Smart Grid: Challenges and Opportunities

Smart Grid: Challenges and Opportunities

Saifur Rahman, PhD, President, IEEE Power & Energy Society, and Joseph Loring, Professor, and Director Advanced Research Institute, Virginia Tech, USA

Saifur Rahman, PhD, President, IEEE Power & Energy Society, and Joseph Loring, Professor, and Director Advanced Research Institute, Virginia Tech, USA

“Smart grid” is a plan with many elements where monitoring and control of each element in the chain of generation, transmission, distribution and end-use allow our electricity delivery and use be more efficient and robust. It stretches from the end-use customer, to the substation, to the transmission network, to the generating station, and ending at the system load dispatch center. Implementation of this plan helps to make the grid smarter, safer, reliable and more cost-effective using advanced sensors, communication technologies and distributed computing. Notice I have said the smart grid is cost effective, but not inexpensive. In other words, the smart grid allows many services listed below which have a great value to a nation or a region depending on what level of deployment they are ready to launch. Thus it is a “plan” which can be implemented step-by-step.


Some of the high level benefits of the smart grid include the following.

A. Integration of renewables into the electric power grid
B. Time of use metering for load optimization
C. Implementing demand response (DR) programs
D. Remote meter reading and automated billing
E. Remote connection and disconnection of electrical service
F. Faster restoration of services after a disruption
G. Improved security

The plan for the smart grid consists of millions of pieces and parts—sensors, monitors, controls, computers, power lines, software and equipment. It will take years for all the technologies to be perfected, software to be built and tested, and equipment installed, before a smart grid is fully functional. This will take huge investments and time in the industrialized world.

"A smart grid, even partially implemented, can add resiliency to the electric power system and make it better prepared to address emergencies."

A smart grid, even partially implemented, can add resiliency to the electric power system and make it better prepared to address emergencies such as severe storms, earthquakes, man-made disasters, etc. Because of its two-way interactive capacity, and real-time monitoring of the state of the overall system, the smart grid can allow for automatic disconnection of the affected area, and quickly restore power to the remaining part of the network. This minimizes the overall network downtime. In addition, the smart grid allows the real-time monitoring and control of customer-owned distributed energy sources to reroute power to critical parts of the network when utility supply fails.

Fig. 1 highlights the major building blocks of the smart grid. Today, in the most advanced countries, the technology for smart grid exists, standards are being developed, cybersecurity concerns are being addressed (slower than necessary). In addition, rules and regulations about how the smart grid will be operated, and how the consumers will be enticed to participate in the smart grid features (e.g., pricing, power quality, remote monitoring, roof-top solar usage) are being established. There is also a significant push to build consumer awareness through education, because without this the end-user will not experience the added value of the smart grid, they will only see the added cost of deploying the smart grid.

The smart grid has two components – the Electric Power Infrastructure and the Information Infrastructure. The power infrastructure represents the typical network power flow comprising the power network with generating stations, step-up transformers, high voltage transmission lines, receiving stations, distribution substations and the end-use loads – industrial, commercial and residential. The information infrastructure, however, is evolving in many parts of the electric power industry globally. While there is communication between major generating stations and the national load dispatch center (NLDC) and between many substations and the NLDC through power line carriers and fiber-optic communication, there is generally no direct communication between the substation, distribution transformers and the end-use load. Therefore, at the control center there is no information about the transformer loading levels, and the voltage, power factor, power quality etc. at the customer premises. This affects the quality of power at the customer level. By providing this information infrastructure, the necessary data monitoring and control functions can be implemented.


In some countries of Africa and Asia, pre-paid meters are being installed to improve revenue collection efficiency. It should be noted that a pre-paid meter is not a smart meter, but a smart meter can be configured to provide pre-paid meter functions. The key for the smart grid is information infrastructure. Two issues are paramount in this regard. One – secure connectivity between the national load dispatch center and all generating stations and all substations. Two – economic dispatch facility at all power stations. The first one will allow the system operator to know the health of the system in real-time and take necessary control actions. The second one is important because it will allow automatic adjustment of generator outputs to maintain system frequency and reduce losses. Providing smart meters to every customer is very expensive and return on the investment may be questionable. However, dynamic voltage regulation is an area where electric utilities find benefits from smart meter deployment. With this, they can keep track of voltage profiles at the end of long radial distribution feeders and do not have to raise sending end voltages to ensure required voltage levels at the customer end. Higher sending end voltages cause higher power losses. In addition, if there are dynamic and/or time-of-use price of electricity, then smart meters are useful in providing load control opportunities to move load.

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