By Gnaneswari Lagisetti

Our current electric grid, built in the 1890s, is a network of transmission lines, substations, generators, transformers, and more that deliver electricity to consumers. Over decades, technological advancement improved the electric grid, which now consists of over 9,200 electric generating units with over 1 million megawatts (MW) of generating capacity connected to over 300,000 miles of transmission lines. But, to move forward and meet the 2050 goals of net zero carbon emission, we need a new kind of system that uses digital and computerised equipment and technology to automate and manage the increasing complexity and needs of electricity in the 21st century. This brings us to the concept of a smart grid. 

A smart grid is a modernised electric grid that uses digital and other advanced technologies to monitor and manage the transport of electricity generation and demand side in the near real-time. This improves the system by making it reliable and cost-effective for transporting the electricity from the plant to houses, businesses, and industries. Like the internet, the smart grid also consists of controls, computers, automation, and new technologies and equipment working together, but here, these technologies will work together with the electric grid to respond quickly to the electricity demand. The main key enabler of a smart grid is the smart metre, which helps to provide information to help improve network management as well as facilitate demand shifting and support distributed and renewable energy generation. 

Smart grid has a lot of benefits such as consumer and customer, wider economic growth, energy security, and low carbon transition. For consumers, it will help them minimise their electricity bills and enable them to control their energy usage by using smart metres which will provide them with accurate energy usage and use energy according to the off-peak and low-cost period. This will also help to create more job opportunities and increase employability. As for energy security and low carbon transition, a smart grid can improve energy security and reliability, make the energy system wider by integrating with renewable sources, and enable the low carbon technology to be deployed and save from carbon emissions. 

Smart grids are complex to build with a lot of advanced technologies to make the system more stable with a two-way interactive capacity between the grid and the users. This system needs proper planning, designing, testing, and investment for them to help with 2050 energy goals. Smart grid funding is designed to increase the electric power system's flexibility, efficiency, and reliability. The below list shows some funding for innovative smart energy systems taken from the Government of UK website, published in July 2017. The government committed up to 70 million EUR to smart energy system innovation at that time. The below list contains both closed and ongoing funding opportunities. 

There is a funding program by the US government (Office of Electricity) called Smart Grid Grants, which was previously funded by the Recovery Act of 2009. Smart Grid Grants will invest up to 3 billion USD in grid resilience technologies and solutions and is open to domestic entities including institutions, for-profit, and nonprofit entities, state and local government entities, and tribal nations. In this program, there are two funding opportunities, the first funding opportunity and the second funding opportunity. On 18th October 2023, the US Department of Energy announced up to 3.46 billion USD in the Grid Resilience and Innovation Partnership (GRIP) Program which invests for 58 projects across 44 states and includes 34 projects selected under Smart Grid Grants. The second funding opportunity is on 14th November 2023, the Biden-Harris Administration announced up to 3.9 billion USD as a second round of financing. 

Investment in the Electric grid increased by around 8% in 2022, with both advanced and emerging economies. The European Union published at the end of 2022, an investment of approximately 584 billion EUR in the electric grid by the end of 2030. In January 2023, China State Grid Corporation announced investments of 329 billion USD over the entire 14th Five-year Plan(2021-2025). In 2022, Japan announced the creation of a 20 trillion YEN fund for the encouragement of new power grid technologies with a focus on smart grids. In 2022, India launched 3.03 trillion INR for power distribution companies to modernise and strengthen distribution. Furthermore, a 1.05 billion USD program for smart grids was made by the United States Department of Energy in 2021. 

To achieve the Net-Zero Energy (NZE) Scenario by 2030, the investment for the electricity grids to make them smart needs to average around 600 billion USD annually. This is almost double the current investment levels, around 300 billion USD per year.