National Energy Technology Laboratory

Understanding the Benefits of the Smart Grid National Energy Technology Laboratory

Publisher Marketing: Since 2005, a great deal has been accomplished to develop and communicate the concepts that define what we call the smart grid today. A number of studies have concluded that, when viewed at a high level, the benefits of a smart grid far outweigh its costs-that is, when all costs and all benefits applicable to all stakeholders are included. But will the smart grid prove beneficial for everyone? The transition to the smart grid is fundamentally driven by market forces. The smart grid's ability to improve safety and efficiency, make better use of existing assets, enhance reliability and power quality, reduce dependence on imported energy, and minimize costly environmental impacts are all market forces that have substantial economic value. Recognizing these many attributes, the American Recovery and Reinvestment Act of 2009 (ARRA) was designed to provide additional stimulus, to accelerate the smart grid transition, and thereby realize the benefits sooner. As a result, the momentum for a smart grid is large and growing, but if it is to be sustained, the smart grid's value must become crystal clear to all stakeholders, especially to residential consumers. Residential electricity consumers are the force that drives our economy as well as the strongest political constituency. Therefore it is imperative that they clearly understand the values of a smart grid and that any concerns they may have with its implementation are addressed. Without this understanding and alignment, the U. S. consumer will lack the interest and motivation to support this market-based transition. Rather than a supporter, the consumer could instead become an obstacle to smart grid progress. There are two reasons to create a national smart grid. First, today's grid needs to be upgraded because it is aging, inadequate, and outdated in many respectsa "investment is needed to improve its material condition, ensure adequate capacity exists, and enable it to address the 21st-century power supply challenges. Status quo is not an option. Secondly, the benefits of the smart grid are substantial. These benefits will result from improvements in the following six key value areas: "