Whether it is the price of oil, deteriorating environmental conditions, or the household electric bill, energy is affecting all of us more acutely these days. Demand for energy is rising worldwide, and that demand can no longer be met by simply building more power plants. With transmission and distribution systems overburdened and global warming threatening the environment, both utilities and consumers will have to pay closer attention to where, when, and how energy is generated and used.

Though acclaimed by the National Academy of Engineering as "the most significant engineering achievement of the 20th century," the electric power grid is outdated; it's a mechanically monitored, centrally managed system that has yet to take advantage of Internet-based information technology. If it did, and if it could integrate innovations such as solar panels, wind turbines, advanced batteries, and plug-in hybrid electric vehicles, the grid could be transformed into an intelligent, self-optimizing network. This "smart grid," which would deliver clean and efficient power, would be as consequential to the power industry as the Internet has been to the economy at large.