Far more than “smart meters,” a fully functioning Smart Grid will feature sensors throughout the transmission and distribution grid to collect data, real-time two-way communications to move that data and electricity between utilities and consumers, and the computing power necessary to make that intelligence actionable and transitive.

A smarter grid refers to the current state of the transformation, one in which technologies are being deployed today or in the near future. The Smart Grid is the ultimate vision – the full realization of everything it can be.

Nationwide, demand for electricity is expected to grow 30% by 2030, according to the Energy Information Administration’s Energy Outlook 2009. Electricity prices are forecast to increase 50% over the next 7 years.

Two-way communication makes the Smart Grid a dynamic, interactive, real-time infrastructure. An open architecture creates a plug-and-play environment that securely networks grid components and operators, enabling them to talk, listen and interact.

Advanced components play an active role in determining the electrical behavior of the grid, applying the latest research in materials, superconductivity, energy storage, power electronics and microelectronics to produce higher power densities, greater reliability and power quality.

Advanced control methods monitor power system components, enabling rapid diagnosis and timely, appropriate responses to any event. They also support market pricing, enhance asset management and efficient operations, and involve a broad application of computer-based algorithms

Sensing and measurement technologies enhance power system measurements and facilitate the transformation of data into information to evaluate the health of equipment, support advanced protective relaying, enable consumer choice and help relieve congestion

Improved interfaces and decision support will enable grid operators and managers to make more accurate and timely decisions at all levels of the grid, including the consumer level, while enabling more advanced operator training. Improved interfaces will better relay and display real-time data to facilitate:

Consumer energy management within the Smart Grid will necessarily include some form of AMI, including but not limited to “smart meters.” On the customer side of the meter, this will enable electricity service providers to signal homeowners and businesses when power is expensive and/or in tight supply,

Either by special indicators or displayed through Web browsers. Another level of implementation would allow the utility to automatically reduce the customer’s electricity consumption when power is expensive or scarce. This will be managed through communication between the smart meter and the customer’s equipment or appliances.

The Smart Grid will make it easier to realize benefits from distributed generation, such as rooftop solar panels, and to implement “net metering,” a ratemaking approach that allows operators of distributed generators to sell surplus power to utilities. The Smart Grid will also manage the connection of millions of plug-in electric vehicles into the power grid

On the transmission side, monitoring and reliability of the Smart Grid will include real-time monitoring of grid conditions; improved automated diagnosis of grid disturbances; automated responses to grid failures to isolate disturbed zones and prevent or limit cascading blackouts; the plug-and-play ability to connect new generating plants to the grid, reducing the need for time-consuming interconnection studies and physical upgrades; and enhanced ability to manage large amounts of wind and solar power. Some analysts believe that deployment of the Smart Grid is essential to the large-scale use of wind and solar energy.