This blog is part of the IEEE IoT Brain Trust series. This collection of blogs will explore IoT in the industry. Not only will a modern, intelligent grid for the 21st century require the capabilities offered only by the Internet of Things (IoT), but it can be so much more than we imagine because of it.

The North American electric grid is a patchwork of several large, synchronous AC grids that are loosely interconnected with each other. Some 9,000 utility generating plants produce electric energy into high-voltage transmission lines and substations, which carry electricity to remote load centers where it is distributed to customers through some 145 million retail meters. Each regional grid is centrally monitored and controlled so that the generating plants will meet the aggregate needs of customers within the constraints of the transmission system.

The underpinnings of this century-old grid model began to erode after the OPEC oil embargo in 1973. Economies of scale were reversed by risks, causing the price of electricity to increase. Decades of exponential load growth stalled. New grid investment waned to the point that depreciation now exceeds new capital investment. Not surprisingly, grid reliability declined. Wholesale competition emerged from non-utility owned cogeneration and renewable energy sources.

As if this were not enough, now the grid faces new challenges for which it was not originally designed: increasingly frequent and severe weather events, physical security threats, intensifying concerns about environmental impacts and sustainability, competitive retail markets, and the emergence of distributed energy generation, storage, and management.

The National Energy Advisory Committee concluded in its 2009 report to the United States Department of Energy (USDOE), “Keeping the Lights on in a New World”:

. . . the current electric power delivery system infrastructure . . . will be unable to ensure a reliable, cost-effective, secure, and environmentally sustainable supply of electricity for the next two decades. . . . Much of the electricity supply and delivery infrastructure is nearing the end of its useful life.

Customers are already finding alternatives to legacy grid service for several reasons: economy, reliability, security, independence, sustainability, carbon, privacy. This propels the industry toward a new reality: millions upon millions of small, distributed generators, batteries, and local energy management systems not owned, operated, and controlled by electric utilities.

How can billions of things even be monitored in real time, much less optimized for the most reliable, efficient, secure, and sustainable electric service? Only through distributed monitoring, analysis, and autonomous automation, facilitated by ubiquitous, high speed, two-way digital communications. This is already being done in more and more of our lives and businesses through the IoT. The USDOE recognized the importance of the Internet for a smart grid in its 2009 “Smart Grid System Report” which states,

. . . the information networks that are transforming our economy in other areas are also being applied to applications for dynamic optimization of electric system operations, maintenance, and planning .

While a challenge for most electric utilities, the information and communications technology (ICT) required for a modern, intelligent grid is nearly trivial in comparison to the capabilities of the IoT. By 2008, the number of things connected the Internet surpassed the number of people in the world. Cisco predicts that some 50 billion new connections will be made to this Internet of Things (IoT) over the next decade.

Electric utility customers rely on the IoT for an ever-growing part of their lives and businesses. They will expect to be able to do so with their electric energy supply, management, and utilization. Customers will not be content to be limited to the proprietary, closed-system data, communications, and applications provided by electric utilities.

A severe constraint on the development of a Smart Grid is the lack of integration and interoperability of devices, data, and applications. Islands of proprietary hardware systems communicate through bucket brigades of proprietary telecom networks, creating silos of incompatible data. What better way to accomplish seamless grid integration and interoperability than for the IoT to replace the complex mosaic of proprietary systems and multifarious industry standards that plague the Smart Grid?

Finally, in the long run, there will be no way that electric utilities, their customers, or other market participants will be able to economically deploy, operate, and maintain their own data communications with the capacity, speed, economy, ubiquity, security, and reliability of the IoT.

The IoT will be the new reality of the grid. The electric grid will converge with the Internet. It will become an energy network or “Enernet” as expressed by Bob Metcalfe days after his 62nd birthday, “Over the past 63 years, we met world needs for cheap and clean INFORMATION by building the INTERNET. Over the next 63 years, we will meet world needs for cheap and clean ENERGY by building the ENERNET.”

This is good news for those in the electronics component business. Not only does the IoT mean a growing market for electronic components, it demands innovative new and better components, systems, and applications to integrate with the Smart Grid.