Smart Grid vs. Legacy Grid — Energy Innovation or Traditional Stability?
Smart Grid vs. Legacy Grid — Energy Innovation or Traditional Stability?
1. Introduction: A Paradigm Shift in the Power Grid
Our daily routine—checking our smartphones the moment we wake up, starting the coffee machine, charging our electric cars. All of this is possible thanks to a massive power infrastructure built over the last 100 years. But now, this once-solid system is facing a fundamental change.
In February 2021, a severe cold wave that struck Texas, USA, sent shockwaves around the world. As extreme cold of -19°C caused a surge in electricity demand and power generation facilities failed simultaneously, 4.5 million households were left without power. At least 246 people lost their lives, and the economic damage reached $130 billion. This event starkly revealed the limitations of the legacy power grid.
Meanwhile, during the same period, the small German town of Feldheim wrote a completely different story. With a population of just 130, the town achieved energy self-sufficiency by building a microgrid based on wind and solar power starting in 2010. Not only did it maintain a stable power supply during the harsh winter cold, but it also generated revenue by selling surplus electricity to the German national grid.
These two cases pose an important question to us: Is the future of the power grid 'large and robustly centralized,' or 'small but smartly decentralized'?
1.1 Why is Grid Innovation Needed Now?
The challenges facing the global power system today are more complex than ever. First, carbon neutrality goals to combat climate change are demanding a fundamental redesign of the power grid. South Korea has declared carbon neutrality by 2050, the US and EU by 2050, and China by 2060. This means the power generation structure must shift from being fossil fuel-centric to renewable energy-centric.
Second is the rapid increase of Distributed Energy Resources (DERs). With the exponential growth of rooftop solar, small-scale wind, residential Energy Storage Systems (ESS), and electric vehicles, the traditional distinction between 'producer vs. consumer' is breaking down. Ordinary households have now become 'prosumers' that produce, store, and sell electricity.
Third, the acceleration of digital transformation and the Fourth Industrial Revolution has completely changed the patterns of electricity demand. New types of power loads such as data centers, 5G base stations, AI computing, and EV charging are emerging, and they exhibit different characteristics than traditional loads.
"The electric grid is the most complex machine ever made by man. And now we are at a point where we have to completely reinvent that machine." - Jennifer Granholm, U.S. Secretary of Energy
1.2 What This Article Will Cover
This article provides a multi-faceted comparative analysis of the legacy power grid and the smart grid. Going beyond simple technical explanations, we will comprehensively examine the differences from a philosophical perspective, real-world operational cases, economic feasibility, and future prospects.
In particular, we will address issues important in the Korean context—such as the K-Green New Deal, the Korean New Deal 2.0, the Renewable Energy 3020 Plan, and the green hydrogen economy—to provide a practical guide that practitioners can use for decision-making.
🎯 Target Audience for This Article
- Energy industry professionals and policymakers
- Planners and developers related to smart cities and IoT
- Investors interested in sustainable technology
- Managers of grid modernization projects
- Researchers and students in the energy sector
2. The World of the Legacy Power Grid
To understand the legacy power grid, we must first look at its origins. On September 4, 1882, Thomas Edison started the world's first commercial power plant, the Pearl Street Station, in Manhattan, New York. It operated by burning coal to create steam, which then turned turbines to produce electricity. From this moment, the basic philosophy of the power grid—'centrally mass-produce and transmit over long distances'—was born.
2.1 Structure and Philosophy of the Legacy Grid
The legacy grid (or conventional grid) has a straightforward structure. Large-scale power plants produce electricity, which is transmitted over long distances through extra-high voltage transmission networks (345kV, 765kV). Then, at substations, the voltage is stepped down and distributed through distribution networks (22.9kV, 6.6kV), finally being supplied to homes at 220V/110V.
The core philosophy of this system is 'economy of scale'. The logic is that the larger the power plant, the lower the per-unit generation cost, and the higher the capacity of transmission lines, the greater the efficiency. Indeed, this approach has achieved remarkable success over the past 100 years. In 1900, electricity penetration in the U.S. was only 3%; by 1950, it exceeded 90%.
2.1.1 Operating Principle: The Art of Real-Time Balancing
The most significant characteristic of power grid operation is that electricity is difficult to store. Since electricity must be consumed the moment it is produced, supply and demand must match precisely at all times. To achieve this, power exchanges perform a 'magic trick' of balancing supply and demand 24/7.
A look at a day in the life of the Korea Power Exchange (KPX) reveals this complexity. At 7 AM, as subways start running for the morning commute and office lights turn on, electricity demand surges. At this point, baseload power plants (nuclear, coal) are insufficient, so intermediate-load power plants (LNG combined cycle) are activated. Around 8 PM, when heating and cooling demand peaks, peak-load power plants (LNG simple cycle, oil) are fully mobilized.
2.2 Strengths of the Legacy Grid
2.2.1 Reliability of Large-Capacity Stable Supply
The greatest strength of the legacy grid is its reliability. South Korea's System Average Interruption Duration Index (SAIDI) is 16.45 minutes per year (as of 2022), which is among the best in OECD countries. Compared to the U.S. at 183 minutes and Germany at 17.3 minutes, the stability of the Korean power grid is evident.
This stability is the result of long-term standardization and centralized operation. Based on 60 years of operational know-how accumulated since its founding in 1961, Korea Electric Power Corporation (KEPCO) provides near-perfect supply stability within predictable patterns.
2.2.2 Economy and Efficiency
The economy of scale of large power plants is still a powerful advantage. For example, the construction cost of Shin-Hanul Units 3 & 4 (APR1400, 1.4 GW class) is about 2.8 million KRW per kW, which is still competitive compared to small-scale distributed generation. Transmission efficiency is also high. South Korea's transmission and distribution loss rate is 3.8% (2022), which is very low compared to the world average of 8-10%.
2.2.3 Operational Simplicity
Another advantage of a centralized system is its operational simplicity. There are relatively few variables to control, the decision-making structure is clear, and decades of accumulated operational manuals and safety protocols are systematically organized. This is a significant strength, especially in emergency response situations.
2.3 Limitations and Challenges of the Legacy Grid
2.3.1 Difficulty in Integrating Renewable Energy
The biggest weakness of the legacy grid is the difficulty of integrating renewable energy. Solar and wind power have an 'intermittent' characteristic, with output fluctuating depending on the weather, which is fundamentally at odds with the legacy grid's philosophy of 'prediction and control'.
In a real-world case, Jeju Island experienced 'curtailment' measures 97 times in 2019 due to a surge in wind power generation. Although wind power output increased due to strong winds, the legacy grid could not handle it effectively, forcing the shutdown of generation. This was equivalent to discarding clean energy.
🌪️ The Duck Curve Phenomenon
First observed in California, this phenomenon is named for the duck-like shape of the electricity demand curve during the day in areas with high solar generation. During the day, the output of conventional power plants must be drastically reduced due to solar power, and then rapidly increased after sunset. Legacy grids struggle to respond to such sharp fluctuations.
2.3.2 Complexity of Bidirectional Power Flow
The legacy grid was designed on the premise of a one-way flow from 'power plant → consumer'. However, with the spread of rooftop solar, ordinary households also began to generate electricity, causing a 'reverse flow' phenomenon in the distribution network. Especially during the afternoon when solar generation exceeds household consumption, the surplus power flows back into the distribution grid, which can cause problems like voltage rise, frequency instability, and protection relay malfunctions.
According to a 2021 survey by the Korea Energy Agency, about 15% of the 2,831 distribution substations nationwide are experiencing voltage management issues due to reverse flow. This problem is expected to become more severe as solar adoption expands.
2.3.3 Cybersecurity and Physical Vulnerabilities
The centralized structure of the legacy grid is vulnerable to cyber or physical attacks. Paralyzing just a few key facilities could lead to a wide-area blackout. The risk of blackouts due to cyberattacks is also increasing, as seen in the 2015 Ukrainian power grid hack.
2.3.4 Lack of Real-Time Visibility
In the legacy grid, it is difficult to monitor power flow and quality in real time. Most distribution networks operate in a 'black box' state, making it hard to know in real time where and how much power is being consumed, or what quality issues are occurring. This has been a factor that hinders efficient operation and rapid fault response.
2.4 Major Blackout Incidents and Lessons Learned
2.4.1 The 2003 North America Blackout
The major blackout that occurred on August 14, 2003, in the Northeastern United States and Ontario, Canada, starkly demonstrated the vulnerability of the legacy grid. The incident, which began when three transmission lines near Cleveland, Ohio, came into contact with trees and tripped, cascaded into a massive disaster where over 100 power plants shut down and 61 million people lost power.
While the direct cause of the accident was an operational system error by FirstEnergy Corp., it fundamentally exposed the structural problems of the legacy grid. A lack of real-time situational awareness, poor information sharing between regions, and the absence of an automated response system magnified a small incident into a major catastrophe.
2.4.2 South Korea's Blackout Case
South Korea has also experienced incidents that revealed the limitations of its legacy grid. The rolling blackout on September 15, 2011, was caused by a shortage of reserve power and a failure in demand forecasting. Around 3 PM, as electricity demand exceeded expectations and supply capacity hit its limit, KEPCO implemented rolling blackouts, dividing the country into five groups and cutting power to each for two hours at a time.
The incident left 1.62 million households without power, causing chaos such as subway service interruptions, non-functional traffic lights, and people trapped in elevators. The public's anxiety was particularly high because the blackouts began suddenly and without prior warning.
