systems (EMS) allows customers to track energy use detail to better save energy.
    • For example, energy impact of electric products can be seen simply by monitoring through EMS while also switching devices on and off
  • EMS provides the ability to customers to turn on their heater or air conditioner from work when you’re about to go home or keep track of the energy use of specific appliances or equipment
    • like tracking the  energy use of your pool pump, or seeing how much energy you saved with your new Energy Star dishwasher

Smart City Examples in US Cities

image of blue fiber optics used by Colorado smart grid; smart grid technologyBoulder, Colorado 2007

Excel Energy became the first utility in world to create a fully-functioning smart grid city by spending $100 million. Being the first smart city, it had lot of issues and results were not as expected.

The main problems faced were-

  • Fiber optic technology was less ideal than hoped
  • Initial plan was to wire 50,000 homes in Boulder with Smart meters but only 23,000 were installed
  • People were not educated about the new technology
  • Customer interface was not good, many people even didn’t know that they had smart meter in their home.
  • Xcel an investor owned utility viewed its customers as rate payers
    • The alternative is to consider users as community members
    • More focus could have been on lower costs and energy efficiency than profits
  • The utility expenses were more than expected
  • Customers should have been engaged more in their energy use

Chattanooga, Tennessee 2009photo of energy meter; smart grid

Electric Power Board (EPB) completed a project to serve as the backbone for smart grid and provide high speed internet access to customers. They also developed Smart Grid Management System (SGMS), a custom software that helps in analyzing and managing new data.

The main features were-

  • 175,000 smart meters have been installed so far
    • providing two-way communication,
    • giving customer options to manage their electric power usage, help detect theft, and providing remote connect and disconnect operations
  • 1400 smart switches have been installed that allows to isolate power outages
  • Installed sensors that allow for precise voltage management to reduce waste
  • Real time sensor data collection helps to see fluctuations and balances electrical load in response
  • Sensors which indicate approaching weather patterns that influence solar based electric systems.
    • They can give warning 15-20 minutes about cloud cover which will be helpful in getting better idea of what to expect out of solar
  • Installed sensor arrays at substations around the perimeter of the municipal utility’s 600-square-mile service territory.
    • The devices provide real-time data on environmental factors such as sunshine, temperature, humidity and wind as well as the presence of chemicals such as methane and hydrogen
  • Generated 2800 new jobs and helped in adding $865.3 million to local economy by cutting power outages by an average of 60%
  • Reduced the need for “Truck Rolls” that were used to scout and troubleshoot faults which has resulted in a reduction of 630,000 truck miles and 4.7 million pounds of carbon emission

Future of Smart Grids

Islanding and Decentralization

In the future, solar arrays can be used by the community and their neighbors to keep the lights on even when there is no power coming from a utility, which can be made possible with Smart Grid technology. In case of storm until the grid is back online, it will allow a home to grab power from “Distributed Resources,” such as local rooftop solar, small hydropower, and wind projects.

Can Puerto Rico be the next “Smart Grid City”?

Hurricane Maria in Puerto Rico caused the second biggest black out in the history of power on earth. The main problem in Puerto Rico is that- 70 percent of population lives in north but 70 percent of the power generation is in the south. A fragile grid connects the two via tough, mountainous terrain. Puerto Rico can be a potential lab to rethink entirely what a resilient, environmentally benign electrical grid might look like. Before Maria, just 2.4 percent of electricity there came from renewables and it has great potential to grow in future. In my opinion Puerto Rico can be used as a model city for other vulnerable coastal cities, that has smart grid which can withstand hurricanes.

Want to Learn More?

You may be interested (especially if you are a credential holder) in checking out our Continuing Education course all about Smart Cities and Smart Grids. This course helps professionals maintain LEED, WELL, and AIA credentials.


  1. https://muninetworks.org/sites/www.muninetworks.org/files/2017-03-Berkman-Klein-Chattanooga.pdf
  2. https://gcn.com/articles/2018/02/16/chattanooga-smart-grid-research.aspx
  3. https://finance-commerce.com/2013/04/the-lessons-of-smart-grid-test-in-boulder/
  4. https://epb.com/home-store/power/smart-grid
  5. https://www.smartgrid.gov/the_smart_grid/smart_grid.html
  6. https://www.wired.com/story/why-cant-we-fix-puerto-ricos-power-grid/