Why We Need a Smarter Electrical Grid

Even with billions allocated to grid improvements, more funding is needed to make the grid smart enough to reach net-zero emissions.

In many ways the U.S. electrical grid is a marvel of engineering and innovation. A largely decentralized system of thousands of utilities and power plants and millions of power lines, the grid provides relatively affordable and reliable electricity to hundreds of millions of consumers. However, the grid is well over one hundred years old, and unfortunately, its age has begun to show.

One concern is increased grid congestion. In practical terms, congestion means that the grid is currently unable to accommodate many proposed renewable energy projects—a necessity for reaching net zero emissions. As of 2017, over 300 gigawatts of proposed wind and solar projects—enough to power hundreds of millions of homes—were stalled because of transmission grid congestion. In fact, the U.S. Department of Energy (DOE) found that congestion costs grid operators billions of dollars per year and many of these costs are passed on to consumers.

A second concern for our aging electrical grids is the strain posed by climate change-fueled extreme weather. Nowhere was this clearer than the 2021 blackouts on the Texas grid. One estimate of the Texas blackouts put the costs to the state around $100 billion.

These strains on the grid will only increase as the country consumes more electricity. As a result, for the country to make good on our commitments to reduce emissions and tackle climate change, new investments in our electrical grid will be crucial.

Enter the smart grid.

Through the increased deployment of new technology to control and communicate electricity flows, the electrical grid can be modernized and made “smarter.” According to the Energy Department, the smart grid is enabled by new technologies that improve “two-way communication [. . .],  control systems, and computer processing.” When applied to the grid, these technologies improve grid operators’ ability to analyze its stability, identify issues and route power appropriately, provide more information to consumers, and incorporate batteries to stabilize grids.

As a result of these modern capabilities, a smarter grid would better manage and organize all different segments of electrical generation, operation, and consumption. It would also reduce economic costs and environmental impacts by addressing the issues of congestion and reliability.

Fist, a smarter grid would be better equipped to integrate electricity generated by renewable sources such as wind and solar. Wind and solar energy do not generate consistent amounts of energy—a problem known as intermittency. The intermittency problem contributes to the congestion and stability issues for grids as changing weather can impact both the supply and demand for energy. A smarter, automated grid that tracks weather in real time would help to level supply and demand more efficiently and quickly.

Second, smarter grids would also help reduce the chances of grid blackouts and the ensuing economic and public safety costs. Smart grids improve reliability by efficiently managing and routing power. This allows the grid to reduce peak power demands that cause blackouts. It also allows operators to pinpoint the locations of grid failures to determine where infrastructure upgrades could reduce the chances for future blackouts.

Real world attempts at modernizing the grid with smart technologies have produced promising results. In addition to improving grid reliability in the face of a changing climate, examples demonstrate how smarter grids can help incorporate more renewable energy generation. In Fort Collins, Colorado, smart grid demand response resources will help the city incorporate enough new renewable generation to power thousands of homes.

To replicate these successes across the country, all levels of government will need to be more active in encouraging the adoption of smart grid strategies and technologies. The bipartisan infrastructure legislation passed last year offered a good start, allocating $3 billion in financing for smart grid upgrades.

Despite the new federal funds, there is still more to be done. Funding for transmission upgrades often falls short because of issues identifying which parties are responsible for funding transmission upgrades. But there are steps that federal and state governments can take:

  • Continued and expanded federal investments in research and development into new technologies, data analytics, standardization and interoperability, digital security, and more
  • Direct state and federal investments in deployment of smart grid infrastructure, such as battery storage and grid monitoring devices
  • Investment tax credit for smart grid infrastructure spending
  • Tax credits for consumers to install smart meters and battery storage at home
  • State and local land use reforms to increase transmission capacity for increased renewable energy interconnections

In the face of climate change, we need a more reliable grid, now more than ever. The smart grid can help us get there.

Henry Miller

Henry Miller

Juris Doctor Student, Carey School of Law
Henry Miller is a Juris Doctor student at the University of Pennsylvnaia Carey School of Law. He also writes for the Regulatory Review.