Most people never think about the electrical grid when they turn on their TV, charge their smartphone or surf the Internet. But, without it, none of those things would work.

The grid consists of an intricate network of high-voltage towers and cables that transmit electricity from power stations. A series of local substations and wires then distribute power to end users. In between, there are thousands of capacitors, switches, transformers and other devices. Throughout this process, up to 10 percent of the available electricity is lost.

Most of the U.S. system has been in place for more than 50 years. However, the electrical power distribution industry is currently in the midst of its biggest transformation since Thomas Edison, Nikola Tesla and George Westinghouse waged a battle over AC vs. DC current in the late 1880s.

The so-called “smart grid” is a planned nationwide network that will use information technology to deliver electricity efficiently, reliably and securely. It has been called “electricity with a brain,” “the energy internet” and the “electronet.”

Smart grid will consist of a network of computer-based control and automation systems. Key components include data analytics software, power electronics, sensors and smart meters.

According to the National Institute of Standards and Technology (NIST), the smart grid will enable bidirectional flows of energy and use two-way communication and control capabilities that will lead to an array of new functionalities and applications. Unlike today’s grid, which primarily delivers electricity in a one-way flow from generator to outlet, the smart grid will permit the two-way flow of both electricity and information.

Many smart grid components are self-healing, which enables automated fixes in the event of a power outage or problem. These state-of-the-art systems sense failures on the grid and can quickly identify, isolate and restore power.

“Much of the renewable energy and natural gas potential in the United States is located in areas that are remote from population centers, lack high demand for energy, and are not well connected to our national infrastructure for transmission of bulk electrical power,” says Massoud Amin, a professor of electrical and computer engineering at the University of Minnesota.

“Sufficient transmission capacity must link new natural gas generating plants, onshore or offshore wind farms, solar plants and other renewables to customers, if those resources are to serve the energy needs of homes and businesses,” adds Amin, who serves as director of the university’s Technological Leadership Institute.

“New transmission will play a critical role in the transformation of the electric grid to enable public policy objectives, accommodate the retirement of older generation resources, increase transfer capability to obtain greater market efficiency…and meet evolving national, regional and local reliability standards,” claims Amin, a fellow of the Institute of Electrical and Electronic Engineers (IEEE). "With a stronger and smarter grid, 40 percent of our electricity in the U.S. can come from wind by 2030."

Old System, New Investment

The national power grid that runs America was built in the decades after World War II. The $876 billion system transmits electricity from thousands of power plants to 150 million customers through more than 5 million miles of power lines and more than 3,000 utility companies.

The U.S. Department of Energy (DOE) claims that reliable grid-based power was a major contributing factor to economic growth in the second half of the 20th century. However, the system is struggling to keep up with the challenges of electric power transmission and distribution in the 21st century.

Despite energy conservation efforts, electricity demand has risen by 10 percent during the past decade. And, the number of power grid outages has increased 258 percent from 1984 to 2013.

“The smart grid’s technical, economic and political challenges are myriad, [but] its potential benefits [could be] unprecedented,” says James Prendergast, executive director of IEEE.

“The future is going to be very different from the past in terms of how we receive, use and distribute electricity, and the ripples from that fact will be felt across virtually every aspect of human life, as well as our environment,” claims Prendergast.

In addition to the U.S., smart grid efforts are intensifying around the world, especially in China, Europe and Japan. Addressing this challenge will require an enormous investment in infrastructure.

The Electric Power Research Institute estimates the cost of fully modernizing the grid at between $338 billion and $476 billion. However, it argues that the economic benefit of a smart grid system could total $1 trillion to $2 trillion.

That’s great news for manufacturers of electric power transmission and distribution equipment. Navigant Research forecasts that global smart grid technology revenue for those companies will grow from $44 billion in 2014 to $70 billion by 2023. The United States is expected to see about $60 billion invested in intelligent smart grid infrastructure by 2030, according to analysts at Innovation Observatory.

