To Get The Smart Grid, Businesses And Cities Need To Take The Leap First

The technology for the smart grid exists, but no one is going to start using it while we still get electricity so easily. But that’s foolish: It’s time for the biggest buyers of electricity to lead the way.

To Get The Smart Grid, Businesses And Cities Need To Take The Leap First
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Designed over 100 years before the first personal computer, the power grid has been called the most complicated system ever devised by man. But despite its intricate infrastructure, most businesses don’t know or care how it works–as long as their lights stay on, it’s business as usual.


This simple fact of complacency is one of the main reasons why we haven’t seen the adoption of the smart grid, the next generation of the grid.

This needs to change. The days of utilities, cities, and companies large and small living harmoniously separate lives have come to an end, and the answer to a smart grid rollout doesn’t lie squarely with one group. It will depend on all entities, which previously never had to interact unless there was a power outage, engaging each other in an entirely new and uncharted way, disrupting “business as usual” and introducing a new way of operations.

For the first time, utilities are moving toward a customer-centric model, and will be looking toward their main customers, cities and enterprises, for help. But these customers, who depend on a reliable, affordable supply of energy, need to get off the sidelines too. To fully activate the benefits of a smart grid, businesses and cities must begin using the intelligent energy technologies available to them today, in turn evolving from passive to active consumers of energy.

All of America’s businesses and governments have a special role and responsibility in the advancement of the smart grid: to get up to speed on how to take advantage of energy management technologies to lower usage and increase efficiencies in their operations and facilities.

You can’t have a smart grid without smart buildings, and all businesses can take advantage of smart building technologies today. This makes good sense now–reduced energy usage, lower costs, continuous improvement, and a more sustainable operation–and will take best advantage of the smart grid of tomorrow. Achieving this not only reaps these rewards, but gives utilities the insight they need to provide the right energy to their customers at the right time, as well as control and manage consumption for a fully intelligent grid.


A prime example is demand response, the ability of electric companies and consumers to communicate with each other to figure out the best times to produce and consume electricity. It’s been called the “killer app” of the smart grid, but without adoption by our nation’s extensive and energy-hungry industrial, commercial, and municipal facilities, demand response could become the killer missed opportunity of the smart grid.

Demand response connects and opens a mutual relationship between utilities and buildings, offering direct financial incentives to customers for their willingness to shape their energy usage differently over time. This active energy management reduces the need for expensive new generating capacity and significantly reduces a utility’s carbon footprint. In return participants enjoy financial incentives and lower the risk of volatile energy prices.

Though there have been numerous federal rulings and legislation to move demand response forward, these progressive milestones mean nothing unless enterprises and governments know and implement the right technologies to take advantage of the myriad of benefits available.

It’s been forecasted that over the next 20 years, 50% of all carbon emissions reductions will result from the improved efficiency demand response enables. The below energy technologies are just a few examples of how utilities and customers are able to work together and enable smarter buildings and enterprises:

  • Data Centers: The massive demand for IT services has made data centers an intensely energy-hungry function. There are a number of simple, available methods to help decrease the energy requirements of data centers, such as cooling racks with outside air instead of employing an energy-intensive HVAC system.
  • EV Charging: By incentivizing local businesses to install electric vehicle charging stations in parking lots and garages, cities can improve the overall health and efficiency of the local power grid. EVs connected to the grid via charging stations offer utilities a storage receptacle for excess energy during slow demand periods, enabling it to be used at more valuable times when demand rises.
  • Weather Predictive Cooling/Heating: Advancements in weather prediction have made high-value, precise environmental data available to buildings at low cost, allowing facility operators to work with utilities and save money by pre-heating and cooling buildings and avoiding energy-intense times and costs.

Enabling demand response technologies such as these are the foundation of a strong smart grid strategy. By also implementing the following four building blocks, cities and their economies will be able to achieve a cleaner and secure energy supply for generations to come:

  • Smart Supply: Electricity accomplishes its task whether generated at a fossil fuel plant a hundred miles away, or on a solar array on top of a roof. Because we now have the ability to generate local, clean energy, we can supply our homes and businesses more intelligently and affordably than ever before with less emissions and less transmission.
  • Flexible Distribution: As our current infrastructure stands, up to 15% of energy can be lost in transmission due to inefficiencies in local grids. Smarter distribution technologies are now available which improve local network efficiency, lower overall losses, and smoothly integrate renewable sources such as wind and solar.
  • Efficient Enterprises: Thanks to new technologies, the five critical yet traditionally siloed domains of an enterprise (power, process and machine, IT, buildings, and security) are able to collaborate with each other and provide timely information to allow businesses to reduce energy usage and costs by 30% or more, and give utilities availability and load-lightening insight.
  • Efficient Homes and Cities: In conjunction with inefficient enterprises, billions of dollars in energy costs are lost each year in the U.S. due to inefficient homes and non-commercial buildings. Intelligent tools, including energy and environmental monitoring, help cities optimize their resource consumption for municipal offices, data centers, hospitals, universities, and residences. By allowing the buildings of a city to communicate with each and with the grid, both emissions and consumption are reduced while resident engagement is increased.

The right technologies and services are here today to gain remarkable insight into available energy options, increase situational energy awareness, and adapt enterprises and cities to capitalize on opportunities. However, a smarter grid will only be achieved when businesses and cities play a more active role in driving productivity with energy assets–taking energy out of the boiler room and into the boardroom–overlaying advancements in technology and distributed control with a strong financial and sustainable value proposition.

About the author

Jeff is the U.S. Country President for Schneider Electric.