"The 2011 rolling blackout was not simply a power shortage incident, but an event that showed the rigidity of the legacy grid and its limited demand response capability. If a smart grid had been in place, it would have been possible to control demand in advance and selectively limit supply based on priority." - Analysis Report from the Korea Energy Economics Institute
2.4.3 Extreme Weather and Grid Vulnerability
Recently, with the increasing frequency of extreme weather due to climate change, the vulnerability of the legacy grid has become more prominent. A heatwave that struck South Korea in the summer of 2022 saw electricity demand hit an all-time high, and damage from Typhoon Soulik in 2018 caused power outages for 270,000 households in the Gyeongnam region alone.
In such extreme situations, the legacy grid exhibits the following limitations:
- Lack of ability to respond to unforeseen sharp increases in demand
- Protracted restoration times for physical infrastructure damage
- Limited alternative supply routes or bypass methods
- Absence of active participation mechanisms on the demand side
3. The Innovation of the Smart Grid
Although the concept of the smart grid first emerged in the early 2000s, it began to receive serious attention after the 2008 global financial crisis. As various countries promoted Green New Deals as part of their economic stimulus packages, the smart grid started to be highlighted as a 'new growth engine'.
In 2009, the Obama administration in the U.S. invested $4.5 billion in the smart grid sector through the American Recovery and Reinvestment Act, and South Korea also selected the smart grid as a core task of its Green New Deal in the same year. From then on, smart grid demonstration projects and commercialization efforts began in earnest worldwide.
3.1 Definition and Philosophy of the Smart Grid
A Smart Grid is a next-generation intelligent power network that optimizes energy efficiency by integrating information and communication technology (ICT) into the power grid, allowing for two-way, real-time information exchange between power suppliers and consumers. The U.S. Department of Energy (DOE) defines a smart grid as "a power system that uses digital technology to improve the reliability, security, and efficiency of electricity."
However, beyond a simple technical definition, the smart grid represents a philosophical paradigm shift for the power system. It signifies a transition from a 'supplier-centric, unidirectional, passive consumption' model to a 'participant-centric, bidirectional, active prosuming' model.
A Shift in Paradigm
Legacy Grid: "Consume the electricity we produce" VS Smart Grid: "Let's produce, share, and save together"
3.2 Core Components of the Smart Grid
3.2.1 Advanced Metering Infrastructure (AMI)
The starting point of the smart grid is the smart meter. Replacing traditional analog electricity meters with digital smart meters allows for the collection of real-time power usage data in 15-minute intervals. This is a fundamentally different change from having a meter reader simply come and read numbers.
In South Korea, the intelligent power grid project began in earnest in 2020, with plans to complete the installation of smart meters in 22.5 million households nationwide by 2024. To date, about 18 million households have had them installed, reaching about 80% of the total.
3.2.2 Distributed Energy Resources (DERs)
The core of the smart grid is the effective integration of distributed energy resources. DERs include the following elements:
- Distributed Generation: Rooftop solar, small wind turbines, fuel cells, micro-CHP, etc.
- Energy Storage Systems: Lithium-ion batteries, flywheels, compressed air storage, etc.
- Demand Response Resources: Smart appliances, electric vehicles, industrial load control, etc.
- Power Conversion Devices: Smart inverters, power conditioners, etc.
What is particularly noteworthy is that these DERs do not just exist individually; they can be operated as a single 'Virtual Power Plant (VPP)' through an integrated management system.
3.2.3 Demand Response (DR)
Demand Response is one of the core functions of the smart grid, a program where consumers actively adjust their electricity usage based on the power supply and demand situation. This is a revolutionary concept that changes the old paradigm of 'supply follows demand' to 'demand can also adjust to match supply'.
Looking at the demand response program operated by KEPCO, about 4,900 MW of DR resources were registered as of 2023. This is equivalent to the capacity of 3-4 large power plants and makes a significant contribution during peak electricity hours in the summer.
🏠 Residential Demand Response Example
This is a program where households receive electricity bill discounts for raising their smart air conditioner's set temperature by 2 degrees and delaying dishwasher operation until after 10 PM during peak hours (2-5 PM) in the summer. It achieves significant overall demand reduction while minimizing inconvenience to individual households.
3.2.4 Energy Management System (EMS)
The EMS acts as the 'brain' of the smart grid. This system analyzes vast amounts of real-time data to calculate optimal operating strategies and automatically issues control commands. It's a concept similar to a traffic control center that monitors traffic conditions in real time to control traffic lights.
A modern EMS utilizes artificial intelligence and machine learning technologies to perform the following functions:
- Demand forecasting and generation planning optimization
- Renewable energy output prediction and variability management
- Energy storage system charging and discharging optimization
- Power quality monitoring and automatic control
- Fault prediction and preventive maintenance scheduling
3.3 Key Advantages of the Smart Grid
3.3.1 Optimization of Renewable Energy Integration
The biggest advantage of the smart grid is its ability to solve the intermittency problem of renewable energy. While the fluctuating output of solar and wind was a major issue for the legacy grid, the smart grid has various tools to predict and respond to it.
In Germany's case, the share of renewable energy reached 52% of total electricity production in 2023, yet grid stability was maintained thanks to smart grid technology. In particular, Germany's ancillary services market, known as 'Regelleistung', has a well-functioning mechanism that compensates for the variability of renewables with various flexibility resources.
3.3.2 Self-Healing Capability
One of the innovative features of the smart grid is 'self-healing'. This is the ability of the system to diagnose problems on its own when a fault or accident occurs, minimize the impact, and supply power through alternative routes.
For example, if a fault occurs on a distribution line:
- Smart sensors immediately detect the fault and identify its location.
- An automated switch isolates the faulty section.
- Power is rerouted to supply the unaffected sections through an alternative path.
- Precise fault location and cause information is sent to the repair crew.
This entire process happens automatically within seconds to minutes, drastically reducing the outage time experienced by customers.
3.3.3 Improved Power Quality
The smart grid can monitor and improve power quality in real time. It can instantly detect issues like voltage fluctuations, frequency deviations, and harmonic distortions and automatically take corrective actions, minimizing the impact on sensitive electronic equipment and production facilities.
3.3.4 Maximized Energy Efficiency
Real-time data and AI analysis can optimize energy usage patterns. Individual consumers can analyze their usage to save energy, and at the system level, peak demand can be distributed to reduce the need for new infrastructure investment.
3.4 Global Smart Grid Adoption Status
3.4.1 USA: California's Leading Example
California is the most aggressive state in the U.S. in adopting the smart grid. Pacific Gas & Electric (PG&E) began installing smart meters in 2006 and has now equipped 5.5 million households. This has resulted in annual energy savings of 2 billion kWh, equivalent to the electricity used by 400,000 homes for a year.
California's 'Time-of-Use' rate plan is a prime example of smart grid success. By setting higher rates during peak demand hours (4-9 PM) and lower rates during off-peak late-night hours, it has flattened the demand curve. As a result, summer peak demand has decreased by an average of 13%.
3.4.2 Germany: Energiewende and the Smart Grid
Germany's 'Energiewende' (energy transition) is a project that would be impossible without the smart grid. As of 2023, renewable energy accounts for 52% of Germany's electricity, a feat made possible by the support of smart grid technology.
A noteworthy aspect of Germany's smart grid strategy is the concept of 'Sector Coupling'. This approach integrates the power, heat, and transport sectors to maximize energy efficiency. For example, surplus renewable energy is used to produce and store hydrogen, which can then generate electricity via fuel cells when needed, or EV batteries can be used as storage for the grid.
3.4.3 Japan: A Smart Grid Focused on Disaster Resilience
After experiencing the 2011 Great East Japan Earthquake and the Fukushima nuclear disaster, Japan is building a smart grid with a strong focus on 'disaster resilience'. In particular, it is concentrating on 'local energy self-sufficiency' models using microgrids and energy storage systems.
The 'Smart City Aoba-Yamadai' project in Sendai is a representative case. While rebuilding an area damaged by the earthquake, a microgrid combining solar, fuel cells, and storage batteries was constructed. It is designed to operate grid-connected during normal times but can switch to island mode for at least 3 days of self-sufficiency during emergencies.
3.4.4 China: A Mega-Scale Smart Grid Project
China is undertaking the world's largest investment in the smart grid. The State Grid Corporation of China has invested a total of 4 trillion yuan (approx. $550 billion) from 2009 to 2020 to promote the construction of a 'Strong Smart Grid'.
A particularly notable feature of China's strategy is the combination of an 'Ultra High Voltage (UHV)' transmission network with the smart grid. To efficiently transmit electricity generated from wind and solar in the western regions to the major cities in the east, China developed ±1100kV DC transmission technology and is integrating it with smart grid technology to unify the entire continent into a single intelligent power network.
3.4.5 South Korea: K-Green New Deal and the Smart Grid
South Korea began its full-scale adoption of the smart grid with the Jeju Smart Grid Testbed in 2009. In the 2020 K-Green New Deal, it was announced that a total of 42.7 trillion KRW would be invested in building an intelligent power grid by 2025.
The current status of South Korea's smart grid implementation includes:
- Smart Meters: Scheduled for completion in 22.5 million households by 2024 (currently 80% complete).
- Intelligent Substations: Digital protection and control systems introduced in 350 major substations of 154kV class or higher.
- Distribution Automation: Automation completed in 2,200 out of 2,831 distribution substations nationwide.
- AMI Rollout: Nationwide expansion of communication infrastructure and data collection/analysis systems.
4. Core Comparative Analysis
Now, let's systematically compare the legacy power grid and the smart grid. This comparison goes beyond mere technical differences to include the philosophies and values that each system represents.
