Smart grid is an evolved grid system which utilizes digital technology to provide economic, reliable and sustainable electricity, through two-way communication between consumer and the power provider. It provides several economic and environmental health benefits such as more efficient transmission of electricity, reduced operations and management costs for utilities, quicker restoration of electricity after power disturbance, increased integration of large-scale renewable energy systems, lower power costs for consumers, better integration of customer-owned power generation systems and improved security.
Rising demand for power due to higher distribution and transmission loss is the prime factor fuelling the growth for smart grids market. Enhanced efficiency along with rising security, stability and quality of power supply has also been stimulating the smart grid market.
A smart grid market can be segmented on the basis of several key technologies such as advanced metering infrastructure also known as smart meter, distribution intelligence, communication technologies, software and hardware and transmission upgrades.
As opposed to traditional grid’s one-way transmission process, smart grid uses two-way communication, courtesy smart meter, which helps power providers to automate billing data collection and detect outages to dispatch repair crews to the correct location faster. In addition, smart appliances can communicate to smart grid through smart meters and can be instructed to defer their operations from a peak demand time to a lower demand time.
In addition, smart grids are suitable for integration of renewable energy, as a smart grid can reduce power demand quickly when the power dips and can have more storage capabilities to absorb excess wind or solar power when it is not needed. Smart grids can also leverage the other upcoming trends such as plugin-in electric vehicle and home-generated energy through solar panels and natural gas to keep the power supply uninterrupted.
Power and utilities companies across the globe are shifting from legacy grids to smart grids, but lack of interoperability is the key factor limiting the growth of the market.
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