• Anshita Kishore

Smart Grid Technology

Updated: Jan 8

The energy industry is constantly shifting towards a new era of reliable and efficient power production, and the introduction of smart technologies has given rise to various new opportunities in this field. Anshita Kishore from Lumenci shares a detailed analysis as to how the invention of the smart grid, an autonomous power system, brings a positive shift in the renewable and non-renewable sources to the existing electrical grid using smart sensors and meters. The article enlists recent trends in patents along with the features and market outlook of the smart grid technology.

The energy industry is continuously shifting towards a new era of reliable and efficient power production, and the introduction of smart technologies has provided tremendous opportunities in this field. A smart grid is an autonomous power system that controls efficient power flow in the electrical grid. It monitors the real-time flow of power through automation, including two-way communication between central system software and the sensors present at various points along the electrical grid. A smart grid integrates renewable and non-renewable sources to the existing electrical grid using software, smart sensors, and meters.

Smart Grid Technology

Smart Grid Technology (Source)

The first smart grid definition was given by the Energy Independence and Security Act of 2007 (EISA-2007), which stated that to maintain secure and reliable electricity and meet the growth in electricity demand in the future, modernization in electricity transmission should be supported. This act characterized the smart grid as able to:

  • Increase the use of control technology and digital information for real-time monitoring

  • Dynamically optimize grid operations

  • Integrate and manage renewable and distributed energy sources into the grid

  • Deploy real-time interactive and automated technology for meeting the variable nature of power demand

  • Integrate power storage and peak-shaving technologies using electric vehicles, battery energy storage systems, solar and fuel cells for fast power restoration

  • Develop communication standards for interacting with consumers and infrastructure for integrating smart devices and appliances into the existing grid

Overview of a Smart Grid (Source)

Features of Smart Grid

The shift of the existing grid towards a smart grid creates the following advantages:

  • Reliable

Smart grids use state estimation through phasor measurement units (PMUs) to provide real-time data relating to network parameters that help detect faults and manage the power flow in an adjacent line according to the power flow limits. It prevents the power grid's failure from cascading faults, leading to voltage reduction (brownouts) and power outage (blackouts).

  • Efficient

Real-time monitoring helps in demand-side management by efficiently managing consumers' electricity consumption to reduce peak-time power and, subsequently, costs. It increases generator utilization and reduces power costs and redundancy of transmission lines.

  • Sustainable

The smart grid allows the integration of renewable energy sources, including wind and solar power, which integrates with battery systems to provide energy during peak power demands.

  • Secure

Smart grid technology is based on measurements and state estimation and is sent to a secure central processing unit that controls the voltage and phase angles.

Features of Smart Grid

Features of Smart Grid (Source)

Components of Smart Grid

Measurement and control components need to be installed in the existing grid to convert it into a smart grid. These include:

  • Phasor Measurement Units (PMUs)

Also called Synchrophasors, these sensors estimate the real-time phase angle and magnitude of an electrical quantity. They include a global positioning system (GPS) clock and transmit the time-stamped phasor values of voltage or currents to the control unit.

  • Smart Meters

The measurement of energy used at the consumer site is done with these advanced energy meters. Additional information, including the type of load, voltage, and current levels, is also captured and sent to the system operator.

  • Smart Controllers

These are the controllers used to support integrating renewable energy sources into the grid by controlling the power flow through the grid. It efficiently stores the intermittent energy from renewable sources for future use.

  • Communication Network

The measured values need to be securely transmitted over the network to allow the real-time exchange of data and information over fiber-optic cable, radio transmission, and power line carrier communications.

  • System Automation

This involves the transmission and distribution energy management system, software tools and algorithms for computation and analysis, and operational applications, including Supervisory Control and Data Acquisition (SCADA), substation automation. System automation enables calculation and estimation of system parameters, monitoring and controlling power, current, and voltage levels in the power grid to compute phasor values, and transmitting the respective meters to control the power flow. It enables the communication between two isolated ends of the grid and prevents overloading transmission lines by providing an optimal solution given system constraints.

Components of Smart Grid

Components of Smart Grid (Source)

Market Outlook

The smart grid market is expected to rise at a compound annual growth rate (CAGR) of 20.9% from the current 23.8 billion USD in 2018 to 61.3 billion USD by 2023 due to the increasing environmental concerns and grid modernization increase efficiency. The global smart grid market involves the key companies, including Itron, Inc. (US), Schneider Electric SA (France), Siemens AG (Germany), ABB Ltd. (Switzerland), General Electric Company (US).

