Your Energy, But Smarter: Intro to Smart Grids

A detailed exploration of smart grids: understand how they work, their advantages over traditional grids, and their role in reducing carbon emissions.
Your Energy, But Smarter: Intro to Smart Grids
A detailed exploration of smart grids: understand how they work, their advantages over traditional grids, and their role in reducing carbon emissions.
Your Energy, But Smarter: Intro to Smart Grids
A detailed exploration of smart grids: understand how they work, their advantages over traditional grids, and their role in reducing carbon emissions.
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The electricity sector is growing daily in terms of the number of consumers, needs of consumers, energy resources, and new technologies adopted.

We need a new infrastructure to keep pace with all these changes. In order to address climate change, this future network must be smart enough to deliver the lowest energy costs and highest efficiency.

What is a smart grid and how does it work?

According to the Smart Grids European Technology Platform, a smart grid is

an electricity network that can intelligently integrate the actions of all users connected to it—generators, consumers and those that do both—in order to efficiently deliver sustainable, economic and secure electricity supplies.”

Let’s begin by defining the distinction between smart grids and conventional grids.

Structure of a smart grid
Figure 1: Smart grid vs conventional grid, Ref: Smart grid. (2023, September 17). In Wikipedia.

The differences between the conventional electrical grid and the smart grid can be categorised into five major categories:

  1. Generation
  2. Markets
  3. Transmission
  4. Distribution
  5. Consumers


From a generational point of view, conventional electrical grids depend on a few large power plants powered by fossil fuels, such as coal, gas, hydro, or nuclear.

Except for hydro, all the other plants are nonrenewable sources of energy. They are responsible for over 40% of all energy-related CO2 emissions.

On the other hand, smart grids are designed to include distributed generation, which can be non-renewable or renewable energy sources.

The smart grid will not shut down the existing power plants, but they will be replaced gradually by distributed and renewable sources like solar, wind, and biogas.

This distributed generation grid using intermittent resources of clean energy will need different types of monitoring and control.


The energy market in the smart grid age will shift from a central and mainly national market into a decentralised market with new players such as third-party companies that provide operation and monitoring services and energy wholesalers.

In the new smart grid, even the end user can be part of the market and use his rooftop to invest in selling energy to the grid.

This dynamic market requires a high degree of service digitalisation to deal with the different parameters that affect the energy price. It also needs cybersecurity to protect the energy and money flow between the various players in the market.


With the revolution of smart grids, the need for large transmission grids to transfer energy over long distances will gradually vanish.

The generation will be smaller and almost local, reducing energy loss in the lines and transmission line construction and maintenance costs.

Also, the means of energy transmission will change with the introduction of hydrogen and batteries as ways to transform energy. This will give the electricity grid more flexibility and create new challenges.


The distribution lines in conventional electric grids are one-direction, top-to-bottom lines. But in the smart grid, the two-directional distribution lines send and receive energy and data to the consumer.

Conventional meters only read electricity consumption on the property. Smart metres will replace them with new functionalities not limited to input and output energy monitoring.

They can be extended to cope with the dynamic prices of electricity to contribute to the demand-side management functionality on the smart grids.


In the conventional electricity grid, consumption is passive. They only consume energy and pay bills.

In smart grids, the consumers are active

  • They are electricity generators.
  • Their EV batteries contribute to the system’s inertia.
  • And there is a two-way information flow.

Traditional grid vs smart grid

A traditional grid, also known as a conventional grid, and a smart grid are two types of interconnected electrical networks designed to meet the demand for electricity.

Smart grids are an advanced and efficient electrical system that offer improved reliability, lower losses, higher customer satisfaction, and reduced environmental impact.

