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How IoT Enables the Smart Grid - Applications, Benefits, and Use Cases

IoT is foundational for smart grids and their ancillary smart energy solutions. Learn how IoT is shaping the smart grid, what benefits it offers, and how Particle makes building smart energy solutions easier..

Between population growth and urbanization, the effects of climate change have made developing carbon-neutral energy solutions imperative.

But the limitations of traditional energy grids are often exposed in dramatic fashion, as with the blackouts across Texas in 2021. Now, both the public and private sectors are focused on deploying secure, clean, and efficient energy solutions, quickly and at scale.

The power of interconnected devices offers an important piece of the complex energy crisis puzzle.

In particular, smart grid technology powered by the Internet of Things is a significant tool for the sustainable and secure energy future we need. When plugged into the traditional energy infrastructure, smart grids can optimize energy solutions through flexible management of diverse energy resources, increased operational insights, better maintenance forecasting, and added security.

Let’s take a look at how the IoT fits into the smart grid—how it works, its applications, and its potential benefits.

What is a Smart Grid?

Electric grids are the complex system of networks that deliver energy from its production origin, like power plants, to users such as residential consumers and businesses. In the United States, the traditional electric grid was built over a century ago and relies on a one-way flow of electricity from source to destination.

However, technology is now changing the way energy is produced, stored, and saved on the grid—and opening the door to a burgeoning smart energy infrastructure. The addition of intelligent Internet of Things sensors, microgrids, digitization, distributed renewable energy sources, and automation is forming the new smart energy ecosystem, of which the smart grid is part.

In the same way the Internet facilitates a flow of information and data between computers tapped into a single network, the smart grid system is powered by a web of interconnected devices.

But digitizing and automating energy communication signals isn’t the only thing the smart grid does. The new smart energy ecosystem also brings about a fundamental shift in the transmission of energy. Consumers, who were previously limited as recipients of energy, are now able to locally generate and store energy themselves at the edge—via commercial wind turbines and solar farms, but also through consumer solar storage systems in residential settings. As Forbes put it: “Now, as consumers become producers of energy due to maturing solar panels, wind turbines, and other sources of energy, the power flow is 2-way.”

As we’ll see, IoT applications through the smart grid and overarching smart energy infrastructure are poised to change the way energy solutions are conceived—both now and in the future.

How IoT Makes the Smart Grid ‘Smart’ - From Open to Closed Loops

Within the confines of the traditional grid, electric utility providers have little insight into how consumers actually use electricity. The one-way flow of a traditional grid is purely demand-based—when there’s an uptick in demand for electricity, operators send more to the grid.

Smart grids offer something radically different: a bi-directional flow of information between consumers and utility companies.

At Smart Energy Summit 2022, Dr. Kenneth Wacks shared that the promise of the smart grid lies in helping infrastructure evolve from an open loop to a closed loop. By adding data collection capabilities at the edge—which includes smart meters, smart home technologies, EV chargers, solar/wind farms, and more—usage and condition data can be shared across the value chain. This makes the grid more resilient because grid operators can detect outages and issues without relying on customer complaint volume to tell them something is wrong.

Similar to traditional meters, smart meters record and store information related to electricity usage. However, smart energy solutions take this to the next level by using wireless networks to send this information directly back to the energy supplier. This approach provides a much more nuanced view of the way energy is used. With smart solutions deployed from the edge all the way back to the utility, the entire value chain will gain insight into usage patterns that can change based on time-of-day, seasonality, and other factors.

In this way, smart energy solutions help both the utility provider and consumer to make more informed choices. Utilities can better anticipate energy needs, and even provide consumers with incentives that save both of them money.

How IoT Can Enable Smart Energy Solutions That Strengthen Smart Grids — Use Cases

In general, the IoT is a collection of internet-enabled devices enabling information collection, data pipelines, and the real-time transmission of that information between those devices and other people.

Smart grids represent the application of IoT technology in the energy sector. When done well, smart grids resolve several problems associated with traditional grids: outages, security concerns, high carbon emissions, and other factors.

