Electricity has traditionally flowed in one direction – from the producer to the consumer. Now, with the development of renewable energies and a corresponding increase in the number of production points, electricity flows have become more complicated. Consumers have become producers and energy has begun to flow in the other direction, from the consumer to the center of the grid. Smart Grids now make possible to permanently maintain the balance between production and consumption based on a hierarchy of energy demand (quantity, location, etc.). These Smart Grids collect and analyze information at all times thanks to numerous sensors and remotely operated control points. Producers, distributors and consumers are therefore connected. Information is processed in record time to optimize energy flows according to production. The famous American essayist Jeremy Rifkin sees Smart Grids as one of the pillars of the “third industrial revolution”.  

Smart meters supporting energy information

Smart meters – a primary information source – have now been fitted in many homes. Brussels has even called for their roll-out throughout the European Union by 2020. The target is to provide them to 80% of European consumers. These meters are effective in two respects. For power grid operators, they allow real-time adaptation of production to demand, as well as measuring their customers’ consumption without a physical reading. Eventually they could also allow their price plans to be refined, with personalized pricing. The main advantage for consumers is being better informed about their own consumption behavior and the resulting costs in order to optimize their consumption periods. They pay for exactly what they consume, power cuts are fixed quicker and reconnection when moving house is completed within 24 hours. In France, Direct Energie and EDF already offer their customers modules to compare their consumption with other households and to program alerts.  

A network going hand-in-hand with the “energy transition”

Smart Grids also allow renewable energy to be fed into the main grid, including wind and solar energy, whose production is inherently very variable. These new, decentralized sources are also called “microgrids”. If a “microgrid” has a surplus supply, the Smart Grid will allocate its power to neighboring areas and vice versa.  

International growth, local approaches

In Europe and Japan, investment priority is given to automation and control of the system to allow it to handle large quantities of renewable energy. In the UK, many companies have installed a smart meter in their premises to reduce their energy consumption. The saved energy is then paid for by the National Grid. In the United States, investments mainly relate to smart meters and the connection of decentralized sites producing renewable energy. Under the Obama administration, annual investment in Smart Grids has doubled to $200m a year, without including R&D, including notably the opening of an Advanced Grid Innovation Laboratory for Energy announced last March by the governor of New York State. The aim of this laboratory will be to advance Smart Grid technologies across the whole of the United States. The Smart Grid market is set to represent a total of around $30bn to $40bn a year (global market size) with growth of 5% to 10% a year.  

Proliferation of complementary initiatives

The development of smart networks has led to other innovations: big data, which allows generation of more precise information on production and consumption of renewable energies, or smart terminals capable of identifying the best time to recharge electric cars (whose batteries represent a decentralized storage solution). Smart Grids, an important component of the larger “Smart Cities” phenomenon, are therefore developing fast and should be further refined in the coming years. Having recently become the target of cyber-attacks, protection of the vast amount of data in circulation within these grids is a vital challenge for the future… According to Pirjo Ojala, head of the M2M Business Line within OT’s Connected Device Makers activity:

“The Internet of Things is central to behavioral changes in our society and is enabling numerous innovations. Smart Grids are among them. They promote responsible consumption of our energy resources and sustainable development. We now need to ensure we secure the multiple data flows generated by all the connected objects which are transforming our daily lives. For example, smart meters send data that should remain private (consumption habits and times) to the main grid. Consumers must therefore be able to install them with confidence, without fear that this information will be hacked.”