Worldwide economies grow on the back of reliable electricity supply chain. Statistics and research show that the electricity supply chain can be transformed through technology application. One such technology that will become instrumental in bringing about transformation in the power industry is the smart grid.
Smart grid is simply the existing electricity supply chain on which the digital technology is superimposed. The digital technology makes the ?dumb grid? more communicative and interactive with the IT system, thus, making it more responsive, adaptive and efficient. At the core of the smart grid is the advanced metering infrastructure (AMI), which refers to the smart meters and the supporting communication infrastructure that allows the meters to communicate bi-directionally.
The two-way communication allows real time information access to both consumers and suppliers of energy. The information display empowers the energy consumers to monitor and control their consumption. The role of consumers in the smart grid becomes much more participative. With detailed information being provided to consumers on real time, utilities can innovate with variable pricing during peak and off peak hours. Some basic benefits of a smart grid are:
Peak load reduction: Smart grids can use time-of-day price signals to reduce the peak load? this is specially useful to Indian utilities coping with urban loads;
AT&C loss reduction: For distribution operations with high losses, companies may consider smart grid components as a way to build in additional communication technology and upgrades;
Self-healing: A smart grid automatically detects and responds to routine problems and quickly recovers if they occur, minimising downtime and financial loss;
Attack resistance: A smart grid has security built-in from the ground up;
Improved power quality: A smart grid provides power free of sags, spikes, disturbances and interruptions. It is suitable for use by data centre, computers, electronics and robotic manufacturing that power an economy.
Accommodation of all generation and storage options: A smart grid enables ?plug-and-play? interconnection to multiple and distributed sources and storage (e.g., wind, solar, battery storage);
Optimised assets and operational efficiency: A smart grid is thrifty on new infrastructure and transmits more power.
A smart distribution network will allow instant outage information to utilities and help them response fast. It also has the ability to handle distributed sources of generation.
With the smart grid, several things will change, including products & process, approach & methodologies, green concerns, supply & demand side management and demand response.
Smart grid deployment is also a key tool in addressing the challenges of climate change. However, a big challenge in India will be the cost of smart grid deployment in terms of capital expenditure. The technology is indeed costly.
Smart grid is a journey with different levels of maturity, and not just a single destination. The utility will need to develop a well planned roadmap, keeping in view their current state, socio-economic needs, business needs, and level of maturity. It is important that we should consider what is there today, how it may migrate, and what the grid needs to become.
The author is the dean and professor of economics and energy at Management Development Institute, Gurgaon.