The following list includes references to specific solutions incorporating IoT and smart grid applications.

Smart Meters

Advanced metering infrastructure is one of the key components of smart grid technology, and smart meters are the devices that bring the solution to life.

Smart metering works by providing a line of bi-directional communication between the devices themselves and the utility with the purpose of gathering, disseminating and analyzing user energy consumption data.

The sort of advanced metering solutions provided by smart meters are a vast improvement over automatic meter reading, which involve a one-way communication that limits the potential for improvements to future analysis. With automatic meter reading, data is collected, sent, and analyzed by the utility after the energy usage event.

With advanced metering, however, the insights recorded and communicated by the smart meter can be implemented by automated processes in real-time.

In that sense, smart meters can help utilities:

  • Provide real-time alerts around meter or grid damage or outages
  • Modify pricing and supply on the fly based on data insights
  • Monitor and control power quality
  • Increase energy saving
  • Install software updates

Solar Farm Monitoring

IoT technologies like smart meters can also help individuals and companies alike better the efficiency of their solar farms.

Solar farms are not only great for ROI—they also make a big difference toward the reduction of Co2 emissions. Iot-based technologies like smart grids take this a step further by helping solar farms improve operations.

Examples include:

  • Improving predictive analysis by collecting and analyzing yield data while adjusting for variables including time of year, weather, and individual panel performance
  • Streamlining maintenance by attaching monitors to individual panels providing feedback on performance and structural deficiencies in real-time
  • Getting more out of each panel by optimizing for factors like tilt angle and direction

IoT-Based Electric Vehicle Charging

Replacing vehicles that run on fossil fuels with electric vehicles (EVs) is one of the key indicators for reducing carbon emissions in years to come. But the explosive growth in the EV market presents its own set of unique challenges, including but not limited to the charging infrastructure needed to support millions of new EV drivers and their vehicles.

An IoT smart grid–based approach to EV charging can alleviate the pressure from one of its biggest challenges: identifying and coordinating optimal charging strategies for drivers.

In one use case, smart grids deployed to individual EVs can continuously monitor charge levels over the course of a journey. Simultaneously, these monitors connect to a GPS network of other charging stations. The goal? An EV assistant that can recommend the optimal time and place for refueling based on a variety of competing factors, including:

  • The EV’s charge level
  • The EV’s location and destination
  • Location of available charging stations
  • Availability and business of nearby charging stations

IoT-based assistive technology for EV charging could accelerate the adoption of EVs for both consumer and commercial uses—contributing to wider goals related to emissions reduction.

Battery Monitoring Systems

The switch to renewables based on sources like wind and solar energy can leave businesses and consumers alike grappling with the inherent variability these sources introduce.

Batteries are increasingly used for excess energy storage. The excess energy can be redistributed to others on a grid. But when batteries are under or overcharged with energy, it not only decreases performance—it can lead to a diminished battery life cycle for the business or consumer relying on it to effectively store energy.

Smart systems that monitor a battery’s state-of-charge (SOC) can help prevent premature failure due to under or overcharging.

How Smart Grids Benefit from IoT-Enabled Capabilities

The IoT supports the technology and communication required to make “smart grids” smart.

In the context of the smart grid, IoT has concrete applications for monitoring electricity generation, gauging intelligent power consumption, managing energy efficiency, and much more.

Below, we break down some of the key benefits and use cases for IoT in the smart grid.

Prevention of Energy Theft

The energy sector loses billions of dollars in value due to fraud each year, resulting in higher prices for consumers and increased taxes for taxpayers supporting government energy subsidies.

It’s been estimated that as much as $100 billion is lost due to energy theft and other non-technical losses every year.

Energy theft can be the result of direct theft—consumers connecting directly to the main supply and bypassing metering efforts—or by tampering with meters. Before the introduction of advanced metering infrastructure, it was more difficult to detect fraud without making physical inspections of units or auditing records.

