What is the smart grid? Here's everything you need to know

On August 14, 2003, a power line in Ohio overheated, causing a widespread blackout that affected over 50 million people in the United States and Canada.

Grid operators at power plants are trained to keep a close eye on voltage readings to maintain a balance between supply and demand, but unexpected fluctuations, either due to bad weather, equipment failure or human error (as was the likely case with the 2003 blackout, according to a New York Times report), can create serious problems.

And, outdated sections of our current electrical grid aren't helping things.

The original electrical grid

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Above is our existing energy infrastructure -- a series of power lines, power plants and more that work together to ensure that your lights, appliances and electronic devices turn on when you want them to. There are some issues with this system, though.

For starters, it's old. Over 300,000 miles of transmission lines have been installed across the United States alone since the late 1800s, says the US Department of Energy. Naturally, some areas are in need of an overhaul. And there's a lot of ground to cover. Literally.

As a point of reference, the Earth's circumference is roughly 25,000 miles at the equator. That means that you could circle the Earth about a dozen times with just the US's portion of power lines in tow.

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Not only that, but our demand for electricity has changed drastically over the years. And, many of the grid operators monitoring and controlling the flow of power are using old software that limits their ability to anticipate potential problems and work to solve them before they escalate.

Since the existing grid no longer cuts it -- by 21st century digital-everything standards, at least -- the US government decided it was time for a makeover.

The smart grid

Enter: the "smart grid." This blanket term is often used to describe proposed upgrades for the US and international power grids; a quick online search will return dozens of related results. But, similar to the "smart home," the smart grid isn't all that easy to define.

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The 2007 Energy Independence and Security Act (EISA) and the 2009 American Recovery and Reinvestment Act (Recovery Act) were two early five-year smart grid projects implemented at the federal level -- and they contributed billions toward the revitalization of the power grid.

As part of the Recovery Act, the Smart Grid Investment Grant (SGIG) stipulated that over 200,000 smart transformers, 850 sensors and 700 automated substations be added to the existing grid.

While you probably can't see most of these changes, the new transformers are designed to alert power company employees before a transformer failure. The sensors, or "Phasor Measurement Units," help grid operators more easily identify and isolate problem areas before they become widespread and the substations are supposed to make it easier for power companies to quickly respond to a power outage.

The SGIG also set aside funds to replace 40 million traditional electric meters with digital models in homes and businesses across the country, often referred to as "smart meters." A 2014 Department of Energy report details the progress of these projects, including a projection that closer to 65 million smart meters will be installed by 2015.

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Digital smart meters are key to these reforms, because they are easier to read and report more information, such as how much it would cost to run an appliance at a specific time of day. This also makes it much simpler for consumers to distinguish between on-and off-peak hours and better understand where their money is going every month. But, it goes way beyond that.

Because the electric grid (sections of it, at least) is equipped with sensors and other "smart" tech, the new infrastructure is supposed to be much better at two-way communication. For instance, folks with solar panels would be able to see exactly how much power they are sending back to the grid toward the goal of a net-zero home (these are homes that generate more power than needed and are able to sell the energy back to their local power supplier).

It also has huge implications for smart home devices, like Wi-Fi thermostats, app-enabled washing machines with eco-features and even electric vehicles, as the smart grid is a logical extension of these energy-minded products.

Where we are today

The thing is, there are a lot of places that haven't been touched by these update (yet). Kentucky for instance, where the CNET Appliances office and the CNET Smart Home are located, has been virtually untouched by these innovations (save one relatively small-scale project that added roughly 69,000 smart meters in the southern part of the state).

Just check out the chart below to see how today's grid compare's to the Department of Energy's smart grid goal:

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For those of us who don't have smart meters, though, there are still ways to monitor energy with relative ease. We reviewed a product called Neurio earlier this year that connects to a main circuit breaker panel. Related web and mobile apps then report on real-time fluctuations in energy usage in watts (W). Similar whole-home energy monitoring products from Belkin and startup Ecoisme are in the works as well.

Even though the "smart grid" is very much a work in progress in Kentucky (and elsewhere), we are still committed to testing out smart energy tech at the CNET Smart Home. We've already added a Neurio device to track our electricity usage and have plans for a whole lot more, so stay tuned.