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Smart grids use communication technologies (shown as red lines in the low wind and high demand scenarios) to tie together the transmission network (blue lines), power sources, and control systems. This reduces the need for additional power plants, allows renewable energy to replace fossil-fuel power plants, and makes the grid more resistant to blackouts and brownouts.

New substations that will react to commands or problems within a fraction of a second will make it possible to change from a traditional system, where electricity flows in one direction only, to one in which electricity can flow in multiple directions. Through smart meters in homes and businesses (here connected wirelessly to the substation’s communication system), utilities will be able to alert customers when the spot price of electricity rises because of peaking demand. That will give them an incentive to reduce their electricity use, thereby lessening the load on the grid. Smart appliances such as air conditioners and refrigerators will be able to take these prices into account, shifting into low-power modes as needed.

Drivers of plug-in hybrids and all-­electric vehicles, meanwhile, will be able to automatically adjust battery charging to use the cheapest electricity available. Ultimately, the batteries in these vehicles will act as a backup power supply: when the capacity of power plants becomes strained, car owners will be able to sell some of the electricity stored in the battery back to the utility. Similarly, home­owners will be able to sell surplus power generated by residential wind or solar-panel installations.


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