“We’re still a long way from implementing the entire smart grid project,” says Tom King, program director for sustainable electricity at Oak Ridge National Laboratory (ORNL), the R&D arm of the DOE. “Only about 10 percent of it is currently in operation.

For instance, only 16 million smart meters have been installed so far out of a potential 130 million homes. “It will take at least 20 to 30 years to fully implement the grid modernization program,” claims King.

State-of-the-Art Projects

In addition to DOE, IEEE, NIST and ORNL, several large utilities are leading the smart grid charge, including CenterPoint Energy Inc. and Commonwealth Edison Co.

In Houston, CenterPoint has invested millions of dollars in its advanced metering system and intelligent grid project. The smart grid system uses power line sensors, remote switches and other automated equipment to improve reliability.

The large project included the installation of 31 substations and 771 intelligent grid-switching devices on 188 distribution circuits. Today, it’s one of the world’s most advanced distribution management systems.

The initiative has also installed smart meters for more than 2 million residential and commercial customers. Project objectives include eliminating manual meter reading and improving operational efficiency. In addition to electronically reading meters, the power company can remotely connect and disconnect customers.

CenterPoint deployed smart meters that were mass-produced by Itron Inc. at its plant in Waseca, MN. The devices contain circuit boards and electronic modules that measure energy consumption. They transmit information on key factors, such as power quality and outages, back to the utility. This allows real-time monitoring of the energy distribution system and supports the development of smart grids.

The modern electric meter is no longer just a nondescript metal disk that spins around inside a glass case. It’s evolving into an intelligent device that can be queried for on-demand data, upgraded remotely, shut off in case of emergency or nonpayment, and used for variable pricing schemes.

“The movement from 8-bit microcontroller units (MCUs) to higher margin 32-bit MCUs is a key industry trend,” says Noman Akhtar, an analyst at IHS Technology. “The integration of these higher function microcontroller units also requires additional capabilities, such as increased memory, which further increases manufacturing costs.”

According to Akhtar, the average semiconductor cost in two-way meters was $11 in 2014.

“Meters installed in the latter half of this decade will require greater application complexity, better security, improved communication ability, enhanced remote control ability and higher resolution,” claims Robbie Galoso, associate director of semiconductor market shares and industrial electronics at IHS Technology. “That means increased need for memory and system-on-chip solutions with greater capabilities in a smaller package than in the past.

“The semiconductor industry for electric meters is moving toward a single-chip solution for measuring and communicating with the grid station,” adds Galoso.

Microgrids are another big trend in the electric power industry today.

Earlier this year, Commonwealth Edison unveiled plans for its “community of the future” on the South Side of Chicago. When the project is complete, ComEd claims it will be the first microgrid cluster in the world.

The entire Bronzeville community has already received smart meters. Smart switches, which help improve power reliability by rerouting electricity when an outage occurs, have also been deployed in the area, which includes a diverse array of customers and load types.

The highlight of the system is a microgrid—a small power grid that connects to the main grid or can operate independently. Microgrids improve grid resilience and security by lowering the impact of power outages due to severe weather, security or other disruptions.

The ComEd project will serve as a benchmark for many other utility-owned microgrids that will be deployed over the next decade. In fact, Navigant Research predicts that U.S. microgrid capacity will increase from 29 megawatts in 2015 to 241 megawatts by 2024.

“Smart microgrids will play a growing role in meeting local demand, enhancing reliability and ensuring local control of electricity, where financially viable,” claims Amin. “Microgrids are small power systems, several megawatts or less in scale, with three primary characteristics: distributed generators with optional storage capacity, autonomous load centers, and the capability to operate interconnected with or islanded from larger grids. Storage can be provided by batteries, supercapacitors, flywheels or other sources.”

Unique Products

Increasing demand for next-generation electrical transmission and distribution equipment is forcing engineers to rethink age-old product designs. Today, switch gear, transformers and other state-of-the-art equipment must incorporate a full array of advanced electronic metering, communications and control technologies.

