Intelligent grids pt 2, the impact of IoT



The Internet of Things

The utility industry has always been keen on leveraging technology and managing its services and assets accordingly but as of late, it is feeling some pressure from the exponential growth of technology in the industry. The Internet of Things is a technological development in which everyday objects have network connectivity, enabling them to send and receive data to one another. Of the many sectors and industries the Internet of Things will greatly impact, the energy industry and more specifically, the development of intelligent grids, will feel its effects most intensely. Given that the system on which we currently rely no longer measures up to the realities and technologies of today, consumers and businesses are in search of a new solution.

IoT is introducing that solution. The new realities and capabilities it brings will transform the grid into an energy network called “Ethernet”, as coined by Bob Metcalfe. He explains that this network will transform how we produce, deliver, and consume energy over the next 63 years in order to meet the world’s need for cheap and clean energy1.


Compelling urban life demands

Traditionally, energy grids have been inefficient, unreliable, and costly, pushing consumers and businesses to look for alternatives that are more independent, sustainable, reliable, and economic. This has led the industry to the distribution of local energy management services, batteries, and generators. Energy grids are thus no longer owned, controlled, or operated by electric utilities. As a result, they have become harder to manage and regulate, and have increased our expenses.

Customers and organizations, fueled by the hallmarks and demands of our urban lives, have been yearning to:

  • Overtake outdated grids and systems
  • Qualify the grid for increasing consumptions rates
  • Decrease blackout and burnout periods
  • Have immediate, real-time troubleshooting
  • Have more control over the power bill
  • Reduce expenses for energy producers


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Only through the Internet of Things will we be able to facilitate distributed monitoring, analysis, and autonomous automation of our energy grids. This is possible through the ubiquitous, two way digital communication framework that combines different stakeholders and actors in the system. As stated by the USDOE,

. . . the information networks that are transforming our economy in other areas are also being applied to applications for dynamic optimization of electric system operations, maintenance, and planning.USDOE, 2009 Smart Grid System Report



Novel intelligent grid capabilities

The real potential of IoT lies in the immediate transmission and capturing of information between the several components that make up the system. This includes sensors, networks, standards, and appliances, all of which create an information value loop. The two-way communication system connects smart devices on the side of the utility provider and the side of the consumer, which then enables them to share usable data instantly. Such an information-rich system comprises of3 :

  • Home area networks
  • In-home displays
  • Energy management systems
  • Smart meters
  • Communications networks
  • Data management systems

Machine-to-machine communication did not used to be possible. Today, things such as such as optimizing electricity generation and distribution, boosting efficiency through improved diagnostics, and increasing visibility into grid operations are possible due to the reliable wireless applications and cellular networks available to suppliers and retailers4.

By using these insights, more informed business decisions are made by all grid stakeholders including utilities, competitors, and customers. The interoperability between all stakeholders, from utility to customers, will allow for a more efficient use of resources and new optimization capabilities5.

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Benefits enabled by intelligent grids


For utilities
This new technology allows utilities to shift from one-way analog systems to two-way digital and wireless communication. Thus creating an array of benefits, which include6 :

  • Simplifying the process, and increasing productivity through connecting utility assets
  • Identifying problems before equipment failure through learning about consumption, and production facilities in remote areas
  • Recognizing locations of outage and dispatching nearby crews to fix issues
  • Reducing investment in multiple network communication systems, and allowing for a more efficient reallocation of capital

Implementing these technologies and smart systems provides the utility with convenience as it efficiently manages, responds and better aligns costs, benefits, and risks. Consequently, this allows them to7 :

  • Deliver power more efficiently
  • Improve operations
  • Reduce emissions and management costs
  • Restore power faster

For customers

Above all, the emergence of the intelligent grid empowers consumers. It gives them the opportunity to become a very active part of the system. Smart meters and home energy management systems offer rate and usage readings around the clock, enabling consumers to monitor and adjust their energy usage and consumption throughout the day. Based on the knowledge gained from access to this information, consumers can schedule their most energy-intensive activities during off-peak times. This offers customers the power to minimize their energy bill, given the lower cost of energy used during off-peak hours.

Through IoT and smart technologies, power system loads are balanced and energy networks become less susceptible to blackouts and burnouts. The system is less likely to become inundated with energy demand thus offering more reliable and improved customer service.

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A more sustainable future


In this exciting shift, the Internet of Things stands at the crossroads of innovative technologies and systems, business, public policies, regulations, and consumers. It enables the strategic management of geographically scattered power sources, while efficiently storing and distributing energy where and when it is needed.

The value of the intelligent grid will only be realized once consumers and service providers take advantage of the benefits this technology brings to our system. It becomes our duty to leverage such technology to transform our behaviours and business models. This move towards a more sustainable and clean future, will ultimately changing how our society interacts with its energy. Shaped by reliability, cost efficiency, and energy independence, our energy consumption patterns are on their way to become as unique as the households that rely on them.

Next week The Electric Blog explores the role the utility industry plays in facilitating the adoption of intelligent grids in consumers’ everyday lives. Stay tuned! 

1., 2., 3.,4., 5., 6., 7.