4.1 System Architecture Comparison
| Aspect | Legacy Grid | Smart Grid | Key Differences |
|---|---|---|---|
| Power Flow | Unidirectional (Plant→Consumer) |
Bidirectional (Generation·Consumption·Storage Cycle) |
Emergence of the prosumer concept |
| Generation Structure | Centralized (Large-scale plants) |
Decentralized (Microgrids + Central plants) |
Realization of energy democracy |
| Control Method | Centralized Control (Top-down) |
Distributed Control (Distributed Intelligence) |
Ensures autonomy and adaptability |
| Data Utilization | Limited·Reactive (Monthly meter reads) |
Real-time·Predictive (15-min monitoring) |
Enables AI-based optimization |
| Resilience | Vulnerable to blackouts (Domino effect) |
Self-healing (Isolate·Reroute·Restore) |
Revolutionizes system stability |
4.2 Differences in Operational Philosophy
4.2.1 "Supply-Centric" vs. "Supply-Demand Balance"
The legacy grid operates on a strictly 'supply-centric' basis. When demand increases, more power plants are brought online; when demand decreases, generation is reduced. However, the smart grid pursues a 'dynamic balance of supply and demand'. If supply is short, demand can be reduced; if supply is abundant, it can be stored or used for other purposes, enabling bidirectional adjustment.
As a real-world example, KEPCO's demand response program reduced demand by a total of 1,200 MW on the day of peak electricity usage in the summer of 2023 (August 16). This is equivalent to the capacity of one large power plant, resolving the issue from the demand side without building new generation facilities.
4.2.2 "Predict and Respond" vs. "Adapt and Learn"
The legacy grid operates in a 'predict and respond' mode. It predicts future demand based on historical data and sets generation plans accordingly. In contrast, the smart grid adopts an 'adapt and learn' approach. It adapts to situations based on real-time data, and AI learns patterns to perform increasingly sophisticated optimizations.
Differences in Problem-Solving Approach
Legacy Way: "If a problem arises, solve it with more capacity" (Scale-up)
VS
Smart Way: "Prevent problems before they happen, and if they do, solve them intelligently and decentrally" (Scale-out)
4.3 Economic Comparison
4.3.1 Initial Investment Cost (CAPEX)
In terms of initial investment alone, the smart grid is significantly more expensive. According to KEPCO's analysis, the total investment required for a nationwide smart grid in South Korea is estimated at about 27 trillion KRW. This cost includes smart meter installation, communication infrastructure, and system upgrades.
On the other hand, legacy grid maintenance costs about 2-3 trillion KRW annually, which seems much cheaper in the short term. However, a different picture emerges from a long-term perspective.
4.3.2 Operating Costs (OPEX) and Benefits
The true value of the smart grid is revealed in its operational cost savings and various benefits. According to a joint study by KEPCO and the Korea Power Exchange (KPX), the annual benefits of adopting a smart grid are as follows:
Summing these up, an annual benefit of about 2.8 trillion KRW is generated, which means the initial investment of 27 trillion KRW could be recouped in about 10 years. Moreover, the benefits are expected to grow over time due to AI learning effects and technological advancements.
4.3.3 Hidden Costs: The Risk of Stranded Assets
A significant risk to consider when sticking with the legacy grid is 'stranded assets'. As carbon-neutral policies accelerate, there is a growing possibility that fossil fuel-based infrastructure, such as coal-fired power plants, will be shut down prematurely.
In fact, to achieve carbon neutrality by 2050, South Korea plans to reduce the share of coal power from the current 40% to 21.8% by 2030. This implies that a significant number of existing coal plants may be decommissioned before reaching their planned lifespan.
"In an era of energy transition, clinging to legacy infrastructure is like continuing to invest in landline telephone business in the age of smartphones. It may seem cheaper now, but in the long run, it could be the most expensive choice." - Korea Energy Economics Institute, Smart Grid Economic Feasibility Analysis Report
4.4 Environmental Impact Comparison
4.4.1 Carbon Emissions
From an environmental perspective, the difference between the two systems is stark. The legacy grid relies on centralized, fossil fuel-based generation, resulting in high carbon emissions. South Korea's power sector emits about 200 million tons of CO₂ annually, accounting for about 30% of the country's total emissions.
In contrast, the smart grid can significantly reduce carbon emissions by maximizing the integration of renewable energy. The successful implementation of South Korea's "Renewable Energy 3020" plan (to achieve 20% renewables by 2030) is contingent upon the establishment of a smart grid.
4.4.2 Energy Efficiency
The smart grid is also superior in terms of energy efficiency. It is analyzed that overall energy efficiency can be improved by 15-20% through demand optimization via real-time data analysis, minimization of transmission and distribution losses, and maximized energy utilization using storage systems.
4.5 Social Impact Comparison
4.5.1 Energy Democracy
The smart grid introduces a new paradigm of 'energy democracy'. Whereas large power companies traditionally held a monopoly on producing and supplying electricity, the smart grid allows ordinary citizens to become prosumers, directly participating in energy production and trading.
The case of Germany's 'Bürgerenergiegenossenschaft' (citizen energy cooperatives) is a prime example. As of 2023, there are 1,750 citizen energy cooperatives active across Germany, collectively owning a total of 3.2 GW of renewable generation capacity.
4.5.2 Energy Welfare and Equity
The smart grid is also positive from an energy welfare perspective. It provides opportunities to reduce electricity bill burdens through energy-saving consultations based on real-time usage monitoring and time-of-use rate plans.
In particular, linking 'energy voucher' programs for low-income households with the smart grid can provide a more fundamental solution by improving energy efficiency, rather than simply subsidizing bills.
🏘️ Smart Grid and Energy Welfare
The 'Smart Energy Welfare' program, implemented by the Seoul Metropolitan Government since 2022, provides low-income households with smart plugs and energy monitoring apps, achieving an average power saving of 15%. It's a great example of how technology can benefit the socially vulnerable.
4.6 Security and Safety Comparison
4.6.1 Cybersecurity
The legacy grid, being a relatively closed system, had less exposure to cyberattacks. However, the smart grid, composed of numerous internet-connected IoT devices, has a much wider 'Attack Surface'.
To address this, the smart grid adopts a 'Defense in Depth' strategy:
- Encryption: All communication data is strongly encrypted (AES-256 or higher).
- Authentication: PKI-based digital certificates for device and user authentication.
- Network Segmentation: Critical facilities are isolated on separate, secure networks.
- Real-time Monitoring: 24/7 operation of AI-based anomaly detection systems.
4.6.2 Physical Security
From a physical security standpoint, the smart grid is safer. Thanks to its decentralized structure, the entire system is not paralyzed even if some facilities are attacked, and it can recover quickly with its self-healing capabilities. In contrast, the legacy grid faces the risk of a wide-area blackout if just a few key facilities are hit.
5. The Intelligent Grid Created by AI and Data
The key differentiating factors of the smart grid are artificial intelligence (AI) and big data. With the introduction of AI into the power grid, operations have become capable of moving from 'Reactive' to 'Predictive,' and further to 'Autonomous.' This represents a revolutionary change for the power industry.
5.1 Innovation in AI-Based Demand Forecasting
5.1.1 Limitations of Traditional Forecasting Methods
In the legacy grid, demand was primarily forecasted using statistical models. Regression analysis, using variables like historical usage patterns, temperature, and day of the week, was a typical method. While this approach was somewhat accurate for stable patterns, it struggled to respond to exceptional situations like the COVID-19 pandemic or new lifestyle changes.
In fact, in early 2020, many power companies worldwide failed in their demand forecasting. As remote work spread, residential power consumption increased while commercial usage decreased, rendering traditional forecasting models obsolete.
5.1.2 The Evolution of Machine Learning-Based Forecasting
In an AI-based smart grid, machine learning algorithms perform much more complex and dynamic forecasting. They don't just look at historical data; they comprehensively analyze numerous variables that change in real time:
- Weather Data: Temperature, humidity, wind speed, solar irradiance, barometric pressure, etc.
- Socioeconomic Indicators: Oil prices, stock prices, consumer sentiment, event schedules, etc.
- Behavioral Patterns: Lifestyle changes of individual consumers.
- Real-time Feedback: 15-minute interval usage data from smart meters.
- External Shocks: Pandemics, natural disasters, major events, etc.
The AI forecasting system developed by Google DeepMind in collaboration with the UK's National Grid ESO improved prediction accuracy by 50% compared to traditional methods. Particularly in renewable energy generation forecasting, it reduced the day-ahead prediction error to within 5%, significantly improving grid stability.
5.2 Real-Time Optimization and Automated Control
5.2.1 Optimization of Distributed Energy Resources (DERs)
The true innovation of the smart grid lies in its ability to coordinate numerous Distributed Energy Resources (DERs) in real time. AI orchestrates solar panels, residential batteries, electric vehicles, heat pumps, and smart appliances to operate as one integrated system.
For example, if solar generation surges at 2 PM on a sunny day:
- AI calculates the surplus power in real time.
- It checks the charge status of residential batteries and sends a command to charge them.
- It adjusts EV charging schedules to charge at the optimal time.
- It activates smart water heaters to store energy as heat.
- If necessary, it places an order to sell the surplus power on the electricity market.
This entire process happens automatically within seconds, maximizing the efficiency of the overall system while minimizing inconvenience to individual consumers.
5.2.2 The Emergence of the Virtual Power Plant (VPP)
A revolutionary concept made possible by the advancement of AI is the 'Virtual Power Plant (VPP)'. This technology integrates numerous geographically dispersed, small-scale energy resources through software, allowing them to operate as if they were a single, large power plant.
Germany's Next Kraftwerke operates the largest VPP in Europe, aggregating a total of 13,000 distributed energy resources to secure a virtual generation capacity of 10 GW. This is equivalent to the capacity of ten large nuclear power plants.
