Why smart energy grids are a powerful opportunity for business

Access to electricity is an important driver of well-being in emerging economies, enabling healthcare, education and economic prosperity. In 2021, numbers without electricity worldwide hit an all-time low of 768 million people, or just 3 percent of the world’s population.

As our use of electricity expands, so too do the challenges of making it sustainable, affordable and reliable. Thankfully, alongside improved technology for renewable energy, smart electrical grids are here to help. How can business benefit from a smarter energy supply?

What is a smart electricity grid?

A smart grid is one where an IT network connects and controls all components, from energy supply to transport to the consumer. Smart grids makes it possible to reduce costs and energy consumption through intelligent control, reducing and balancing local energy fluctuations.

A related idea is the microgrid: Smaller, standalone electricity systems designed to be self-sufficient. Take, for example, Scottish island Eigg’s community-owned microgrid, using 90 to 95 percent renewable energy, or the US military island Miramar, powered by solar energy and landfill gas.

How business can benefit from smart grids and microgrids

Smart grids don’t just have advantages for energy suppliers or large companies with powerful electrical plants and system components. Communities or smaller companies can benefit from smart microgrids, saving on energy costs and reducing greenhouse gas emissions.

To create a smart grid, certain standards must be defined for it to work properly, but companies can easily implement microgrids. An intelligent microgrid adapted to the energy needs of a company can reduce energy demand and so the environmental footprint.

Companies can benefit from smart grids in many ways, like using intelligent control systems to profit from variable electricity prices or doing non-time-critical processes when the electricity tariff is best.

Examples of smart businesses using smart energy

German energy company Sonnen Group has a successful smart grid business model using a virtual energy storage cloud. It sells affordable home energy storage systems which work together as a virtual power plant, so the company and customer both control power for the electrical grid.

Another German company, aWATTar, provides flexible electricity tariffs to shift demand to sunny or windy periods, relieving the grid and promoting renewable energy expansion.

Security risks for smart grids

Data security is important for smart grids, because all system components are networked and energy use data is sensitive. We must also protect systems against deliberate manipulation or forced system failure.

Critical infrastructure such as energy is an attractive target for cybercriminals. In 2021 a ransomware attack shut down a major US fuel pipeline and in that same year, an IBM report found energy has risen up the ranks to become the third most attacked sector.

Future trends and opportunities in smart energy

The energy sector has changed much in recent years, thanks to economic, political and environmental factors. The European energy crisis which has driven high energy prices is projected to last into 2023.

Smart energy must be designed flexibly so energy systems can adapt quickly to future trends. Companies should consider the likely need to adapt to future energy market changes when designing their smart solutions.

If they want to see more businesses adopt smart grids, governments and authorities could define standards, clarify the legal framework and offer incentives through funding programs.

Climate change has brought many challenges for individuals, businesses and countries. It also means opportunities for greater efficiency and adopting technologies that can mean we live healthier, safer and more productive lives. Smart grids are a powerful technology that properly secured, should be central to future energy strategy for businesses and nations.