Smart grids comprise a broad mix of technologies to modernise electricity networks, extending from the end user to distribution and transmission.
Not only can better technologies for monitoring, control and automation stimulate the development of new business models, they can unlock system-wide benefits including reduced outages, shorter response times, deferral of investments to the grids themselves and distributed energy resource integration.
At the end-user level, smart grids can enable demand flexibility and consumer participation in the energy system, including through demand response, electric vehicle (EV) charging and self-produced distributed generation and storage.
Demand flexibility can increase the overall capacity of the system to integrate variable renewables while accelerating the electrification of heating, cooling and industry at a lower cost. Deploying a physical layer of smart-grid infrastructure – underpinned by smart meters – can help unlock these benefits.
Last updated Nov 28, 2019
Investment in smart grids by technology area, 2014-2018
Despite the initial enthusiastic response to smart grids, many signs now point to a slowdown
Although smart grid investments rose 10% in 2018, these technologies still represent a small share of all investment in network infrastructure. Furthermore, despite the initial enthusiastic response to smart grids, many signs now point to a slowdown: funding for microgrids and virtual power plants did not expand in 2018, and investments in blockchain technology plummeted. Further efforts are needed to implement regulatory frameworks that recognise and reward investment in new digital technologies and in other ‘non-wire’ alternatives to traditional electricity grid extensions.