Chapter 5. Transforming the Energy Sector

Data analysis is transforming the energy sector in enormously influential ways. We discuss some of these in this section.

Smart Grid

The energy sector has been undergoing a transformation for some time now into what is commonly referred to as the smart grid. The smart grid is a modernization of the electrical grid from a monolithic system characterized by the one-way flow of both power and information to a more distributed system in which electricity is produced and consumed throughout the grid, including all the way out at the very edges, and information about power production and consumption flows in both directions.

Electricity is unusual in that there is no real “inventory” of stored electricity that consumers draw upon, with the producers then refilling the inventory supply. Instead, the amount of electricity consumed must match the amount produced. Blackouts and brownouts occur when the demand exceeds the grid’s ability to supply the amount of power needed at that time.

Thus, data about the demand for power and the supply of power is incredibly useful in making the electrical grid more efficient. One of the first steps in the evolution of the smart grid was intelligent metering whereby the amount of power being consumed at each endpoint is automatically gathered in real time or near real time and transmitted back to the producer. Previously, meters were manually read on a very infrequent basis (e.g., monthly) and provided almost ...

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