Energy consumption is ever increasing. Supply systems can’t keep up with the demand and are maxed out, causing blackouts, unreliable service and headache. There is limited distribution for rural areas and alternative sources are difficult to integrate into the existing network. How are we to provide energy to a growing and more connected world?

A smart grid is a digital electrical grid. It gathers, distributes, and acts on information through meters that communicate via a wireless mesh network in order to improve efficiency and sustainability of electrical services. Often smart grids can reduce peak demand, shift usage to off-peak hours, lower total energy consumption, and actively manage other usage to respond to solar, wind, and other renewable resources. It allows consumers to optimize the generation, transmission, distribution, and use of energy in a more efficient way. Smart grids are slowly being implemented across the U.S. and Europe.

As a broad concept, a smart grid is envisioned to have the following key characteristics:

1. Self-healing: The electricity grid rapidly detects, analyzes, responds, and restores power supply;
2. Digital technology: Two-way communications and ubiquitous metering and measurement enable finer control of energy flows;
3. Integration: The grid accommodates a variety of resources, including renewable energy (solar, wind, biomass and hydro), demand side management and efficient end-use,
4. Empowering: Incorporates EE consumer equipment and behavior in grid design and operation,
5. Power quality: The grid provides quality power consistent with 21st century consumer and industry needs,
6. Cyber security: The grid mitigates and is resilient to physical/cyber-attacks, and
7. Fully enables and is supported by competitive electricity markets

The development community has been slow at discussing and beginning to analyze the impact smart grids could have, perhaps because the outcomes can be varied. The UN Industrial Development Organization (UNIDO) has suggested smart grids for Sub-Saharan Africa as a solution to the lack of access and increasing population. A smart grid could leapfrog elements of a traditional power system and offer where it was impossible before. It can also offer lower rates during off-peak hours, charging for energy consumption via mobile phone. USAID has signed a partnership for smart grid technology development with Russia and India.

The most exciting example of implementation for 2012 is that of Equador. Under the state-owned electric utility, Electrica de Guayaquil, Equador has installed a meter-to-cash smart meter system that uses Itron and Trilliant’s communication platform. The communication network manages energy loses accurately, measuring use and other applications like theft analytics.