5.3 Predictive Maintenance and Asset Management
5.3.1 Predicting Equipment Failure
AI is also revolutionizing the maintenance of power infrastructure. While 'preventive maintenance' based on regular inspections was the norm, 'predictive maintenance'—where AI monitors equipment status in real time to predict failures in advance—is now possible.
AI analyzes data collected by IoT sensors installed on power equipment to detect early signs of anomalies. By monitoring things like temperature rises in transformers, changes in transmission line vibration patterns, and the degradation of insulators in real time, action can be taken before a failure occurs.
The AI-based predictive maintenance system introduced by KEPCO has achieved a transformer failure prediction accuracy of over 90%. This saves approximately 30 billion KRW annually in failure recovery and outage loss costs.
5.3.2 Digital Twin Technology
A technology gaining recent attention is the 'Digital Twin'. This involves creating a virtual replica by digitally modeling every component of the actual power grid. Since real operational data is reflected in the digital twin in real time, various scenarios can be simulated to derive optimal operational plans.
General Electric's (GE) Predix platform, for instance, has built a digital twin of wind turbines, achieving a 20% increase in generation and a 25% reduction in operating costs.
5.4 Cybersecurity and AI
5.4.1 AI-Based Security Threat Detection
The complexity and connectivity of the smart grid create new security threats. Millions of IoT devices, real-time data communication, and remote control systems can all become potential attack points. To defend against this, an AI-based security system is essential.
AI security systems learn normal network traffic patterns to instantly detect suspicious access or abnormal data flows. In particular, they can block new, previously unknown attack methods like 'zero-day attacks' through behavioral pattern analysis.
5.4.2 Blockchain and Energy Trading
With the increase in distributed energy resources, interest in Peer-to-Peer (P2P) energy trading is also growing. What if you could directly buy and sell electricity generated from your neighbor's rooftop solar? The technology making this future possible is blockchain.
Blockchain ensures secure transactions without a central authority, which can activate direct trading among small-scale energy producers. Australia's Power Ledger is already operating a P2P energy market with thousands of participating households through its blockchain-based energy trading platform.
🔗 The Future of Blockchain Energy Trading
In the Brooklyn Microgrid project, residents are selling electricity generated from their own rooftop solar panels directly to their neighbors via blockchain. Transaction fees are over 50% cheaper than with traditional power companies, and 100% of the sales revenue goes to the producer. It's the true realization of energy democracy.
5.5 Big Data and Customer Experience Innovation
5.5.1 Personalized Energy Services
By analyzing the detailed usage data collected from smart meters, AI can accurately understand the energy consumption patterns of individual households. Based on this, it can provide personalized energy-saving consultations, recommend optimal rate plans, and notify about appliance replacement timings.
The UK's Octopus Energy has achieved the number one customer satisfaction rating with its AI-based personalized services. By analyzing customer usage patterns, it offers real-time tariffs that change every 30 minutes and helps customers save an average of over 30% on their electricity bills through services like EV charging optimization and automated home battery operation.
5.5.2 Social Utilization of Energy Big Data
Power usage pattern data provides insights that go beyond individual customer services to benefit society as a whole. Just as Google analyzed the decrease in mobility during the early days of COVID-19 using mobile phone location data, power usage patterns can be used to understand economic activity, population movement, and lifestyle changes in real time.
This data can be utilized in various fields such as urban planning, transportation policy, commercial district analysis, and real estate policy. Of course, anonymization and aggregation processes are necessary to protect personal information, but the social value of this big data is expected to be very large.
6. Economic Feasibility and Social Impact
The smart grid is more than just a technological innovation; it has wide-ranging impacts on the economy and society as a whole. It acts as a catalyst for creating new industrial ecosystems, generating jobs, realizing energy welfare, and revitalizing local economies.
6.1 Macroeconomic Effects
6.1.1 Creation of New Industrial Ecosystems
The smart grid is breaking down the boundaries of the traditional power industry and creating new convergent industries. Combinations like Energy + IT, Energy + Finance, and Energy + Services are giving rise to unprecedented business models.
In South Korea, new industries related to the smart grid are also growing rapidly. Traditional power equipment companies like LS Electric, Hyosung Heavy Industries, and Doosan Enerbility are expanding their business areas into smart grid solutions, while IT companies like Naver Cloud and Kakao Enterprise are also entering the energy sector.
6.1.2 Strengthening National Competitiveness
Smart grid technology is a core infrastructure that will determine national competitiveness in the 21st century. A stable and efficient power supply is the foundation for future industries such as manufacturing, data centers, and smart cities.
For countries like South Korea with high energy import dependency, improving energy efficiency through the smart grid translates into national economic benefits. South Korea's annual energy import bill is about 150 trillion KRW; a 15% improvement in energy efficiency via the smart grid could lead to a 22 trillion KRW improvement in the trade balance annually.
6.2 Microeconomic Effects
6.2.1 Impact on Household Economies
The smart grid can significantly reduce the electricity bill burden for ordinary households. It's analyzed that an average saving of 15-30% on electricity bills is possible through real-time pricing, demand response programs, and energy efficiency improvements.
More importantly, it offers the opportunity to generate income as a prosumer. Households with rooftop solar can sell surplus electricity, or earn additional income through Vehicle-to-Grid (V2G) services using their EV batteries.
6.2.2 Enhancing Corporate Competitiveness
Businesses can also gain significant economic benefits from the smart grid. In particular, energy-intensive manufacturing companies can reduce their electricity costs by 20-40% by participating in demand response programs, optimizing self-generation, and utilizing energy storage systems.
POSCO has installed a 100 MW energy storage system at its Pohang steelworks, achieving annual electricity cost savings of 15 billion KRW. The method involves charging the battery with cheap off-peak electricity at night and discharging it during peak hours to lower the maximum demand power.
6.3 Creation of Social Value
6.3.1 Realizing Energy Welfare
The smart grid is a powerful tool for realizing energy welfare. Previously, support for low-income households was often limited to simple bill discounts. The smart grid, however, can offer more fundamental and sustainable solutions.
For example, installing shared solar facilities in low-income neighborhoods and connecting them to the smart grid allows residents to use clean energy at a lower cost. New York's 'Community Solar' program has achieved success in reducing electricity bills for low-income households by over 20% through this model.
6.3.2 Revitalizing Local Communities
The smart grid also contributes to the revitalization of local economies by increasing local energy self-sufficiency. The 'local production for local consumption' model of energy, where renewable energy produced locally is consumed locally and the surplus is sold to other regions, is spreading.
Jeju Island is pursuing energy self-sufficiency based on the smart grid with the goal of achieving a 'Carbon Free Island' by 2030. Currently, its renewable energy share has reached 17%, resulting in an annual energy import substitution effect of 120 billion KRW.
6.4 Environmental Benefits
6.4.1 Carbon Emission Reduction
The most significant environmental value of the smart grid is the reduction of carbon emissions. A substantial reduction in greenhouse gases is possible through expanded integration of renewable energy, improved energy efficiency, and demand optimization.
The International Energy Agency (IEA) projects that the global expansion of the smart grid could reduce CO₂ emissions by 1.6 billion tons annually by 2030. This is equivalent to 20 times the total emissions of Germany.
6.4.2 Improved Air Quality
Along with carbon reduction, the effect on air quality is also considerable. As the operation of fossil fuel power plants decreases, air pollutants such as fine dust, sulfur oxides, and nitrogen oxides are also reduced.
According to an analysis by the Seoul Air Quality Information Center, the expansion of the smart grid in the metropolitan area is expected to improve annual PM2.5 concentrations by 3-5 µg/m³. This corresponds to preventing 3,000 premature deaths annually.
6.5 Fostering an Innovation Ecosystem
6.5.1 Expanding Opportunities for Startups and SMEs
The smart grid provides opportunities for new players to enter the traditionally large-corporation-dominated power industry. Innovative startups are emerging in various fields such as energy data analytics, IoT sensors, mobile apps, and blockchain.
In South Korea, smart grid-specialized startups like EGIS-tech (EMS solutions), SolarConnect (solar monitoring), and IONICS (ESS control) are growing rapidly. They are creating new value by targeting niche markets that are often overlooked by large corporations.
6.5.2 R&D and Talent Development
The smart grid is a field that requires a multidisciplinary approach, involving electrical engineering, computer science, data science, and economics. Accordingly, universities are expanding related departments and research institutes, and the government is increasing investment in training professional talent.
KAIST established the 'Graduate School of Green Growth' in 2021 to cultivate smart grid experts, and Seoul National University is conducting interdisciplinary research in its 'Department of Energy Systems Engineering'. In the industry, companies like KDN, KEPCO E&C, and LS Electric are also actively investing to secure professional talent.
7. Global Adoption Cases and Lessons
The smart grid has now moved beyond the laboratory and is being operated in various parts of the world. By analyzing the success factors and lessons from failures in each country's adoption cases, we can gain important insights for the future expansion of the smart grid.
7.1 Analysis of Leading Countries
7.1.1 Denmark: The Energy Island Project
Denmark is one of the first countries in the world to achieve carbon neutrality, with smart grid technology playing a key role. The 'Energy Island' project, in particular, is gaining attention as a model case for future smart grids.
The island of Bornholm, with a population of 40,000, has achieved a 100% renewable energy supply based on wind and solar power. The core of this is an advanced smart grid system where everything from weather forecasting to demand management is automated by AI.
🏝️ Innovation on Bornholm Island
Bornholm operates flexibly, exporting surplus wind power to mainland Denmark and Sweden in the winter, and importing power from the mainland in the summer. The amount of electricity exported and imported is optimized in real time by AI, and residents' electricity bills are actually 20% lower than on the mainland.