Now, IoT solutions exist that bring theft detection and prevention into the 21st century. By monitoring key indicators, such as energy availability and consumption, down to the meter in real time, utilities can help their consumers save money by correcting non-technical losses in metering and billing.

Remote Control

Remote shut-off features find a natural application in combating energy theft, as they allow utilities to automatically restrict access to energy and even cut off services in the event of a delinquent account.

But the practical uses for remote control IoT functions apply to much more than energy utilities. Companies and consumers alike can use remote control functionality to control remote devices, and even entire systems, such as industrial air quality monitors, smart home products, and other devices with smart capabilities.

For users reliant on far-flung grids, the ability to toggle remote assets on and off or otherwise change their states can be a huge time and cost-saving measure—especially if the alternative is sending out a technician.

Another key feature in an IoT remote control function is the ability to remotely download and install core software updates via the cloud, as well as view and manage vital asset data from anywhere.

Preventative Maintenance

As the name suggests, preventative maintenance is about addressing issues before they happen with proactive monitoring and fixes. Every time you take your car in for an oil change, for example, the mechanic adheres a sticker to the inside part of your windshield reminding you to return either before you drive a certain number of miles or an amount of time passes.

But for the same reasons a skeptical consumer might feel the recommended amount of time between visits mainly advantages the mechanic they’re paying, it’s important to remember that scheduled maintenance isn’t without perceived costs. Too much maintenance means you might be dealing with unwieldy and frequent checkups. Too little maintenance, of course, might also mean paying for a costly replacement part—or worse, a reduction in equipment performance or security over time.

The IoT response to preventative maintenance? Real-time asset monitoring through remote, interconnected devices.

With IoT, monitoring becomes a responsive process. And for some applications, they represent an enormous improvement over traditional solutions.

One example is in IoT-connected HVAC systems, whose traditional monitoring systems often represent a prohibitively expensive barrier to entry. With the introduction of internet-connected microcontrollers, however, key data points, such as voltage, current, tilt, power, irradiance, and others are used to gauge when components read a breaking point and send out an alert.

IoT allows businesses to get real-time alerts for system deterioration and other features at a fraction of the cost, sparing them time waiting for repairs to crucial energy infrastructure by notifying suppliers faster about the need for a fix—improving the overall consumer experience.

Performance Optimization

Power generation is the second-leading cause of greenhouse gas emissions, behind only the transportation sector.

In a sector aching for innovation, smart grid technology powered by the IoT is leading the digital transformation for utilities and consumers.

Some of the ways that smart grids help with performance optimization include:

Demand Response and Demand-Side Management

What if consumers could save money by relegating usage to non-peak hours? Companies using smart grids to optimize their demand response can create incentives for consumers to run their dishwashers or do a load of laundry during times when there is low energy demand, which would save them money and decrease unnecessary emissions.

Environmentally and/or budget–conscious consumers, including businesses, can use the data applications from smart grids to be better informed of their own energy consumption levels. At the same time, suppliers can better tailor their power to service actual needs of consumers—instead of relying on estimates.

Optimizing the Grid

Utilities and suppliers can use smart grids to analyze the complex relationship between pricing, availability, efficiency and supply to better optimize all four —faster.

Monitoring

IoT tools can help smart grids monitor key components, alert stakeholders, and identify solutions to problems.

Storing Energy

Utilities and even consumers can store electrical energy through smart-enabled batteries that promote healthy life cycles and distribute energy evenly to others on the grid.

More Accurate Billing

Traditionally, billing has often been the most odious element of running utilities. Fortunately, with IoT-powered smart grid technology, utilities can bring their billing into the 21st century.

Getting Maximum Value from AMIs

Investing in a smart grid involves updating and transforming old infrastructure. But it also represents a chance to maximize ROI. Smart grids analyze key data and automate finding to ensure that you’re generating the most possible revenue out of your smart meter implementation.

Get Creative with Rates

One of the main advantages of the smart grid for utilities is that it allows them to provide incentives for consumers to monitor their consumption. With smart billing, you can easily come up with more creative offers that will make consumers want to reduce their consumption during peak hours—a win-win for everyone.