Wireless communication is becoming popular in the current age of smart grids and is being designed by ABB Ltd., one of the critical players in the smart grid market. The wireless communication network offered by ABB Ltd. provides smart grid technology with a low operational cost and immediate communications from remote stations leading to reliable and efficient functioning.

Market Size

In the US, the smart grid market is driven by government incentives, funding various R&D programs to the cause. The spending on smart grid technologies in the year 2014 was estimated to be $2.5 billion. In the year 2018, a total of USD 3.4 billion was allocated towards smart grid utilities, considering the penetration of smart-meter to increase to around 71.7% by the year 2020. By the start of 2021, the smart grid technology market is estimated to expand to USD 400 billion, with a compound annual growth rate of 8% worldwide.

The Asia-Pacific region is the fastest-growing market in smart grid installations, as there is a high demand for electricity in the region. South Korea and Japan have the highest smart meter installations, becoming a favorite hotspot for electric companies' investment in smart grid technology. By the end of May 2017, over 10 million smart meters had been installed along the power grid in Japan, and the number has risen to 27 million by the end of 2020. India has a plan to set up 15 "smart cities" by installing around 30 million smart meters, and the number of meters is expected to grow annually at 3% from 2020 to 2025.

The European market has also shown a rise in smart grid investments with a projected 80% replacement of old electricity meters with smart meters. The European market hopes to install around 200 million smart meters by the end of 2020.

Patent Analysis

As of December 2020, Samsung Electronics Co. Ltd is the most prominent owner of smart grid patents. The company owns close to 5,300 patents, over 1600 patents more than the next company, Qualcomm Inc., which owns the second most patents and Huawei Tech Inc. the third most. The figure represents the largest smart grid patent owners worldwide, from 2011 to December 2020.

Top 7 Smart-Grid Global Patent Owners- as of Dec 2020 (Source - Lumenci)

With respect to jurisdiction, China leads, owning more than 10,000 patents, followed by the United States. The figure shows the jurisdiction-wise smart-grid patent distribution of the top 7 jurisdictions including China, the US, WO, Korea, the European Union, Japan, and Australia.

Distribution of Smart-Grid Patents based on Jurisdiction - as of Dec 2020 (Source - Lumenci)

The below graph represents the total number of patents filed 10 years in the field of smart-grid. We can see a steady increase in the number of patents from 2011 to December 2020, increasing ten-fold over the past 10 years.

Yearly Trends in Patents for Smart-Grid Technology - as of Dec 2020 (Source - Lumenci)

Considering the patents' technology, from the year 2005 to 2018, the research is majorly concentrated in demand‐side management and transmission and distribution, together accounting for 82% of all the patented technologies. Electric vehicle and distributed generation technology contribute towards an almost equal share of 9% and 8%, respectively. Patents for storage technology represent just 1% of the patent pool.

Percentage Contribution of Smart Grid Technology towards Patents (Source)

Future Scope

The shift towards smart grid technologies reduces carbon footprint and manages power effectively, thus reducing the average electricity bill. The real-time electricity usage data gives the customer an incentive to reduce electricity consumption by a maximum of 10%. It has been projected that a direct annual saving of 600 USD can be made for an average household. The total value of annual energy savings is estimated to increase over a long period with a savings of 42 billion USD in the first year, increasing to 102 billion USD by year 30.

The Department of Energy (DoE) had allocated a budget of 3.5 billion USD towards the smart grid infrastructure and technology development for 2016-2026. The future of smart grid lies in the utilization of machine learning techniques - for predicting energy consumption and improving grid security, using plug-n-play techniques to give back the energy produced by the consumer via storage cells, along with the implementation of automated controls to detect and isolate faults for "self-healing" of the grid and complete automation of the grid.

In conclusion, smart grid technology innovations and policy frameworks are evolving continuously. Therefore, to optimize the utilization of renewables and improve energy efficiency, and to make the most of smart grid technologies, a framework of business models and market designs need to be developed and deployed. Policy coordination will play a fundamental role in unlocking the full potential of digitalization and ensuring the proper functioning of smart grids.


Anshita Kishore

Associate at Lumenci Anshita is an Associate at Lumenci with experience in Power Engineering and Telecom. She holds a Master's degree in the Department of Electrical Engineering from IIT Kanpur.