7.1.2 The Netherlands: Circular Economy and the Smart Grid
The Netherlands presents a unique case where the philosophy of the 'Circular Economy' is integrated into the smart grid. In Amsterdam's 'Circular Economy Zone,' all available energy sources—biogas from waste, digester gas from sewage treatment plants, and rooftop solar—are managed integrally by the smart grid.
What's particularly noteworthy is the 'Energy Sharing Platform.' All buildings in the area are connected to a single network, sharing surplus energy in real time. For example, surplus stored solar power from an office building at night is sent to a residential area, and on weekends, the surplus from the residential area is sent to the commercial district.
7.1.3 Singapore: A City-State's Smart Grid Strategy
Singapore is overcoming the constraints of its small land area and high population density with a smart grid. As part of its 'Smart Nation' plan, the ongoing smart grid initiative aims to turn the entire city into a single, integrated energy system.
Singapore's differentiated approach is 'building-to-building energy trading.' On days when high-rise office buildings have high solar generation, they sell electricity to nearby commercial facilities, and waste heat from industrial areas is used for heating and cooling in nearby residential complexes, realizing city-level energy optimization.
7.2 Cases in Major Asian Countries
7.2.1 Japan: Design Focused on Disaster Resilience
Since the 2011 Great East Japan Earthquake, Japan's smart grid has been designed with 'Resilience' as the top priority. As a key part of the 'Society 5.0' strategy, the smart grid is being built with a dual structure that provides efficiency in normal times and survivability in emergencies.
The 'Smart City' project in Higashimatsushima, Miyagi Prefecture, is a prime example. While rebuilding an area completely destroyed by a tsunami, a microgrid was constructed. It is designed to operate grid-connected during normal times but can operate independently for three days in an emergency.
7.2.2 China: A Mega-Scale Smart Grid Experiment
The scale of China's smart grid is overwhelming. The smart grid project, promoted as a core part of the 'Made in China 2025' strategy, shows an approach on a different level from other countries.
In particular, the 'Smart Grid Demonstration Zone' in Nanjing, Jiangsu Province, is the world's largest smart grid, targeting a population of 20 million. More than 100,000 smart meters, 5,000 charging stations, and 500 microgrids are connected into a single system.
China's success factors are 'government-led large-scale investment' and 'unification of technical standards.' Rapid expansion was possible because the State Grid Corporation unified national smart grid standards, and local governments actively supported pilot projects.
7.3 Failure Cases and Lessons Learned
7.3.1 Italy: Lack of Technical Maturity
In the early 2000s, Italy was one of the most proactive countries in Europe in adopting smart meters. The Telegestore project, led by Enel, was a massive undertaking to install 30 million smart meters.
However, due to the limitations of the technology at the time, it failed to achieve the expected effects. Slow communication speeds made real-time data collection difficult, and security and compatibility issues persisted. Ultimately, the system had to be completely replaced in the 2010s.
7.3.2 Ontario, Canada: Consumer Backlash and Privacy Concerns
The province of Ontario, Canada, began deploying smart meters in 2004 but faced strong opposition from consumers. The main issues were concerns about privacy invasion and sharp rate hikes.
Concerns were raised that smart meters could track personal lifestyle patterns in too much detail, and the introduction of time-of-use rates, which caused some households' electricity bills to jump by more than 30%, became a political issue. Eventually, when a new government came to power in 2018, the rate system had to be reverted.
This case shows that social acceptability is as important as technical completeness. Without sufficient prior explanation and consumer protection measures, even the best technology can fail.
7.3.3 Victoria, Australia: Failure of Cost-Benefit Analysis
The smart meter project in Victoria, Australia, is a case of failure due to flaws in the cost-benefit analysis. The initial plan projected that a total investment of $2 billion to deploy smart meters would generate $3 billion in benefits.
However, in reality, installation costs increased by 50% more than expected, and consumer behavior change was far less than anticipated. Ultimately, the project's economic viability was questioned as the benefits did not outweigh the costs.
"A smart grid cannot succeed on technical excellence alone. It can only succeed when social acceptability, economic viability, and policy sustainability are all in place." - International Energy Agency (IEA), Smart Grid Roadmap Report
7.4 South Korea's Smart Grid Journey
7.4.1 Jeju Smart Grid Testbed
South Korea's smart grid history began in 2009 with the Jeju Testbed. This project, targeting 6,000 households in the Gujwa area, served as a testbed for developing a Korean-style smart grid model.
After five years of demonstration, it achieved an 8.8% reduction in peak power and a 6.7% improvement in energy efficiency. In particular, meaningful data was secured from V2G demonstrations linked with electric vehicles, wind power variability management, and microgrid operations.
7.4.2 K-Green New Deal and Large-Scale Expansion
With the announcement of the K-Green New Deal in 2020, South Korea's smart grid has officially transitioned from the demonstration phase to the commercialization phase. A large-scale project is underway to install smart meters in 22.5 million households nationwide and to build 350 intelligent substations by 2025.
The achievements to date include:
- 80% smart meter penetration rate (as of 2024)
- 75% completion of AMI rollout
- 85% distribution automation rate
- Secured 4,900 MW of demand response resources
7.4.3 Next-Generation Power Grid and Future Plans
South Korea is currently establishing a roadmap for the 'Next-Generation Smart Grid'. The plan is to invest a total of 60 trillion KRW by 2030 to complete a world-class smart grid.
The main goals are:
- Achieve a 30% share of renewable energy and stable grid operation
- Build an AI-based autonomous power grid
- Commercialize a distributed energy trading platform
- Realize sector coupling between the power grid, transport, and heat supply
7.5 Analysis of Success Factors
7.5.1 Technical Factors
An analysis of commonalities in successful smart grid projects reveals the importance of the following technical factors:
- Standardization: Ensuring interoperability by adopting open standards.
- Security: Security by Design, considering security from the initial design phase.
- Scalability: Designing an architecture that allows for phased expansion.
- Reliability: Guaranteeing stability equal to or greater than the existing system.
7.5.2 Economic Factors
- Clear Business Model: The path to investment recovery and the revenue structure must be clear.
- Phased Investment: A step-by-step investment approach is better for risk management than a single large investment.
- Diverse Benefits: Considering not only electricity cost savings but also environmental and social benefits.
7.5.3 Social Factors
- Stakeholder Engagement: Gathering opinions from consumers, local communities, and related companies from the initial stages.
- Education and Communication: Continuous communication about the necessity and benefits of the smart grid.
- Privacy Protection: A firm guarantee of personal data protection.
7.5.4 Policy Factors
- Government Commitment: Consistent policy promotion that is not swayed by political changes.
- Regulatory Reform: An institutional framework that supports new technologies and business models.
- Incentive Design: An incentive system that encourages voluntary participation from market players.
8. Challenges and Solutions
The smart grid does not only present a rosy future. There are various challenges to overcome in technical, economic, social, and institutional aspects. Clearly recognizing these challenges and seeking solutions is a prerequisite for a successful smart grid deployment.
8.1 Technical Challenges
8.1.1 Increased System Complexity
The biggest technical challenge of the smart grid is the exponential increase in system complexity. While the legacy grid consisted of a few dozen large power plants and tens of thousands of major facilities, the smart grid is a hyper-complex system connecting tens of millions of smart meters, millions of distributed generation units, and tens of thousands of energy storage devices.
This complexity can lead to unforeseen problems. The 2019 blackout in the UK was caused by the simultaneous failure of a wind farm and a gas power plant, but analysis showed that the complex interactions within the smart grid system amplified the problem.
8.1.2 Cybersecurity Threats
The digitalization and networking of the smart grid create new cybersecurity threats. Incidents like the 2015 Ukrainian power grid hack and the 2021 Colonial Pipeline ransomware attack show that energy infrastructure is a prime target for cyberattacks.
The smart grid has a very large Attack Surface. This is because there are millions of entry points, from individual household smart meters to central control systems.
Building a Multi-layered Security System:
- Physical Security: Control of physical access to critical facilities.
- Network Security: Firewalls, VPNs, network segmentation.
- Application Security: Code encryption, digital signatures.
- Data Security: End-to-end encryption, privacy protection.
- Operational Security: Real-time monitoring, intrusion detection.
8.1.3 Interoperability Issues
The smart grid is a system where numerous devices from various manufacturers are connected. However, interoperability issues arise because each manufacturer uses different communication protocols and data formats.
For example, problems where a smart meter from company A cannot communicate with an EMS from company B, or an inverter from company C does not work with a battery from company D, frequently occur in the field.
Solutions:
- Adoption of International Standards: Utilize international standards like IEC 61850, IEEE 2030.
- Open Architecture: Build an open platform that is not dependent on a specific vendor.
- Interoperability Testing: Conduct thorough compatibility verification before actual deployment.
8.2 Economic Challenges
8.2.1 Burden of Initial Investment Costs
The biggest economic barrier to the smart grid is the massive initial investment cost. In South Korea's case, the estimated total investment for a nationwide smart grid is about 27 trillion KRW, which is 40% of KEPCO's annual revenue (approx. 70 trillion KRW).
The problem is that the return on this investment is spread over a long period. With a payback period of 10-15 years, it is difficult to attract private investment that prioritizes short-term profitability.
💰 Creative Financial Models
ESCO (Energy Service Company) Model: An energy service company bears the initial investment and recovers the cost through energy savings. Customers can enjoy the benefits of the smart grid without an initial outlay.
Green Bonds: Bonds specialized for environmental projects, allowing for financing at lower interest rates than general corporate bonds.
