The basic architecture of power distribution has changed little during the past century. Still, technologies have slowly evolved over time, and in the past decade the concept of a smart grid has emerged. Smart grids are the way of the future.
Modern electricity grids are designed as centralized systems in which electricity is typically generated at large-scale power plants and then sent through long-distance transmission lines before being distributed to consumers. As a result, large power grids operate in a predictable manner: Power is generated at a central station and is sent through high-voltage transmission lines to a substation closer to consumers, where the voltage is lowered. The electricity then travels across lower-voltage lines to transformers, which convert it to an even lower voltage before it is delivered to households and businesses. This is a hierarchical, one-way transmission and communication system. In contrast, smart grids act as an enabler, bridging a host of other technologies to slowly convert the power grid from a hierarchical transmission system to one that is increasingly bidirectional.
Smart electricity grids act as technology multipliers, allowing for a more seamless integration of various technologies that each target one or two of the deficiencies in the existing system. It is machine-to-machine communication, channeled through the Internet or another conduit, optimizing the grid's performance. Similar communication already exists on a smaller scale, but smart grids would connect more devices, from washing machines to toasters, allowing them to communicate with one another.
The concept envisions much of the grid's power generation capacity as small scale and located closer to consumption centers. Solar rooftop panels are one example. Bringing panels into a smart grid would catalyze more active communication between the central power-generating sources and local sources, and once power generation was sufficiently distributed, it would make the entire power grid more redundant and resilient. A disruption in one section of the grid would affect a smaller portion of users, and an alternative supply source would be available to limit power interruptions.