Here are the key differences between them:

AspectTraditional GridSmart Grid
DefinitionOne-way electricity flow from centralised plantsTwo-way energy and data exchange with advanced tech
CommunicationPrimarily one-way communication for notificationsEnables real-time two-way communication and interaction
Type of GenerationRelies on centralised power plantsIncorporates distributed generation from diverse sources
System StructureHierarchical structure with limited flexibilityNetwork-type structure enabling dynamic energy routing
AutomationManual interventions with limited automationAdvanced automation for proactive grid management
EfficiencyA network-type structure enabling dynamic energy routingHigher efficiency through optimisation and control
ReliabilitySusceptible to disruptions with limited resilienceMore reliable with improved outage management
LossesHigh power losses due to transmission inefficienciesReduced losses through optimisation and regulation
Customer SatisfactionAffected by reliability and service qualityImproved satisfaction with control and personalised services
Impact on EnvironmentRelies on fossil fuels with significant emissionsPromotes renewable energy and reduces environmental impact

Smart energy grid technologies

The smart grid technology involves new physical components, software, and services.

Concepts like the Internet of Things (IoT), artificial intelligence (AI), and digital transformation play a significant role in building smart grids.

Diagram of systems that make up a smart grid
Figure 2: Smart Grid Technologies

Smart grid physical components

Distributed generators (or microgrids) are the smart grid’s building blocks.

They are isolated grids with their own control and then connected to form the whole smart grid. A smart meter measures the exported and imported energy at the connection point.

Smart grids include transmission media that do not exist in conventional grids, such as hydrogen tanks or batteries.

Some sensors should be there to collect the monitored data, such as the solar input and temperature, the EV charging time, and other related monitoring data.

Some control equipment is needed to open or close switches in case of faults. These sensors and actuators will not be the same as the conventional ones but will be controlled by Internet of Things (IoT) systems.

Smart grid software

All the data from smart metres, monitoring, and control systems generates big data. This big data is helpful in energy management and demand response systems.

Putting all this sensitive data on the internet to be controlled through IoT systems requires high levels of security. Unauthorised people should not access these types of data.

Smart grid services

Other types of digital technology related to smart energy grids are

  • Software-as-a-services (SAAS) applications. For instance, business-to-customer (B2C) applications monitor energy prices and optimise to provide the customer with the best pricing.
  • Business-to-business (B2B) applications that manage the relationship between utility companies and energy wholesale companies.

Other business models will develop as the smart grid market expands.

Advantages of smart grid applications

The transformation into smart energy grids has many benefits.

Lower carbon emissions

The position of distributed generators near consumers cuts the energy losses on transmission lines, about 10% of the total losses, even in developed countries.

This 10% saving from energy generators means 10% less carbon emissions.

Energy efficiency

Demand-side management is one of the smart grid functions that can lead to efficient energy use by end users.

Dynamic tariffs encourage customers to shift their loads into high-generation time slots, which creates a win-win relationship for the grid and customers. This leads to more efficient energy use and, thus, fewer carbon emissions.

Artificial intelligence (AI) and the Internet of Things (IoT) can help end users control their loads easily without wasting time and effort.

Flexible power stations

Smart grids deploy medium- to small-sized power stations as microgrids.

The configuration of microgrids gives a high level of flexibility to smart power grids. It can work as a stand-alone unit with complete control and be connected to the whole smart grid to exchange power and data.

Microgrids are faster to install and operate than large conventional power stations, more modular, and more suitable for a distributed population.

Electrical vehicle deployment

Due to climate change and the direction of the world’s zero-carbon systems, electric vehicles are now a must for clean transportation.

Electric cars are not just power consumers in smart grid applications but also part of the energy system balance.

They provide battery energy storage systems that can store surplus energy to prepare for peak demand, and they also provide inertia to the power system. Inertia is needed for the power system to prevent starting from zero power.

In conventional power stations, this inertia is provided by the machines spinning. Yet, renewable energy sources such as solar power have no built-in inertia, so the electrical vehicle batteries emulate this inertia for the system.

The role of smart power grids

Smart grids are the networks of the future and have not been fully implemented on the ground. Still, much research and applications are being conducted on experimental samples and pilot projects.

Economic and technical studies have shown that the smart grid is the ideal solution for feeding our planet with clean, high-efficiency, low-priced energy to meet our current needs and provide the planet’s resources for future generations. 

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Dr Samah Hashim
Dr Samah Hashim is a solar energy teacher and researcher. She shares her knowledge by writing articles and producing YouTube videos.

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