Climate change is currently one of the biggest worldwide issues we are still struggling to find ultimate solutions to. If the level of CO2 emission continues to increase at current rates, the worldwide average temperatures are estimated to go up by 1.4° to 5.8° C by 2100 _{(Source : Intergovernmental Panel on Climate Change (IPCC)}

The massive energy production from fossil fuels has been one of the main causes of global pollution. In America, this comes from coal (46%), natural gas (21%) and nuclear(20%) while renewable energies such as wind and solar only contribute 5%.

To control the temperature increase all over the world and limit it to at least 2°, the rise in global emissions should have been stopped by 2015 and continue to decrease by 45% by 2050. Based on statistics, emissions from energy production causes 80% of the amount of CO2 globally.

So how smart grid and Internet of Things can help to solve the problem?

What is Smart Grid ?

A Smart Grid is an innovative electricity network of computers and power infrastructures which can supply electricity to consumers via two-way communication between the utility and its customers.

The system is able to monitor, analyse, control and communicate to improve energy supply efficiency, reduce cost and usage waste and increase the reliability of the power supply system.

The sensing along the transmission lines is what makes the grid smart. It consists of many attributes including computers, controls, automation and advanced equipments working together.

Smart Grid Model

There are Bulk Generation, Transmission and Distribution sections and four main domains : Market, Operation, Services Provider and Customers.

The Bulk generation is more advanced than the traditional generation since it is able to generate large renewable power plants from variable resources such as wind or solar power, which help to increase massive amount of clean energy.

The Transmission domain will process the variable types of energy and transfer to the distribution which is the most important part. It manages power flows and provides the amount of energy based on real-time demand which results in less power losses and more cost efficiency.

Estimation of Smart Grid benefits

For household users, Smart Grids can help to manage energy usage which results in cost reduction. Customer can access to their data to know which rooms or even machines consume the most electricity. Moreover, smart home grids can even generate, store and sell power back to the city grid.

For industrial benefits, the technology enables time-of-use pricing which will charge high fees during peak time. This also improves the capacity, energy distribution and control operation failures better.

From national perspective, the Smart Grid can reduce emissions, combat climate change and gain energy independence which is important for countries like Singapore.

**Based on a study from Electric Power Research Institute (EPRI) Smart Grid can help to reduce greenhouse gas emissions by 13% to 25%, which is equal to taking 1-2 millions cars off the road.

Moreover, the Smart Grid technology can cut air pollution from the electric utility sector from 30% by 2030 which can save 34,000 deaths annually.

Thanks to demand response features in the Smart Grid, it will help to reduce total energy consumption by 4%.**

What now?

Many Smart Homes and Smart Cities are being tested around the world. However, the majority are being tested in Europe. The European Commission believes that by the year 2020, 72% of consumers in the European Union will have smart electricity meters installed in their homes.

They also believe that by this time, around 40% of consumers will have smart gas meters installed. Another Europe-wide project led by REE aims to reduce 20% of CO2 emissions and contribute 20% of renewable energy by 2020.

Amsterdam is leading the world in smart city development. The city has been experimenting with offering solar panels and home energy storage units for households which are connected to the city’s smart grid.

The home energy storage units are meant to help lower the stress on the grid at peak hours by allowing users to store energy during non-peak hours. The solar panels also collects energy and then the users are even able to sell that energy back to the grid.

Spain is one of the most successful countries which generates renewable energy with Smart Grid: wind power at 21% of demand and solar power at 4.9% of demand, which met 26% of the country's electricity demand in 2013.

To be honest the most impressive feature for me about Smart Grid is that it allows you to sell energy generated from your house back to the city grid in the future. An energy generator can be a cash machine haha? Energy trading is already applied in the real world currently. Below is the price forecast of energy trading in Italian market.

What Do You Think?

Smartgrid.gov | Techopedia | Reuters.com | Itu.int | Netl.doe.gov | Grupoetra