8.2.2 Delays in the Regulatory Framework
The smart grid is a technology that requires a fundamental change in the existing power industry's regulatory framework. However, regulatory reform often proceeds much more slowly than technological development, hindering innovation.
For example, in South Korea, it is still legally prohibited for individuals to sell the electricity they generate directly to other individuals. This impedes the development of innovative business models like P2P energy trading or local energy sharing.
8.2.3 Risk of Stranded Legacy Assets
During the transition to a smart grid, there is a risk that existing infrastructure will become 'Stranded Assets'. In particular, there is a high probability that coal-fired power plants, existing transmission and distribution facilities, and analog metering equipment will be decommissioned prematurely before reaching their planned lifespan.
In KEPCO's case, a significant portion of its total assets of 200 trillion KRW is expected to need replacement within the next 10-20 years. This could act as pressure to increase electricity rates.
8.3 Social Challenges
8.3.1 Digital Divide and Equity
To enjoy the benefits of the smart grid, a certain level of digital literacy is required. One must be able to check power usage via a smartphone app, understand time-of-use rates, and utilize smart appliances.
However, for the elderly or low-income groups, using such technology can be difficult, potentially excluding them from the benefits of the smart grid. There is a concern about a 'regressive effect', where only the tech-savvy save on electricity bills, while those less familiar with technology end up paying relatively more.
8.3.2 Privacy and Personal Data Protection
Since smart meters measure electricity usage every 15 minutes, analyzing this data can reveal a household's lifestyle patterns very accurately. It can show when they wake up, when they leave the house, and which appliances they use and for how long.
If this data is misused, it could lead to serious privacy invasions. In Germany, for instance, more than 30% of households refuse to install smart meters due to privacy concerns.
Privacy Protection Measures:
- Data Minimization: Collect only the minimum data necessary for the purpose.
- Anonymization: Process data to make personal identification impossible.
- User Control: Grant users the right to control the collection and use of their data.
- Transparency: Clearly disclose the purpose of data collection and how it will be used.
8.3.3 Ensuring Social Acceptance
No matter how good a technology is, it cannot succeed without social acceptance. The same applies to the smart grid; it can only succeed if citizens understand its necessity and benefits and participate voluntarily.
However, in reality, it is often difficult for the general public to understand complex technology, and short-term inconveniences (installation work, system changes, etc.) are often felt more strongly than long-term benefits.
8.4 Institutional Challenges
8.4.1 The Need for Regulatory Innovation
The smart grid is a technology that breaks down the boundaries of the existing power industry. It creates a new ecosystem where all areas converge, moving away from the old structure where generation, transmission, distribution, and sales were clearly separated.
However, the current Electric Utility Act is still based on the old structure, which obstructs new business models. For example:
- Prohibition of direct electricity trading between individuals.
- Ambiguous legal status of energy storage systems.
- Lack of regulatory standards for virtual power plants.
- Restrictions on the independent operation of microgrids.
8.4.2 International Cooperation and Standardization
As the smart grid is a global technology, international cooperation and standardization are essential. However, unifying standards is not easy due to the differences in each country's power systems and regulatory environments.
In Northeast Asia, in particular, there are concerns about compatibility issues as South Korea, China, and Japan are each pursuing different technical standards. This is an important challenge to consider for future regional grid interconnection or technology exports.
8.5 Integrated Solutions
8.5.1 A Phased Approach
Trying to solve all challenges at once is more likely to lead to failure. Instead, a more realistic approach is to set priorities and proceed in stages:
- Phase 1: Foundation Building (Smart meter deployment and basic infrastructure)
- Phase 2: Demand Response and Energy Efficiency Improvement
- Phase 3: Integration of Distributed Energy Resources
- Phase 4: AI-based Autonomous Operation System
- Phase 5: A Complete Digital Energy Ecosystem
8.5.2 Multi-Stakeholder Participation
The success of the smart grid requires the participation and cooperation of all stakeholders, including the government, power companies, technology firms, consumers, and civil society. Transparent communication and opinion gathering are especially crucial from the initial stages.
8.5.3 Adaptive Governance
The pace of technological development is fast, making it difficult to predict and plan everything in advance. Therefore, an 'Adaptive Governance' framework that can flexibly adapt to change is needed. This involves continuously improving policies and institutions through regular evaluation and feedback.
9. Future Outlook and Roadmap
The future of the smart grid signifies more than just the digitalization of the legacy grid; it means the birth of a completely new energy ecosystem. The outlook suggests a future where AI autonomously operates the power grid in the 2030s, individuals freely trade energy in the 2040s, and by 2050, carbon neutrality and energy democracy are fully realized.
9.1 Technology Development Roadmap
9.1.1 2025-2030: The Era of Advanced Intelligence
The next five years will be a period where the 'intelligence' of the smart grid comes into full swing. As AI and machine learning become central to grid operations, we will enter a stage where the system can perform optimizations on its own without human intervention.
Key Technological Advances:
- Advanced Digital Twins: Building a complete digital replica that simulates the entire power grid in real time.
- Expansion of Edge Computing: Performing real-time AI analysis at the substation and distribution panel level.
- 5G/6G Networks: Enhancing real-time control precision with ultra-low latency communication.
- Quantum Cryptography: Next-generation security technology to counter threats from quantum computing.
During this period, 'prediction accuracy' will become the key competitive advantage. As the accuracy of weather, demand, and equipment failure forecasts improves to over 90%, grid operation will completely shift from being 'reactive' to 'preventive'.
9.1.2 2030-2040: The Era of Autonomous Operation
The 2030s will be the era of a fully 'autonomous' power grid. Artificial intelligence will analyze hundreds of thousands of variables in real time, making far more sophisticated and rapid decisions than humans can.
🤖 Features of an Autonomous Power Grid
Self-Healing: Automatic recovery within 0.1 seconds of a fault occurring.
Self-Optimizing: Searching for and applying the optimal operating point in real time.
Self-Learning: Adapting to new patterns and situations on its own.
Self-Protecting: Automatically blocking cyberattacks and physical threats.
The key technology of this period will be 'Swarm Intelligence'. A technology where millions of distributed energy resources cooperate to optimize the entire system without central control, much like an ant colony, will be commercialized.
9.1.3 2040-2050: The Era of Complete Decentralization
The 2040s will be the era where a 'fully decentralized' energy system is realized. Every building will have the capability to produce, store, consume, and trade energy, and the traditional 'central-local' structure will be completely dismantled.
The symbol of this era is the 'Internet of Energy'. A completely open platform where anyone can freely produce and share energy, much like the current internet, will be established.
9.2 Evolution of Business Models
9.2.1 Energy as a Service
The paradigm of the future energy industry will shift from 'ownership' to 'service'. Instead of individuals purchasing solar panels or batteries themselves, subscribing to an energy service will become the mainstream.
"By 2030, you will subscribe to energy like you subscribe to Netflix. You'll get an unlimited supply of 24/7 stable, clean energy for a flat monthly fee, and individuals won't have to worry about complex equipment management or maintenance." - An executive from Tesla's energy division
9.2.2 The Rise of the Platform Economy
The 'platform economy' will also take hold in the energy sector. It is highly likely that platform companies like Google or Amazon will play an intermediary role connecting energy producers and consumers, diminishing the role of traditional utility companies.
9.2.3 Token Economy and Energy Trading
With the development of blockchain and cryptocurrency technologies, an 'energy token' economy will flourish. A new economic ecosystem will be created where individuals can issue tokens for the renewable energy they produce and trade them in real time.
9.3 Projected Social Changes
9.3.1 Realization of Energy Democracy
The full implementation of the smart grid means the realization of 'energy democracy'. No longer will a few large corporations monopolize energy; a democratic energy system will be established where all citizens can directly participate in energy production and trade.
9.3.2 Changes in Lifestyle
As energy becomes abundant and affordable, people's lifestyles will also change significantly. There will be no need to save on air conditioning or heating, worry about EV charging costs, or endure inconvenience for the sake of energy efficiency.
9.3.3 Emergence of New Professions
The smart grid will create new job categories:
- Energy Data Analyst: Analyzing energy patterns through big data analysis.
- Microgrid Designer: Designing optimal energy systems for specific regions.
- Energy Trader: Experts in trading on the real-time energy market.
- Smart Grid Cybersecurity Expert: Specialists in securing energy infrastructure.
- Energy Consultant: Advising individuals and businesses on energy optimization.
9.4 Geopolitical Impact
9.4.1 Redefining Energy Security
The spread of the smart grid and renewable energy will completely change the concept of 'energy security'. As regions become capable of producing their own energy and no longer rely on imported oil or gas, energy self-sufficiency will greatly improve.
9.4.2 The Rise of New Energy Superpowers
New 'renewable energy superpowers' will emerge, distinct from traditional energy powers (like Saudi Arabia, Russia, etc.). Countries with abundant solar and wind resources are likely to gain new energy hegemony.
9.5 Environmental Impact
9.5.1 Achieving Carbon Neutrality
The smart grid is a key tool for achieving carbon neutrality by 2050. The IEA predicts that the global build-out of smart grids could reduce CO₂ emissions by 6.5 billion tons annually by 2050. This is equivalent to 18% of current global emissions.
9.5.2 Ecosystem Restoration
As the use of fossil fuels dramatically decreases, air quality will improve, and acid rain and smog will disappear. Furthermore, the reduction in large-scale power plants and transmission lines will minimize the destruction of natural ecosystems.
9.6 South Korea's Future Strategy
9.6.1 K-Green New Deal 2.0
The South Korean government plans to promote the 'K-Green New Deal 2.0', investing a total of 100 trillion KRW in the smart grid sector by 2030. The main goals are:
- Achieve a 30% share of renewable energy.
- Complete the nationwide smart grid deployment.
