What is the 'Smart Grid'?

"Smart Grid" is the name for a vision of what the electrical power grid should look like, where the grid itself uses modern networking technology to allow different parts of the grid to communicate.

By using the technology, theoretically we could reduce our chances of having a blackout, because we’d be managing our energy use more dynamically. If we reduce the chance of a blackout, we also reduce the need to have a standby power plant to meet peak demand, and that helps keep costs down.

To make the Smart Grid work, we’d have to replace the electric meters at homes and businesses with smart meters – devices that allow home and business owners to access energy prices, which change based on time of day, so that they can run electrical equipment when the rates are low.

The federal government aims to deploy more than 40 million smart meters in homes and businesses, more than 200,000 smart transformers, 850 sensors across the country, 700 automated substations and more. Funding of $3.4 billion for this effort has already been set aside, as part of the American Recovery and Reinvestment Act of 2009. More will be contributed by the industry, for a total of $8 billion.

Smart Grid technical issues

One of the biggest challenges of deploying millions of new devices for a Smart Grid is that each of those devices could become a potential target for hackers. In a sense, a dumb meter is a less hackable meter, and therefore safer. This issue has been raised, and even acknowledged by the national coordinator for Smart Grid interoperability

Another issue is the sheer number of new meters necessary for the Smart Grid, each of which is going to need an IP address. Fortunately, this is one issue that could be solved fairly easily, by using the emerging update to IP called IPv6. IPv6 allows for many more IP addresses than IPv4 does, which should make accommodating the new system relatively straightforward.

Smart switches will also be needed for the Smart Grid, and these switches will have to be more rugged than the type you usually see in home or office environments, to operate in the hostile environments one might find electrical power grid equipment. The good news is that the industrial Ethernet market is well developed and should be able to handle the challenge.

Smart Grid companies

Indeed, Ethernet and IP are well established in the network world, and so you can expect to see the same companies that dominate networking make a play for the Smart Grid. Cisco, for example, has started to place its bets by investing in Smart Grid companies and lining up partners. It recently introduced products specifically for the Smart Grid and expects it to be a $20 billion/year business.

Verizon will be providing wireless infrastructure and management for the Smart Grid. AT&T has gotten into the Smart Grid sensor business. Some of the specifics of which technology will be used are still open, but WiMAX may play a role.

Meanwhile, the Smart Grid has a bit of an image problem among consumers. Does the Smart Grid benefit the provider or the consumer? What’s the benefit of paying up front for smart meters, and for paying more for electricity at peak times? These are questions that need to be addressed.

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