The benefits of a smart grid are fewer and shorter outages, better integration of distributed generation, more information to operate and customers who manage their consumption. Each one is measured with an indicator and proven by comparing against a baseline taken before the investment.
Short answer
The benefits of a smart grid fall into four groups: service reliability (fewer and shorter outages), integration of distributed generation and renewables, better information to operate and customer participation in managing their consumption. The U.S. Department of Energy (DOE) summarizes them this way: grid modernization can significantly reduce the frequency and duration of outages, makes it easier to integrate renewables and lets customers manage their consumption and costs better. To be measurable, each one needs an indicator and a baseline.
Service reliability
This is the easiest benefit to measure. The IEEE 1366 standard defines the reliability indices, such as SAIDI (average outage duration per customer) and SAIFI (average frequency), and distinguishes sustained interruptions from momentary ones with a five-minute threshold.
Three mechanisms act on those indices:
- Locating the fault faster. Fault passage indicators and communicating reclosers show the affected section; the crew goes straight to it.
- Isolating and restoring remotely. With remote-controlled devices, the operator opens and closes points from the control center without waiting for a crew.
- Automating the sequence. FLISR does the above with no intervention. If it restores a customer in under five minutes, that interruption counts as momentary and drops out of the sustained-interruption indices. It is detailed in FLISR: fault location, isolation and service restoration.
The benefit of automation is expressed as fewer customers interrupted and fewer minutes of interruption for those customers.
Integration of distributed generation
When many customers generate, the grid must be able to accept that energy without losing quality or safety. Most utilities set hosting limits per circuit, for example as a share of the circuit, transformer or substation capacity, and check them against the most up-to-date real data available. The exact limits and the procedure depend on the local code and the utility’s requirements.
That is where the benefit of better measurement lies: the better the real minimum demand of each circuit and the output of each generator are known, the less uncertainty there is when deciding whether a circuit can accept more generation.
Better information to operate
With more measurement points, the operator:
- Knows the real load of feeders and transformers, not just the estimated one, and sizes better when to reinforce and when not to.
- Detects equipment approaching its limit or whose behavior is changing.
- Has time-stamped event records to analyze faults with evidence. See time synchronization in substations.
- Reduces unnecessary crew dispatches, because it can switch or diagnose remotely.
Customer participation
A customer with access to their consumption data can decide when to use energy. In many markets there are demand response programs in which customers voluntarily reduce their consumption under critical market conditions, often represented by an aggregator or retailer; advanced metering is what makes it possible to verify that reduction.
Table: benefit, indicator and requirement
| Benefit | How it is measured | What is needed |
|---|---|---|
| Fewer interruptions | SAIDI and SAIFI (IEEE 1366); customers and minutes interrupted | Fault history of the circuit before the investment |
| Faster restoration | Time from the fault until the healthy sections are back in service | Time-stamped records of every event and every switching operation |
| More distributed generation | Power each circuit accepts against the utility’s hosting limits | Real minimum demand and declared generation per circuit |
| Better operation | Remote operations compared with crew operations | Record of each operation and where it came from |
| Customer participation | Verified energy reduction | Metering with remote reading and a consumption baseline |
When the benefit does not pay off
A smart grid is not an obligation to install everything everywhere. Review these first:
- Circuits with few permanent faults, where there is not much to gain.
- No alternate source to restore from: without it, FLISR isolates but does not restore the healthy sections on the other side of the fault.
- Weak communications: a device that does not respond automates nothing.
- Existing equipment not used to its potential: often the reclosers already installed can be coordinated better before buying new equipment.
That is why the prior analysis starts from the real history of each circuit and not from averages.
What a smart grid does not promise
It does not eliminate faults: they happen anyway, because they depend on trees, lightning, aging equipment and third parties. What changes is how many customers suffer them and for how long. Nor does it fix by itself a weak protection design or a grid with no reserve capacity: if the alternate source cannot carry the load, the restoration logic cannot close the tie point.
How the investment case is built
- Baseline. Reliability indices, number of faults and restoration times from the previous period, by circuit.
- Scope in stages. First visibility, then remote control, then automation.
- Later measurement with the same rule. The same indicator, the same circuits.
- Adjustment. The data decide where to continue and where to stop.
To go further, see the general picture of the smart grid, the causes of non-technical losses and how to reduce them and what smart metering is. The phases of an AMI project, from diagnosis to operation, are in How to Implement a Smart Metering Project.
How we help
At Tiza Group we support the technical side of the case: inventory of existing switching equipment, definition of signals and communications, protection settings after reconfiguration and testing of the complete chain. See pre-energization studies or communications engineering and tell us about your project so we can quote it.
Related guides
- What is a smart grid and how does it work?
- Non-technical losses: causes and how to reduce them
- Distribution automation: reclosers and FLISR
- FLISR: fault location, isolation and service restoration
- How to Implement a Smart Metering Project
References
- U.S. Department of Energy, Office of Electricity: Grid Modernization and the Smart Grid (energy.gov/oe/grid-modernization-and-smart-grid).
- IEEE Std 1366, Guide for Electric Power Distribution Reliability Indices.
Frequently asked questions
How do you prove that a smart grid delivers results?
You measure the same indicator before and after, on the same circuits and counted the same way. For reliability, the IEEE 1366 indices are used (for example, customers interrupted and minutes of interruption). Without a baseline from the previous period, the improvement cannot be verified.
Do all feeders benefit equally?
No. A short circuit with few permanent faults, or with a crew a few minutes away, gains little from automation. The benefit is greater where there are many customers, frequent faults, long sections and an alternate source available. That is why you start with the worst-performing circuits.
Does a smart grid reduce energy losses?
It can help measure them and locate where they occur, because advanced metering and transformer meters make it possible to do energy balances by zone. Reducing them depends on what causes them and on the actions taken afterward; metering alone does not eliminate them.