Technical Article

Understanding the Relationship Between the IoT and Smart Grids

September 17, 2021 by Anushree Ramanath

This article explains the integration needed to connect smart grids with the internet of things.

In simple terms, The Internet of Things (IoT) is a huge network of connected things. Semantically, it means a worldwide network of interconnected objects that are uniquely addressable based on the Transmission Control Protocol (TCP) and Internet Protocol (IP). This leads to the reasonable definition of IoT as things having identities and virtual personalities operating in smart spaces using intelligent interfaces to connect and communicate with social, environmental, and user contexts. Read on to learn more about integrating IoT with the smart grid and the IoT architectures in the smart grid.

The IoT can also be defined as a connection of people and things at any time in any place with anything and anyone using any path and any service [1]. This is also illustrated in Figure 1. In recent years, several technologies have converged, leading to tremendous evolution in capability.

Traditional technologies like embedded systems, controls and automation, wireless sensor networks, and others contribute towards enabling the IoT. In layman terms, IoT technology can be considered to be synonymous with products that pertain to “smart” devices, be it a smart home with appliances such as home security systems, controlled lighting fixtures, automated thermostats, and others that are closely associated with such an ecosystem like smartphones, smart speakers and so on.


Figure 1. Internet of Things (IoT) with its connections and related entities


In a typical electric grid, electricity cannot be stored, and thus, whatever amount of power is required at a given instance, it must be generated and transported right away to the end-users [2]. That translates to the fact that the traditional grid must generate at peak load capacity consistently even though peak load may be necessary only for a few hours in a day. Also, typically the grid must have some excess generating capacity above the anticipated peak to cater to any increased demand.

This is crucial because otherwise, there might be power failure events, and the system will be unable to respond to the additional demand reliably. There is an option of catering to the peak demand in one area by transporting power from a lower demand area to a high demand area, but it is a potentially dangerous way of handling the situation and leads to transmission loss due to resistance in the wires. Therefore, to protect, control and optimize the energy consumption to meet all the customer needs, there is a need for innovative technology that upgrades the traditional power system.


Many aspects of our world are or can be powered and controlled by the smart grid.


Industrial management systems can be integrated with smart grids to enable energy optimization. A smart grid can also be defined as a utility-side IoT application that encompasses systems that gather, act on energy and power-related information. The goal is to improve the efficiency of production and distribution of electricity. There are a significant number of energy-consuming devices that have the capability of connecting to the internet. This helps communicate with the utilities to balance the power generation and optimize the energy consumption.

These smart devices enable remote control and interaction by several user types and facilitate central management using a cloud-based interface [3]. It enables functions like scheduling where remote powering on or off of appliances is realizable. This includes heating systems, controlled lighting, controlling appliances like ovens, sound, and security systems. Also, the usage of advanced metering infrastructure-based internet-connected devices helps collect data from end-users while managing distribution automation devices.


Integration of IoT and Smart Grid

The IoT can support technologies in the smart grid. Combining IoT and smart grid helps in promoting the development of smart meters, devices, and sensors. It also enables the integration of communication devices, smart terminals, and information equipment. IoT can accomplish reliable data transmission in different communication infrastructures, including wired and wireless types, at different stages of the smart grid-like generation, transmission, distribution, and utilization. This also enhances the comprehensive sensing and processing abilities of IoT so that the processing ability, reliability, and disaster recovery aspects of the smart grid can be improved.

In electricity generation, IoT can monitor electricity generation in different power plants like coal-based, hydro, wind, or solar. It also enables the prediction of necessary power to supply to the consumers while maintaining the energy storage and consumption levels [1]. IoT facilitates the acquisition of electricity consumption, dispatch, monitoring, and data protection along with managing the control equipment. On the distribution end, IoT helps in consumer side smart meters and enables the functioning of smart devices. This also enables monitoring and responding to intelligent power consumption, supporting the interoperability between different networks, managing energy efficiency, and power demand while charging and discharging battery-operated electronics. 

Key references:

1. Alireza, Internet of Things in Smart Grid: Architecture, Applications, Services, Key Technologies, and Challenges, 2019.

2. Dombrovskyi et. al., Internet of Things for Smart Energy Grid, 2019.

3. Ersue et. al., Management of Networks with Constrained Devices: Use Cases, 2014.