“Smart grid” is a nebulous term spanning various functionalities geared towards modernizing the electricity grid. At its core, a smart grid utilizes digital communications and control to monitor and control power flows, with the aim of making the power grid more resilient, efficient, and cost-effective. Some of the desired functionalities include:

• Knowing the status of the power system in great detail and granularity (ideally in real-time)
• Reacting to any changes in supply (disruptions) or demand
• Enabling small-scale (distributed) storage and power generation (especially renewables)
• Controlling loads as per either operational conditions or financial incentives (through, e.g., time of use or real-time pricing)
• Enabling new solutions for improved customer service, reliability, and future offerings

Smart grids are still under evolution, and different utilities will need different solutions as per their underlying infrastructure, legacy requirements, and business case. Most ingredients of a smart grid exist today, but have not been fully packaged into integrated solutions. The price points also need improvement, especially for residential deployments and developing country roll-outs (where the per user loads are lower). Despite all the challenges, there are large benefits to smart grid technologies, especially as the solutions mature and volumes grow, which will be spurred by the adoption of standards. Smart grids will be an important enabler to make the power system more environmentally sustainable, and represent an opportunity for developing countries to leapfrog in the growth of their power sector to more manageable, reliable, and scalable designs.