An electrical grid is an interconnected network for delivering electricity from suppliers to consumers. It consists of generating stations that produce electrical power, high-voltage transmission lines that carry power from distant sources to demand centers, and distribution lines that connect individual customers.

Nowadays, there are 3,200 utilities that make up the U.S. electrical grid, it is the largest machine in the world. These power companies sell $400 billion worth of electricity a year, mostly derived from burning fossil fuels in centralized stations and distributed over 2.7 million miles of power lines.

And the smart grid is a modernized electrical grid that uses information and communications technology to gather and act on information, such as information about the behaviors of suppliers and consumers, in an automated fashion to improve the efficiency, reliability, economics, and sustainability of the production and distribution of electricity. Support for the smart grid in the United States became federal policy with passage of the Energy Independence and Security Act of 2007. The law set out $100 million in funding per fiscal year from 2008–2012, established a matching program to states, utilities and consumers to build smart grid capabilities, and created a Grid Modernization Commission to assess the benefits of demand response and to recommend needed protocol standards. The law also directed the National Institute of Standards and Technology to develop smart grid standards, which the Federal Energy Regulatory Commission (FERC) would then release through official rule makings. And smart grids received further support with the passage of the American Recovery and Reinvestment Act of 2009, which set aside $11 billion for the creation of a smart grid.

Reference:

ABB, “ABB’s smart grid technologies”

Energy Gov, “SMART GRID”

Chris Martin, Mark Chediak, and Ken Wells, “Why the U.S. Power Grid’s Days Are Numbered” August 22, 2013

Wikipedia, “Smart grid in the United States”