Smart grid 101: Smart grid benefits for consumers



Quick Take:  As part of the electric power sector, we understand the benefits the smart grid provides to utilities. We are often less articulate, however, when trying to describe its benefits to consumers. Two articles from provide explanations and factoids you may find useful when communicating with your own customers. - By Jesse Berst


The term "smart grid" describes an electrical grid that's integrated with a computerized, two-way communication network, according to It provides instantaneous feedback on system operations, outages and end use. It uses that real-time monitoring to optimize its performance and anticipate problems. It can also isolate parts of the network to prevent small-scale interruptions from turning into region-wide blackouts.


Self-healing smart grids are invaluable during natural disasters such as Hurricane Sandy, which exposed the grid's vulnerabilities. But many outages in the U.S. are not related to natural disasters. From 2000 to 2004, it experienced 149 outages affecting more than 50,000 consumers. From 2005 two 2009, that number jumped to 349.


Costs versus benefits

Smart grid benefits include:

·      More efficient delivery of electricity

·      Lower operating costs

·      Quicker restoration after outages

·      Reduced energy use during peak hours


In addition, the smart grid has substantial environmental and economic benefits, says Power generation currently accounts for 40% of the U. S. carbon footprint. As renewable energy continues to make up a larger portion of power generation, a smart grid is better able to integrate that intermittent energy.


The total price tag for a U.S. smart grid could total as much as $480 billion over 20 years, or roughly $24 billion per year. But those costs have immediate rewards, according to experts. First is $70 billion per year in reduced costs from outages. Next is an increase in system efficiency of 4.5% – another $20 billion per year. For every dollar spent on a smart grid, the return is conservatively between $2.80 and $6.00.


And the smart grid brings job benefits as well. If, as expected, the U.S. adds another 42,000 miles of high-voltage transmission (roughly 10% of the current total), it would provide more than 200,000 good-paying jobs.


Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.


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