- Commercialize an AI-based autonomous operation system.
- Create 300,000 jobs by fostering new energy industries.
9.6.2 Securing Global Competitiveness
South Korea has a great opportunity to secure global competitiveness in the smart grid sector by leveraging its strengths as an IT powerhouse. In particular, combining its superiority in key technologies like 5G, AI, and semiconductors with the smart grid can create new growth engines.
9.6.3 Northeast Asia Energy Cooperation
In the long term, the construction of a 'Northeast Asia Super Grid' connecting South Korea, China, Japan, Mongolia, and Russia is also being considered. This concept involves efficiently utilizing regional energy resources by connecting Mongolia's wind, China's solar, and Russia's hydropower through a smart grid.
9.7 Technical Limitations and Breakthroughs
9.7.1 Innovation in Energy Storage Technology
For the full realization of the smart grid, innovation in energy storage technology is essential. Current lithium-ion batteries have limitations in terms of cost and lifespan, so the development of new storage technologies is needed.
Promising next-generation technologies include:
- Solid-State Batteries: 2x energy density, 10x lifespan compared to current batteries.
- Gravity Storage: Large-scale, long-duration storage using gravity.
- Liquid Air Storage: Storing energy by liquefying air.
- Hydrogen Fuel Cells: Long-term, large-capacity energy storage.
9.7.2 Utilization of Quantum Computing
In the 2030s, quantum computing is expected to be utilized for smart grid optimization. As global optimization considering millions of variables simultaneously becomes possible, a level of precise control currently unimaginable will be realized.
9.7.3 Space-Based Solar Power
In the long term, 'space-based solar power'—collecting solar energy in space and transmitting it to Earth—could also become a reality. By collecting sunlight 24 hours a day without atmospheric interference, it could fundamentally solve the intermittency problem of existing renewable energy sources.
9.8 Future Scenarios
9.8.1 Optimistic Scenario
If all technologies develop as expected and social acceptance is high:
- 2030: 70% renewable energy, 50% reduction in electricity prices.
- 2040: Full carbon neutrality, energy costs nearly free.
- 2050: An era of energy abundance, new lifestyles established.
9.8.2 Realistic Scenario
If technological development and social change are slower than expected:
- 2030: 40% renewable energy, 20% reduction in electricity prices.
- 2040: 70% renewable energy, partial carbon neutrality.
- 2050: Full carbon neutrality achieved, stable energy supply.
9.8.3 Pessimistic Scenario
If there are significant technical limitations or social resistance:
- 2030: 25% renewable energy, no major changes.
- 2040: 50% renewable energy, gradual improvement.
- 2050: 70% renewable energy, delayed carbon neutrality.
10. A Decision-Making Guide for Practitioners
Moving beyond theoretical analysis, this section provides a concrete guide for practitioners who are actually considering the adoption of a smart grid. These are practical recommendations for government policymakers, utility executives, local government officials, and private sector decision-makers.
10.1 Readiness Assessment Checklist
10.1.1 Technical Readiness
📋 Technical Infrastructure Check
Essential Items to Check:
- Level of digitalization of existing power infrastructure
- Status of communication network deployment
- Readiness of data management systems
- Level of cybersecurity framework
- Technical capabilities of operational personnel
Evaluation Criteria:
| Item | Beginner | Intermediate | Advanced |
|---|---|---|---|
| Digitalization Rate | <30% | 30-70% | >70% |
| Communication Network | 2G/3G | 4G LTE | 5G |
| Data Processing | Manual | Semi-automated | AI-based |
| Security Level | Basic | Standard | Advanced |
| Personnel Skills | Legacy tech | Training completed | Expert |
10.1.2 Economic Feasibility Analysis
Key indicators for judging the economic feasibility of a smart grid investment:
- NPV (Net Present Value): Net benefit after applying a discount rate.
- IRR (Internal Rate of Return): Rate of return on investment.
- Payback Period: Time to recover the investment cost.
- B/C Ratio (Benefit-Cost Ratio): Ratio of benefits to costs.
10.2 Phased Adoption Strategy
10.2.1 Phase 1: Foundation Building (1-3 years)
Key Tasks:
- Smart Meter Deployment: >30% of all customers.
- Communication Infrastructure: Fiber optic or wireless network.
- Data Center: Big data collection and processing system.
- Talent Development: Training programs for key operational staff.
Estimated Investment: 40-50% of the total budget.
Expected Effect: 5-10% improvement in energy efficiency.
10.2.2 Phase 2: Intelligence Implementation (3-7 years)
Key Tasks:
- AI System Introduction: Demand forecasting and optimization.
- Automation Expansion: Unmanned substations and automated recovery.
- DER Integration: Integrated management of solar, ESS.
- Demand Response Programs: Customer participation services.
Estimated Investment: 30-40% of the total budget.
Expected Effect: 15-25% improvement in energy efficiency.
10.2.3 Phase 3: Full Automation (7-10 years)
Key Tasks:
- Fully Autonomous Operation: 24/7 unmanned system operation.
- Energy Trading Platform: P2P trading services.
- Predictive Maintenance: AI-based asset management.
- Integrated Ecosystem: Linkage with transport, buildings, and industry.
Estimated Investment: 10-20% of the total budget.
Expected Effect: >30% improvement in energy efficiency.
10.3 Risk Management Strategy
10.3.1 Technical Risks
Key Risks and Countermeasures:
| Risk | Probability | Impact | Countermeasure |
|---|---|---|---|
| Cyberattack | High | High | Multi-layered security, regular drills |
| System Compatibility | Medium | Medium | Standard compliance, pre-testing |
| Technology Obsolescence | Medium | Low | Modular design, upgrade plan |
| Personnel Shortage | High | Medium | Investment in training, external collaboration |
10.3.2 Economic Risks
- Investment Cost Increase: Secure a contingency budget of at least 20%.
- Technological Changes: Design a flexible architecture.
- Profitability Decline: Diversified revenue models.
- Policy Changes: Close cooperation with the government.
10.3.3 Social Risks
- Customer Resistance: Sufficient prior communication and presentation of benefits.
- Privacy Concerns: Transparent data management policies.
- Digital Divide: Inclusive service design.
- Job Displacement: Operate retraining programs.
10.4 Performance Measurement and Evaluation
10.4.1 Setting KPIs (Key Performance Indicators)
Operational Efficiency:
- Reduction rate of outage duration (SAIDI)
- Improvement in T&D loss rate
- Peak demand reduction rate
- Energy efficiency index
Customer Satisfaction:
- Customer satisfaction score (NPS)
- Effect of electricity bill savings
- Improved service accessibility
- Reduction rate of complaints
Environmental Performance:
- CO₂ emission reduction
- Renewable energy integration ratio
- Improvement in energy self-sufficiency
- Resource circulation efficiency
10.4.2 Regular Evaluation System
Evaluation Cycle:
- Monthly: Monitoring of operational indicators.
- Quarterly: Performance evaluation and adjustment.
- Annually: Strategy review and improvement.
- Every 3 years: Revision of mid- to long-term plans.
10.5 Partnership and Collaboration Strategy
10.5.1 Technology Partnerships
Key Areas for Collaboration:
- ICT Companies: Communication, software, AI technology.
- Power Equipment Manufacturers: Hardware, system integration.
- Research Institutions: Technology development, standardization.
- Consulting Firms: Strategy formulation, project management.
10.5.2 Ecosystem Building
The efforts of a single company are not enough for a successful smart grid. Building a collaborative ecosystem with various stakeholders is essential.
🤝 Ecosystem Building Strategy
Key Partners:
- Government: Policy support, regulatory reform.
- Utility Company: Infrastructure provision, operational experience.
- Tech Companies: Innovative technology, solutions.
- Financial Institutions: Investment, financial services.
- Customers: Demand, feedback.
10.6 Leveraging Global Best Practices
10.6.1 Benchmarking Targets
Leading Technology Countries:
- Denmark: Renewable integration, energy islands.
- Germany: Distributed energy, sector coupling.
- Singapore: Urban smart grids.
- California, USA: Innovative policies, market mechanisms.
10.6.2 Learning Points
Key lessons to be learned from the success stories of various countries:
"The success factor in Denmark was not technology, but 'political consensus.' The ability to maintain a consistent policy for 30 years was the most important competitive advantage." - Official from the Danish Energy Agency
10.7 Decision-Making Framework
10.7.1 Go/No-Go Decision Criteria
Must-Haves:
- Strong commitment and support from top management.
- Feasibility of securing sufficient funding.
- Confirmation of technical viability.
- Establishment of a legal and institutional framework.
Nice-to-Haves:
- Existence of government support policies.
- Good customer acceptance.
- Potential for differentiation from competitors.
- Opportunities for international cooperation.
10.7.2 Phased Decision Gates
Manage risks and optimize investments by setting clear decision points for each phase:
| Phase | Decision Criterion | Key Review Points |
|---|---|---|
| Planning | Strategic Fit | Alignment with business goals |
| Design | Technical Feasibility | Technology maturity, risk level |
| Construction | Progress Status | Schedule, budget, quality |
| Operation | Performance Achievement | KPI attainment, ROI |
10.8 Checklist for Practitioners
10.8.1 Pre-Project Checklist
- Management approval and budget secured.
- Project team formed and roles assigned.
- Technology partners selected and contracted.
- Legal review and permit procedures.
- Risk assessment and response plan.
- Stakeholder communication plan.
- Performance metrics and targets set.
- Phase-by-phase milestones defined.
10.8.2 In-Progress Monitoring Points
- Technical Progress: Development schedule, quality, test results.
- Financial Status: Budget execution rate, cost variations, profitability.
