The Power Grid Needs to Get Smarter. a $280 Million Project Shows How.

• The power grid is too old and simple for the growth of extreme weather, EVs, and renewable energy.
• Chattanooga’s utility built a $280 million smart grid, creating $2.7 billion in economic value.
• This article is part of “Transforming Business: Infrastructure,” a series exploring the advancements reshaping US infrastructure.

It pays to be smart and Chattanooga, Tennessee, has put a whole new meaning to the phrase. The city is home to one of the nation’s most advanced power grids.

The local utility, called EPB of Chattanooga, spent $280 million to refurbish its power system with smart technologies to make a “smart grid.”

In its first 10 years, the project generated $2.7 billion worth of economic value, according to an EPB-funded study. That’s not a bad return on investment.

The US grid needs its own internet

Smart grids like this offer a cleaner, safer, and more efficient future with lower electric bills and fewer blackouts — which is great because the way our energy system has operated for the past century isn’t going to cut it for the next one.

In most places, energy starts with a giant coal-fired power plant. From there, transmission lines zip the electricity to a substation, which lowers the voltage and pumps it into distribution lines to homes and businesses.

Electricity flows one way, from the power plant to your home, and it doesn’t do much else. It’s simple — and that was fine for a long time. But it’s becoming a problem as the climate crisis complicates our energy supply.

Increasingly extreme weather events are battering our electrical infrastructure and causing outages that cost American businesses an estimated $150 billion a year, according to the US Department of Energy.

Meanwhile, climate solutions put their own pressure on the grid. Wind farms and solar panels feed energy into the system inconsistently, making it harder to pace supply with the day-to-day fluxes of electricity use.

Renewables also complicate things by sheer numbers — rather than from 12,000 power plants, in just a few decades, the US could be drawing its power from 1 million dispersed sources, from hydropower dams to rooftop solar panels.

At the same time, electrification, including the rise of electric vehicles, is increasing demand.

To cope, experts say, the grid needs its own internet, stat. They’re calling for a digitized “smart grid.”

“It’s imperative,” Kevin Schneider, the chief engineer studying power systems at the Pacific Northwest National Laboratory, told Business Insider.

Without smart technologies, the grid will be inefficient, leading to economic losses and slowing the transition to clean energy. An outdated grid could also fall victim to more and more blackouts.

“If people are really asleep at the wheel, and we keep pushing further, eventually you can get to the hyperbole of a third-world power system,” Schneider said.

The American Society of Civil Engineers gave US energy infrastructure a C-minus grade in 2021, citing poor reliability and increasing threats from severe weather.

But a Chattanooga-like transformation nationwide could save us all money, reduce carbon emissions, and prevent blackouts.

What is a smart grid?

A key job of any power grid is to balance electricity supply and demand. Too much power could damage the system. Not enough could leave some people in the dark.

A smart grid automates this balancing act using a system of meters, sensors, controllers, and computers.

Smart grids can also help businesses, factory operators, or homeowners make better-informed decisions about when and how to use energy, whether they want to save money, reduce emissions, or both.

“It can send information along with electricity,” Joshua Rhodes, a research scientist studying smart grids at the University of Texas at Austin, told BI.

For example, “it can control a fleet of air conditioners and maybe can turn them off for 15 minutes at a time” to optimize energy costs, he said.

How Chattanooga made its grid smart

EPB of Chattanooga first needed a system to communicate with all the smart devices it would install. It couldn’t make significant upgrades to its system without it.

“Everything that you looked to do, the limitation was communications,” David Wade, the CEO of EPB of Chattanooga, told BI.

Fiber optics would do the trick — and allow EPB to start offering TV, internet, and phone services.

With the prospect of revenue and a mission as a public utility to improve quality of life, the EPB board of directors approved a plan in 2008.

With $169 million from a municipal bond issue for the project, workers started digging trenches and climbing poles to lay new fiber optic cables across Hamilton County.