What is the Smart Grid? If you want the official answer, check out the Department of Energy's comments on the Smart Grid. If you want the answer you can explain to your children, stay here! Basically, the Smart Grid is a way for Utilities to better monitor and communicate electricity consumption and distribution to its customers.
Right now, our grid is composed of a millions of miles of power lines connected to a bunch of big, centrally located power plants (about 50% of which is coal). The electricity produced at the centrally located sites is pushed onto the electric grid and distributed to the homes. For the most part, the Utilities dont know where the electricity goes once it leaves the power plant and they don't know how it is used.
How will the Smart Grid help the United States reduce our electricity consumption?
Right now, most of us still have "dumb" analog meters monitoring how much electricity we consume in our homes. Power comes in from the power lines (the grid), spins a little wheel with numbers on it (the more you use, the faster the wheel spins), and once a month a meter reader (you know, the guy your dog always barks at) comes by to check your meter. This is the way utilities have been doing it for decades. You would think things would have improved faster since the first days of indoor plumbing!
With the adoption of the Smart Grid, utilities will be able to see in real time what users who have Smart meters (meters that communicate information back to the utility over a network) are using. Users will also be able to see much more detailed statistics about how they use power. Basically, a smart meter is a TED that you and the utilities use together for your home.
This provides you with a monitoring function so you can better manage your consumption, but it provides the utility the ability to charge a tiered rate for their power. Basically, if you are using power on a hot afternoon (when electricity use is at its highest - mostly due to air conditioners) you will pay a higher rate than if you are using electricity at 3 AM, when demand is low. Why should what you pay for electricity not follow the economic laws of supply and demand?
With your current "dumb" meter, the utility has no clue what times you use your power, they just know the total value you use each month. The smart grid gives them the ability to see when you use that power, but it gives you that ability also, allowing you to know when to avoid using power in times of peak demand. While this is the main function of the smart grid, there are other benefits that will be covered in another blog.
Basically, the Smart Grid helps utilities and users better manage usage of electricity. Enabling us to be a cleaner, more efficient society!