- Organizational Factors: Team capabilities, staffing, training progress.
- External Environment: Policy changes, market trends, competitive situation.
10.9 Key Success Factors
10.9.1 Organizational Level
- Leadership: Strong will and continuous support from top management.
- Talent: Securing professional talent and continuous skill development.
- Culture: An organizational culture that embraces innovation.
- Process: Systematic project management.
10.9.2 Technical Level
- Standardization: Compliance with international standards and ensuring interoperability.
- Security: A security framework considered from the design stage.
- Scalability: A flexible architecture that considers future expansion.
- Reliability: Stability equal to or greater than the existing system.
10.9.3 Market Level
- Customer-Centric: Focusing on creating customer value.
- Partnership: Ecosystem building and collaboration.
- Differentiation: A unique value proposition.
- Sustainability: A long-term strategic perspective.
10.10 FAQ for Practitioners
Q. What is the investment priority for a smart grid?
A. A phased approach is recommended: 1) Smart meters → 2) Communication infrastructure → 3) Data analytics system → 4) AI/Automation → 5) Advanced services.
Q. When can we expect an ROI?
A. Initial effects (3-5 years): 5-10% efficiency improvement. Full-scale effects (7-10 years): 20-30% efficiency improvement, allowing for investment recovery.
Q. How should existing personnel be retrained?
A. A gradual training program (6 months - 2 years) combined with the recruitment of external experts should be used to minimize skill gaps.
Q. What are the cybersecurity measures?
A. A multi-layered security framework including network segmentation, encryption, access control, and real-time monitoring is essential.
11. Conclusion
We are now at the greatest inflection point in the history of the power industry. The legacy power grid that has supported us for the past 100 years has served its role faithfully, but it is showing its limits in the face of new challenges like climate change, digital transformation, and energy democracy. In contrast, the smart grid is emerging as an innovative alternative that can solve these challenges.
11.1 Key Messages
11.1.1 A Paradigm Shift
The transition from the legacy grid to the smart grid is not a simple technological upgrade. It is a fundamental paradigm shift from 'supply-centric' to 'supply-demand balance,' from 'centralized' to 'decentralized collaboration,' and from 'passive consumption' to 'active participation'.
A Change in Philosophy
Legacy Grid: "We will supply power reliably" VS Smart Grid: "Let's create and share together"
11.1.2 The Convergence of Technology and Society
The true value of the smart grid does not lie solely in advanced technologies like AI, IoT, and big data. These technologies create innovative value only when they meet social needs. Energy welfare, environmental protection, economic efficiency, and social equity are combining with technology to create a new civilization.
11.1.3 An Irreversible Change
The transition to the smart grid is no longer a matter of choice. It is an indispensable change necessary to respond to climate change, ensure energy security, and maintain economic competitiveness. However, the speed and method of this transition may vary depending on the situation of each region and organization.
11.2 Key Findings
11.2.1 Economics: A Clear Long-Term Advantage
While the initial investment cost of the smart grid may be burdensome in the short term, it shows a clear economic advantage in the long run. When considering factors like improved energy efficiency, peak demand reduction, outage cost savings, and the creation of new revenue models, the investment can be recovered within 8-12 years.
11.2.2 Technical Maturity: Entering the Commercialization Stage
Smart grid technology has now moved beyond the laboratory and entered the commercialization stage. Numerous success stories worldwide have proven its technical feasibility, and standardization and interoperability have also greatly improved. The question is no longer 'if we can,' but 'how we will' do it.
11.2.3 Social Acceptance: The Key Success Factor
Social acceptance is as important as technical completeness. No matter how good the technology, it cannot succeed without the understanding and participation of citizens. Social challenges such as privacy protection, bridging the digital divide, and ensuring a fair distribution of benefits must be addressed together.
11.3 Recommendations for the Future
11.3.1 For Policymakers
- Consistent Policy: Maintain long-term policies that are not swayed by political changes.
- Regulatory Innovation: A flexible and adaptive regulatory framework that keeps pace with technological advancements.
- Incentive Design: Systems that encourage voluntary participation from market players.
- Social Dialogue: Facilitating communication and consensus among stakeholders.
11.3.2 For the Power Industry
- Digital Transformation: Fundamental innovation of existing business models.
- Open Collaboration: Active partnerships with tech companies and startups.
- Customer-Centricity: Shifting from a supplier's perspective to a customer value creation perspective.
- Investment in Talent: Continuous capability development for future technologies.
11.3.3 For the Tech Industry
- Participation in Standardization: Active involvement in standardization activities to ensure interoperability.
- Enhanced Security: Building a security framework that is considered from the design stage.
- User Experience: Simple and intuitive interfaces for complex technologies.
- Sustainability: Focusing on long-term ecosystem development rather than short-term profits.
11.4 Closing: Towards the Realization of Energy Democracy
The smart grid is not an end in itself. It is a means to create a better world. Our ultimate goal is to create a world where everyone can use clean and affordable energy, enjoy a prosperous life without harming the environment, and participate democratically in energy production and consumption.
To realize this vision, social innovation must go hand in hand with technological development. Institutions, culture, education, awareness, cooperation, and solidarity are all necessary. The smart grid is just the beginning of that journey.
"The smart grid is not the future of the grid, but the grid of the future society. It is the essential infrastructure for the sustainable, fair, and democratic society we dream of." - Director-General of the International Renewable Energy Agency (IRENA)
The debate of legacy grid vs. smart grid is over. The future has already chosen the smart grid. What remains is the question of how to make that future a reality. And the answer lies in all of our hands.
12. FAQ
Q1. Will the smart grid completely replace the legacy power grid?
A. No, it's more of an 'evolution' than a replacement. The realistic approach is to develop a hybrid form that utilizes the reliability and economy of scale of the existing infrastructure while adding digital technology and intelligent control. Phased modernization is the common approach rather than a complete overhaul.
Q2. Aren't the initial construction costs too high?
A. The initial CAPEX is large, but it is economical in the long run. Considering the reduction in transmission/distribution losses (1.2 trillion KRW/year), peak demand reduction (0.8 trillion KRW), and outage cost savings (0.5 trillion KRW), the investment can be recovered within 8-12 years. Innovative financing techniques like the ESCO model and green bonds can also reduce the initial burden.
Q3. What are the direct benefits for households and consumers?
A. Specific benefits include: ① 15-30% reduction in electricity bills (through time-of-use rates, demand response participation), ② Over 50% reduction in outage times, ③ Personalized energy consulting services, ④ Opportunities to generate revenue as a prosumer, ⑤ Increased energy-saving awareness through real-time usage monitoring.
Q4. Is AI absolutely necessary?
A. Yes, it is essential. To realize the core values of the smart grid—'predict-optimize-self-heal'—AI is indispensable. Analyzing millions of variables in real time and making optimal decisions is beyond human capability. A smart grid without AI is like a body without a brain.
Q5. How is personal information protected?
A. Personal data protection is a core principle of smart grid design. Principles such as ① data minimization (collecting only what's necessary), ② anonymization (processing data to prevent personal identification), ③ encrypted transmission and storage, ④ ensuring user control (right to consent/refuse collection and use), and ⑤ transparent data policy disclosure are applied.
Q6. Can small and medium-sized enterprises (SMEs) also benefit from the smart grid?
A. Absolutely. In fact, SMEs can receive greater relative benefits. ① Improved efficiency without dedicated personnel through energy management automation, ② 20-40% reduction in electricity costs by participating in demand response programs, ③ Government support policies (Green New Deal, energy efficiency improvement funds), ④ Easing of initial investment burden through collaboration with energy service companies.
Q7. Is it possible in rural or island areas?
A. It can actually be more advantageous. ① Abundant space for distributed energy resources (solar, wind), ② Possibility of energy self-sufficiency through microgrid construction, ③ Government support policies for rural energy independence, ④ Easier to smarten due to a relatively simpler grid structure compared to cities. In fact, successful cases are emerging in places like Jeju Island and Gapa Island.
Q8. What happens to the jobs of existing utility company employees?
A. Jobs don't disappear; they change. ① Some reduction due to automation of existing tasks, ② A sharp increase in jobs in new technology fields (data analysis, AI operations, cybersecurity, etc.), ③ Support for job transition through retraining programs, ④ Overall increase in high-value jobs. The key is to prepare and adapt in advance.
Q9. Isn't it more vulnerable to cyberattacks?
A. The attack surface widens, but defensive capabilities are also strengthened. ① Legacy grid: Closed, but a single breach can paralyze the whole system. ② Smart grid: More connection points, but its decentralized structure allows for partial isolation. ③ AI-based real-time threat detection, ④ Multi-layered security (network-application-data-physical). Overall, it becomes more secure.
Q10. When can we experience a full smart grid?
A. It varies by region and phase. ① Basic services (smart meters, real-time rates): 2025-2027, ② Intelligent services (AI optimization, automated control): 2028-2032, ③ Full automation (unmanned operation, P2P trading): 2035-2040. However, partial benefits can be experienced even now and will continue to improve.
Q11. Is a smart grid meaningful without renewable energy?
A. Yes, it is. Even without renewables, there are benefits such as ① 15-20% improvement in energy efficiency, ② significant reduction in outage times, ③ savings on power plant construction costs through demand optimization, ④ improved service quality through real-time monitoring. However, it unleashes its true transformative value when combined with renewable energy.
Q12. Can I benefit from the smart grid without an electric vehicle?
A. Of course. An EV is just one component of the smart grid. There are various other benefits, such as ① automatic optimization through smart appliances, ② utilization of home energy storage systems (ESS), ③ electricity bill savings with time-of-use rates, and ④ selling surplus power if you have rooftop solar installed.
