The Internet of Things: Key Applications and Protocols

15

The Smart Grid

15.1 Introduction

The smart grid will be one of the most important applications of the Internet of Things.

A major paradigm change is happening in electricity markets, driven by the convergence of several factors:

• The challenges posed by the accelerated introduction of renewable-energy sources in the overall electricity production, which brings an increasing degree of randomness to the traditionally deterministic supply side.
• The ubiquitous penetration of the Internet in homes and businesses, and the increased confidence in next-generation smart distributed networks for mission-critical applications (after years of experience of the successful migration of telephony networks to VoIP).
• The gradual opening of electricity markets, with new regulation opening production facilities and distribution networks to all actors, greater fluidity in electricity trade markets, and fast maturing of the regulatory framework for active utility operators, such as those implementing demand response.
• The increasing volatility of electricity prices, resulting from the underlying volatility of oil and natural gas, but also increasingly from the propagation of external shocks, such as exceptional climatic events, through energy exchanges.

The current credo of electricity operators “demand is unpredictable, and our expertise is to adapt production to demand”, is about to be reversed into “production is unpredictable, and our expertise is to adapt demand to production”.

As the rules ...