Grand Coulee Dam spillway in July 2009 Smart grids are the future of electrical distribution. The current electrical grid is a bit like water. There's a certain amount of power on the grid and it flows where spouts open -- or where switches flick on, as the case may be. Smart grids, however, offer the promise of a more efficient electrical system. These grids rearrange themselves to put power when and where it is most needed.

The drive to move toward a smart grid is motivated by four main concerns: First, to make the existing electrical grid more efficient, safe and reliable. Second, it allows for greater choice on the part of a consumer, making it easier for electrical customers to opt for alternative, renewable and sustainable energy sources. Third, a smart grid is less centralized. This allows for customers to be both consumers and producers of electricity (for example, homes producing excess amounts of solar energy). Finally, a smart grid holds the promise of a boom in green jobs creating the infrastructure. So the smart grid is useful for things other than saving energy and lowering electrical costs.

Another benefit of the smart grid is the self-repairing aspect. The smart grid can anticipate supply and delivery problems, find away around the problem and maintain a steady supply of electricity. This could potentially end or significantly reduce the annoyances related to losing power. Perhaps more importantly, a smart grid can also be an issue of national security. In a world where hacktivism and cyber attacks are more and more prevalent, the smart grid acts as a first line of defense against the possibility of hackers attacking and crashing electrical grids.

Naval District Washington (NDW) officials present their smart grid pilot to John Conger, Assistant Deputy Under Secretary of Defense for Installations and Environment In terms of saving energy and moving the country toward renewable energy, there are already some rousing success stories. You wouldn’t think of Texas as a renewable energy powerhouse, but ERCOT, a grid operations firm in the Lone Star State did. This led to Texans using record amounts of wind power, a total of 22 percent of load. One can easily imagine the impact on the environment and the economy were all 50 states to follow suit.

One potential problem moving America into the smart grid era is regulation. The regulatory framework in the United States is decidedly in the 20th Century, not the 21st. Complicating matters is the nature of America’s federal system: There are currently 50 different sets of regulations, meaning that there is no easy fix for the entire country. While those in the smart grid community have been quick to point fingers, there is generally very little follow up when it comes to actually changing regulatory frameworks to reflect new realities. The industry doesn’t necessarily seek deregulation per se. Rather, smart grid firms want a set of regulations that recognize current trends and innovations in electrical distribution systems.

Korea's Smart Grid Expected Result in 2030 On the positive side, there are no shortage of companies wanting to get into the smart grid business. Itron is in the metering business, finding solutions for how to meter and monetize the new technology. Itron leads the way with radio mesh technology designed to allow quick communication between smart meters. San Jose’s Eschelon Corp. is leading the way in building networking and management, a crucial component of getting customers on the smart grid. eMeter, based in San Mateo, is helping to integrate smart grid data to handle customer account management, billing and a variety of new uses expected to arise from the new way of distributing power.

The scrappy startups will have some stiff competition. More established companies like Google are also getting into the act. PowerMeter from Google, a home energy management platform, is at the prototype stage. Cisco recently partnered with the City of Barcelona to make the latter a model of sustainable energy for the future. Cisco has also partnered with Miami to bring residential smart meters to the city. Finally, Cisco’s EnergyWise platform works to reduce energy consumption on what Cisco knows best: phones and computers.

Smart grid technology represents a stunning, futuristic alternative to the current method of distributing electricity. It’s also very much in the Zeitgeist at the moment: With everything going “smart,” “cloud” and “Web 2.0,” the electrical system remains very much in the same state it was 100 years ago. A smart grid, with all its benefits, would stand as a significant step forward for innovation, as well as the game changer in the field of alternative, renewable sources of energy. When one considers the benefits, it’s hard to say no to the smart grid.