“Currently, there is no one size fits all [solution],” says Farah Saaed, principal consultant at Frost & Sullivan Inc. “Each system needs to be customized according to what is already in place and the particular issue that the utility is looking to address. However, a solid communication infrastructure is the most important component [that allows] real-time assessment and two-way communication.”

“Smart grid products are primarily categorized as utility-related or customer-related,” explains Wally Walejeski, utilities industry solutions principal at Meridium Inc., a company that specializes in asset performance management software and services. “For utilities, smart grid products need to be intelligent, digital and simple to deploy. These products handle data collection and data processing, and can range from a simple device, such as a sensor, to a more complex device, such as microprocessor-based system.

“Customer-focused smart grid products similarly include intelligent appliances with the ability to respond to external control signals, sensing devices that provide feedback to the utility, or other communication devices,” notes Walejeski. “Smart grid devices target specific performance task needs, and there are different sets of products focused at implementing and optimizing smart grid functions, including software and other digital technologies.”

Another key issue is whether smart grid technologies are designed to reduce total energy use (energy efficiency) or just to affect the timing of energy use (load management). So far, most smart grid applications have focused on load management objectives.

“Smart grid products benefit from the growth in technical advancements across many industries,” says Howard Self, smart grid distribution automation program manager at ABB Inc., one of the world’s largest manufacturers of electrical power equipment. “Placing smart electronics, sensors, communication components, power supplies and transistors in extreme environments exposed to higher magnetic fields, volatile transient spikes in current and voltage is unique to the industry. However, it is not just about the smart electronics.

“We benefit from advancements in material science, as well as improvements in mechanical, chemical and thermal processes,” adds Self. “Many applied sciences are involved in the design and production of reliable, efficient and cost-effective components for the smart grid. 

“The goal of the smart grid is to produce a more reliable, efficient and sustainable electrical system that evolves with the demands of the consumer,” explains Self. “The challenge is that our components need to last for many years.

“Sensors and microchips are critical components, as they help provide the information critical to the smart grid,” Self points out. “Being able to monitor all conditions on the grid, coupled with software for engineering, operations and business analytics, will continue to make the grid smarter and more reliable.

“However, advancements that help produce, convert, transmit, store and consume energy in more efficient manners will truly transform the grid,” claims Self. “So much energy is lost in all of these processes that our sustainable future relies on these developments.”

On the outside, many smart grid components look similar to traditional equipment. But, inside, they’re packed with advanced sensors and electronics that enable two-way communication.

“The traditional grid consists mostly of materials and equipment that are installed and operate independently for their 30-year life,” says Tim Qualheim, senior vice president of applied grid solutions at S&C Electric Co., a 105-year-old manufacturer of fuses, switch gear and other types of electrical distribution equipment. “Equipment is expected to last a long time and perform nearly perfectly, even in harsh environments.

“[Smart grid] equipment that operates automatically must monitor certain things, evaluate them and react to them,” explains Qualheim. “So, that equipment has some combination of sensors, electronics to process data and make decisions, some type of control to make the equipment operate, and communication devices to tell the utility its status and when it operates.

“The next level of smart grid adds a layer of intelligence to allow the various pieces of equipment to share information, then control them as teams or groups,” Qualheim points out. “These systems allow the grid to operate more efficiently and reliably, and in many cases actually save the utility money.”

Transformers are the least sexiest piece of the electric grid, but they play a critical role. They transform voltage levels—stepping them up for long-distance transmission from a power plant and stepping them down for distribution to consumers.

The nondescript metal boxes are typically the size of a large truck and can be in service anywhere from 30 to 50 years. Magnetics form the core of conventional transformers. Thermal management and electrical insulation affect the long-term reliability of the devices.

Next-generation transformers contain monitoring and diagnostic sensors that allow utilities to operate their equipment more efficiently. “They can measure motion, temperature and other factors to prevent catastrophic failures,” says Craig Stiegemeier, director of technology and business development for ABB’s power transformer group.

