The electric grid comprises a large number of complex and diversified assets, interconnected from generation, through transmission and distribution infrastructure,
all the way down to residential, commercial and industrial electricity customers.
Maintaining the integrity of the electric grid (low rate of failure) and a real-time operational balance between generated power and diversified electricity consumption is critical for the prevention of wide-spread power blackouts and brownouts. Unlike for other industries,
such as telecommunication, the electric grid infrastructure has not changed substantially with respect to what it was at the beginning of its creation, nearly one century ago.
Centralized and high CO2 emission generation plants, transmission and distribution network where the energy flows primarily in one direction, and reactive customers with limited information about electricity consumption continue to characterize electric grids as they stand today. In large, the grid infrastructure is composed of many electromechanical devices with one-way or limited two-way communication flow, based mainly on analogue signals rather than on digital information. Many existing operational and maintenance practices still relay on manual or semi-manual performance impacting overall
grid reliability and security.
In recent years, there has been a rapidly growing interest in what is called smart grid
or grid of the future. The main drivers behind this industry trend and new business environment are industry de-regulation, increased customer choice, improved grid performance, environmental concerns, productivity improvement and stakeholders‘ attention. The main vision behind this industry trend is the use of advanced/new technologies, applications and solutions to improve the performance (e.g. efficiency
and equipment utilization, power quality and reliability, etcetera) of electric utility systems to address the needs of the 21st century.
Without a substantial evolution of electric grids towards the smart grid concept, we
will not be able to support the measures required to reach our carbon reduction goals.
The development of smart grid is a key enabler for CO2 reduction.
The evolution of the electric grid through the use of smart grid will require significant technological changes in all areas of the existing grid and customer interaction:

GENERATION
► Increased penetration of decentralized and low-carbon emission generation sources

TRANSMISSION AND DISTRIBUTION
► Reinforcement of the existing transmission grid across the integrated power system: creating a super grid, strong grid or superhighway grid concept
► Reinforcement of the distribution grid to enable integration of distributed energy resources and electric vehicles
► Increased deployment of advanced power equipment, monitoring devices (sensors), digital communications, and embedded digital processing to make the power grid: observable (able to measure the state of critical grid elements), controllable (able to
affect the state of any critical grid element), automated (able to adapt and selfheal),
and user-friendly (bi-directional utility-customer interaction)
► Improved asset utilization
► Implementation of a proactive grid and customer management capabilities

CUSTOMER
► Bi-directional information exchange
► Demand response

The term smart grid can have different meanings and definitions depending on the specific country, region or stakeholder involved in an initiative. Therefore, there is no “one-size fits all” smart grid solution that is appropriate to all electricity markets, or all electric grids.
Each electric grid will require a different level of technological development to effectively deliver smart grid capabilities.
In many countries and regions the smart grid capabilities necessary to deliver required benefits is limited by many business, market and technology barriers.
Market barriers include: unclear policy on market structure and rules, revenue uncertainty, complexity in prioritising technology investments, and business case fragmentation. Technology related barriers include: complexities of technology, unproven performance
of new technologies, limited cross-country R&D and learning efforts, lack of new and
well-defined smart grid standards, limited crossprofession interaction, difficulties in verifying guaranteed interoperability and scalability of the technology/solution, insufficient critical skills and knowledge across the various sectors, and cyber security vulnerability.

THE ROLE OF MAJOR ECNOMIES FORUM
ON ENERGY AND CLIMATE (MEF) IN SMART GRID INITIATIVE
MEF leaders should play an active role in helping overcome the barriers faced
in accelerating the deployment of smart grid. MEF countries can play a key role in establishing global partnership and collaboration opportunities.
We would not envision MEF initiatives as a replacement of the existing, beneficial work being done (e.g. by the European Union), but rather as a way to promote horizontal
cross-country/cross-regional partnerships between various international and country specific technical, business and financial institutions to enable knowledge transfer
and accelerate smart grid deployment.