Suppliers can create pricing strategies based on daily electricity demand that incentivize users to shift their consumption to outside of peak hours. When suppliers are able to manage peak times without generating excess energy, it not only results in savings for the supplier, but decreased Co2 emissions.

Billing at Scale

Usage-based billing in the era of IoT can get complicated. With the help of smart grids technology, you can exploit innovative billing solutions at scale without missing a beat.

Improve Billing Transparency

When they can’t get to the traditional meter to take a reading, energy companies have been known to bill based on estimated usage. The problem is both suppliers and consumers lose out when actual usage deviates from the expected—as this results in inaccurate billing for consumers and usage bottlenecks for suppliers.

Smart grids, with their improved data capture and communication features, fix this problem.

Building IoT-Enabled Smart Energy Solutions with Particle

Learn more about how Particle gives you the foundation to build robust IoT smart energy solutions.

As a flexible integrated IoT Platform-as-a-Service, Particle is ideal for building IoT-enabled smart energy solutions. Here’s why:

Connectivity That Just Works

Particle offers both cellular and WiFi connectivity options so you can choose the one that makes sense for your use cases. For remote or moving energy assets, cellular connectivity is a must-have.

Particle is one of the few IoT platforms that offers global cellular coverage and will pick the best carrier based on your geographic location to ensure you get the best reception and secure the best roaming agreements. Our cellular devices are built for simplicity and fast deployment. Just turn them on and they’ll instantly connect to the best network available.

If you’re not sure what connectivity option is best for your project, check out our guide to cellular vs. WiFi for IoT.

An Integrated Platform-as-a-Service

Most IoT solutions fall into one of two categories:

  • They provide hardware and SIM cards, forcing you to figure out how to develop on the hardware, certify your IoT deployment, and make everything “talk to each other.”
  • They provide an off-the-shelf solution that is quick to deploy but offers little configurability or customization options for you to build your solution.

Particle’s Platform-as-a-Service hits the sweet spot of offering a fully integrated solution that handles the hard parts of making hardware, connectivity, and software work together while being flexible enough for you to build your product your way.

Reliable Over-the-Air Updates

IoT platforms that only offer hardware or fleet management make over-the-air updates difficult. They don’t give you insight into if the device is being used, and they can fail if the connection is lost. Worse, they require complex integrations between the device, operating system, and cloud solutions.

Particle provides industry-leading OTA update capabilities, which includes:

  • Compatibility verification that automatically verifies firmware-hardware compatibility to prevent devices from bricking.
  • Intelligent updates that automatically deliver updates when devices indicate they are ready to receive them.
  • Dynamic delivery that automatically adjusts the speed of data transfer to the capabilities of the network.
  • Update confirmation that will automatically fall back to the prior firmware if the update is unsuccessful.

Security

Central to the promise of the smart grid is the idea of a more secure electrical grid. In times of geopolitical uncertainty, nations across the world are investing in cybersecurity to protect critical infrastructure.

IoT-enabled smart energy solutions, as part of smart grids, should be secure-by-default. Particle allows you to build secure solutions confidently with key IoT security certifications like SOC II, GDPR, Privacy Shield, and CCPA compliance.

All Particle devices use end-to-end encryption between the Particle cloud service and our customers. When customers pull data from our cloud service into their own clouds, those links also encrypted. In other words, we securely apply standard network encryption to protect all end-to-end communications with encryption keys.

The Future Of Smart Grids

Traditional electric grids will continue to be disrupted by IoT and smart grids in the years to come.

With benefits like seamless connectivity, remote control, performance optimization, cost-cutting maintenance, and waste reduction, it’s easy to see how smart grid solutions can benefit not only energy suppliers and consumers, but also our communities and our planet.

Scalable, secure, and cost-effective, smart grid solutions aren’t just the future of energy—they’re the present. Growth isn’t a question of if, it’s a matter of when.

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