Smart grids

A smart grid is an electricity network that uses digital and other advanced technologies to monitor and manage the transport of electricity from all generation sources to meet the varying electricity demands of end users. Smart grids coordinate the needs and capabilities of all generators, grid operators, end users and electricity market stakeholders to operate all parts of the system as efficiently as possible, minimising costs and environmental impacts while maximising system reliability, resilience and stability.

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 Jan 7, 2022