“Modern transformers are also equipped with fiber optic cables instead of traditional copper wires,” adds Stiegemeier. “That’s something that engineers never thought about in the past. And, it makes assembly more complex, because the cables can easily be damaged.”

New Technology

Engineers are scrambling to develop new smart grid hardware components, such as sensors, power electronics and power flow control devices.

“[Traditionally], fault interrupting devices have been some of the most difficult to design, as there is often as much art as science in their design,” says Qualheim. “In the smart grid, the most difficult challenge is going to be the control system that effectively deals with a very quickly changing grid.

“Historically, power flowed one way on the grid, allowing very stable designs and practices,” explains Qualheim. “In tomorrow’s grid, distributed generation is disrupting the power flow, affecting system stability, protection and worker safety.

“[In the future], utilities will become distribution system operators (DSOs) that facilitate electron flow,” predicts Qualheim. “But, this ‘flexible grid’ brings significant challenges to the DSO to deal with very dynamic needs, while still keeping the grid stable and safe. The combination of local or distributed intelligence and the next layer of intelligence facilitating all of this will be very difficult to design.”

Sensors are vital to making the smart grid work. Thousands of the devices are required to detect and monitor equipment, in addition to addressing issues related to communication and interoperability.

“Smart grid sensors function by enabling the monitoring of electrical equipment such as transformers, arrestors, power cables and other equipment installed in the power plant or substation, along with the demand side
management in the smart grid,” says Vishu Rai, a lead analyst at Technavio, a market research firm. “These devices monitor power line temperatures and weather conditions to calculate the line’s carrying capacity.

“A typical smart grid sensor consists of a transducer, which generates electrical signals; a microcomputer, which stores the output; and a transceiver for receiving and transmitting signals,” says Rai.

A new generation of low-cost, low-power wireless sensors are currently being developed by ORNL engineers, who are partnering with Molex LLC. The goal is to dramatically reduce the cost of sensors by leveraging advanced manufacturing techniques, such as additive roll-to-roll manufacturing.

“This process enables electronic components, such as circuits, sensors, antennae, photovoltaic cells and batteries, to be printed on flexible plastic substrates,” says King. “The nodes can be installed without wires using a peel-and-stick adhesive backing.

“We envision these sensors someday being used by utilities to measure temperature and humidity throughout the grid,” explains King. “One application we’re exploring is measuring when and where conductors expand and sag on power lines. Collecting such data is currently cost prohibitive.”

ORNL engineers are also developing a new class of power electronics, such as inverters, transformers and transistors, that help control and convert electricity. Approximately 30 percent of all power generation today utilizes power electronics between the point of generation and its end use. By 2030, this is expected to jump to 80 percent of generated electricity—supporting greater renewable energy integration and increased grid reliability.

“Managing voltage, energy storage and reactive power is critical to ensuring the stability and reliability of grid modernization efforts,” claims King. “Flexible alternating current transmission system devices based on power electronics are going to be a key technology in the future.

“Wide bandgap semiconductor-based power electronics will be able to better withstand the power loads and switching frequencies required by next-generation utility technologies,” King points out. “New semiconductors, such as silicon carbide and gallium nitride, can operate at higher temperatures, have greater durability and reliability at higher voltages and frequencies, and are smaller, more efficient and cost less.”

Power flow control is another key focus of ORNL engineers. They recently developed a continuously variable series reactor (CVSR), working with SPX Transformer Solutions Inc. and the University of Tennessee. The CVSR is a device designed to be connected in an AC electric power line in series to regulate electricity flow by varying the reactance. Intended for utility transmission grid applications, the CVSR will be installed in substations.

“The CVSR is a high-power magnetic amplifier that controls power flow,” says King. “In operation of power systems, where conditions constantly change, a single CVSR will provide smoothly variable alternating current circuit impedance, while a number of coordinated CVSRs installed throughout the power system can provide full power system control. The CVSR’s unique design will help ensure full use of power system assets, increased reliability and efficiency, and effective use of renewable resources.”

