The infrastructure that provides electricity to millions of U.S. consumers—the power plants, transmission lines, transformers, and substations collectively called the "grid"—has not changed much since Thomas Edison installed the first grid in New York City in 1882.

The United States' grid is technically not national, but comprised of three systems with limited connections: the Eastern Interconnected System, Western Interconnected System, and Texas Interconnected System. Together, they contain more than 300,000 miles of transmission lines and more than 9,200 generating stations capable of producing more than 1,000,000 megawatts of energy.

However, more than 50 percent of the energy generated is lost during production, transmission, or use. The lack of large-scale energy storage technology means electricity must be produced in response to real-time demand. In many parts of the country, however, utility companies lack basic monitoring technology, sometimes only learning of an outage when a customer phones to report it.

The cost of aging and outdated infrastructure is steep. Each year, outages (blackouts) and interruptions (brownouts) cost more than $150 billion—from missed stock market trades to food spoilage.

With demand for electricity expected to double by 2050—due to a growing population living in larger houses with more air conditioning, appliances, and computers—the grid is being pushed to its limits.

In addition to financial and technological challenges, efforts to expand and modernize the grid face political and regulatory hurdles as well. The generation and distribution of electricity on the national scale involves many entities, both public and private, that operate under different regional, state, and federal standards and regulations.

In the short term, however, we can make the grid "smarter" by fitting transmission lines with sensors that monitor energy demand and flow of electricity and transmit that information wirelessly so power companies can locate outages and other problems and possibly even fix them remotely. Longer term, the installation of millions of smart meters that can track and report power usage and control smart appliances would help conserve and efficiently distribute energy, especially during times of peak demand.

Electricity generation produces 40 percent of the United States' carbon dioxide emissions (while transportation is responsible for another 20 percent). Smart grid technology could ease the transition from fossil fuels to renewable energy sources that replenish themselves faster than they are depleted, such as solar, wind, tidal, and geothermal.

Rather than a few large power plants at central hubs, many smaller generating units, such as solar arrays and wind turbines, could exist throughout the grid. For example, a consumer with solar panels could generate and store small amounts of excess electricity and sell it back to the grid. Such advances could eventually make it possible to gain access to solar energy 24 hours a day.

Print Background Essay