A Smart Grid is an electricity network that knows precisely – in real-time – how much electricity is needed, where it’s needed, along with how much supply there is, and from where the supply is sourced. This should be an Economics professor’s greatest fantasy – real-time perfect information, omniscient market participants, perfect competition, and finally where supply and demand determine prices.
Economists should rejoice because it’s probably not going to be fantasy much longer. In a few years, a Smart Grid might become a necessity as opposed to cool new experiment conducted by hippies. And that’s because of impending changes in technology from both the supply side of electricity and the demand side. On both sides, the disruption is a potent combination: Renewable Energy + Storage.