Assembly Challenges

Most electrical distribution and transmission equipment is produced by a handful of vendors, including ABB, General Electric and S&C Electric. The products are typically custom built to meet the unique needs of utilities.

To ramp up for the smart grid, GE Energy recently expanded its capacitor and transformer plant in Clearwater, FL. “With the factory, [we are] meeting growing global demand with a 35 percent increase in capacity and a 50 percent  reduction in manufacturing cycle time,” says Alan Swade, general manager at GE Grid Solutions.

“The equipment manufactured [here] will maintain efficient power flows across electrical transmission and distribution networks,” explains Swade. “The [plant] serves one of the fastest growing market segments globally and enables the integration of renewable energy sources around the world.”

The vertically integrated plant features sensor-enabled process equipment and state-of-the-art robots to automate assembly tasks. According to Swade, that will enable GE’s assembly processes to be more consistent and repeatable, while accelerating innovation, speed and performance.

“The Clearwater facility [uses] predictive and prescriptive analytics to [reduce] lead and cycle times across a wide variety of product configurations,” Swade points out. “We are reimagining how products are designed, manufactured and serviced. And, we’re combining new production processes with cutting-edge technology and digital analytics to change how we design and create [electrical transmission and distribution equipment].”

Anticipating the smart grid, S&C Electric implemented a lean manufacturing initiative more than a decade ago at its factory on Chicago’s North Side. The initiative eliminated waste and created one-piece-flow on the plant floor.

A good example is the assembly line that builds the company’s Vista series of underground electrical distribution centers. The hermetically sealed stainless steel boxes are packed with high-voltage fuses and switch gear. Instead of using oil, the switch gear uses gas sealed in a completely submersible stainless steel tank.

“The submersibility of the Vista switch gear is essential, [because] in urban networks, switch gear is frequently installed in street or sidewalk vaults that often fill up with water,” says Mark Stavnes, chief operating officer at S&C Electric.

In the past, these products were assembled in a batch-and-queue operation. The heavy assemblies were transferred from one workstation to the next via an overhead gantry.

After a kaizen event, engineers redesigned the line, arranging fabrication, assembly and test equipment in close proximity to create one-piece flow. Instead of relying on the gantry, the large assemblies are now moved from station to station on a heavy-duty, floor-level roller conveyor.

“One of the most significant investments we made [was for] dedicated test equipment within the assembly process,” says Stavnes. “[This] simulates as close as possible the high voltage, high current and communications environment these switches will see when the customer installs them in the field.

“Most of the assembly processes for next-generation products are the same as we have been using for decades,” adds Stavnes. “[However], we are now using torque monitoring to ensure that every fastener is properly in place and laser measuring equipment to monitor critical dimensions during the assembly process.

“While we are investigating some robotic solutions for assembly, [so far] we have not been able to justify the investment,” notes Stavnes. “We have been able to make significant improvements in output to meet increasing demand by [deploying] more typical means, [such as] elimination of waste and better line balancing.”

Last year, ABB opened a $50 million assembly plant in the Czech Republic to produce medium-voltage switch gear, transformers and substation automation systems. The automated facility is one of the largest and most-advanced plants of its kind in the world. State-of-the-art ABB robots have enabled a 25 percent increase in the number of switch gear units produced.

“Many assembly applications in this industry, such as large transformers, are not ideal for automation, because there is a lot of custom hand work involved,” says ABB’s Stiegemeier. “The main assembly challenge that we’re facing is how to install all the brackets and fittings that are needed to mount the metal boxes and control cabinets that contain sensors and electronics.

“That requires more penetration points, which is something that our customers are concerned with,” explains Stiegemeier. “Any holes that we make for fasteners create the potential for a leak when equipment is deployed out in the field. Moisture affects performance.”