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An Explainer: How “Grid Modernization” Could Improve Your Life

January 14, 2016 - 1:10pm


Understanding how the grid works is the first step to understanding our grid modernization efforts. This new video breaks it down. | Video by Simon Edelman, Energy Department.

This month the U.S. Department of Energy (DOE) is making a series of announcements to support its Grid Modernization Initiative. As we do so, we realize many of you may be wondering: what does “grid modernization” mean?

Let’s start at the beginning. The electric power grid has been rightly celebrated as the single most important engineering feat of the 20th century. The grid powers our homes, offices, hospitals, and schools; and, increasingly, it powers our favorite devices from smartphones to HDTVs. With those and other modern innovations and challenges, our grid will need to evolve.

Grid modernization efforts will help the grid make full use of today’s advanced technologies and serve our needs in the 21st century. While the vast majority of upgrades are implemented by private sector energy companies that own and operate the grid, DOE has been investing in technologies that are revolutionizing the way we generate, store and transmit power.

What will this mean for you? Here are three ways that a modernized grid could improve your daily life:

Lower Energy Bills: The current electric grid is pretty simple: it generates power on one end -- by burning coal or natural gas, harnessing nuclear power, etc. -- and transmits that power for use in homes and businesses on the other end. The process of constantly generating energy and distributing electricity is less efficient than it could be in terms of both costs and energy use. A modernized grid will enable two-way communication and data flows, allowing operators to better understand the grid’s immediate operating status. By having this information, operators can run the grid closer to its full potential and capabilities, resulting in greater efficiencies and reliability. That can mean lower costs for utilities and less consumption and lower bills for customers. With funding from the 2009 American Recovery and Reinvestment Act, DOE helped jumpstart this shift by deploying over 16.6 million “smart meters,” which enable two-way communication. We hope to ultimately see these meters on every home and business in the country.

More Energy Choices: The grid’s current one-way communication architecture is also increasingly at odds with a growing trend in American energy: generation of power from sources outside of electric utilities, like rooftop solar panels. We call this “distributed generation.” If a home or commercial building within the electric grid is generating power via a solar array, grid operators need to balance that generation with traditional utility generation. Grid modernization efforts will make it easier for these intermittent resources to be integrated into the grid -- driving down costs for using these renewable technologies and enabling more consumers to take advantage of them if they choose to do so. In the long-term, as renewables like wind and solar are constructed at utility scale and used by utility companies for mass power generation, energy-storage technologies will also be important. A modernized grid will better capture energy when the wind is blowing and the sun is shining, store that energy for when it is most needed and make sure that the electricity that is needed is available all the time.

Fewer and Shorter Power Outages: Right now, it’s estimated that 90 percent of the minutes we endure without power are caused by problems in the distribution system -- the mix of substations and power lines that bring electricity from power plants to individual homes and businesses -- such as downed power lines during a storm. Outages are usually located based on customer phone calls. A modernized grid will be able to pinpoint outages more quickly and restore service without requiring a call from customers. For example, the expanded use of smart meters allow utility companies to know immediately when someone’s power is out and respond more quickly to address it.  

A modernized electric grid will also help prevent and respond to outages related to the effects of climate change and guard against disruptions caused by cyber attacks. Our vision for grid modernization includes hardening physical infrastructure to withstand and recover from climate-related threats, putting systems in place to restore power more quickly after events like Hurricane Sandy and bolstering our cyber defenses to reduce the risk of energy disruption due to cyber attacks. If, however, an outage does occur, a modernized grid will mitigate the effects.  These improvements will help to ensure a reliable and resilient flow of power to American citizens.

In the race for global leadership in the 21st century energy economy, the countries that pursue these innovations and protect against the full array of modern threats will be strongly positioned to out-compete those that don’t. Although we’ve made significant progress with making the grid smarter -- helping to prevent outages, reduce storm impacts and restore service faster when outages occur -- there’s still plenty of work to be done. The Department of Energy is determined to keep America at the front of the pack, and the initiatives we’re announcing this month will help.