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Electricity delivery was simpler 50 years ago than it is today: centralized power stations generated electricity, transmission and distribution networks delivered it to homes and businesses, and the consumer accessed it at the plug. Lights came on when you flipped the switch. Demand peaked at fairly predictable times, like during the evening when workers came home and cooked dinner, adjusted the temperature, watched television and did laundry.

Today, electricity grids are more dynamic. Power plants — including solar, wind, and geothermal — can be located at a wide range of locations across the network. Utilities can adjust how much electricity is generated at a given time. They can also reduce demand by remotely turning off or reducing sources of load, including consumers’ heating, ventilation, and air conditioning (HVAC) or refrigeration systems. Lastly, consumers and businesses are using software and devices to manage electricity usage themselves, including smart thermostats that learn what temperature you prefer and adjust settings throughout the day to minimize energy consumption. Consumers can also be producers of energy (e.g. solar) and their consumption patterns can be difficult to predict based on the power they can generate.

Cities, regions and countries are creating electricity networks that use digital communications technology to detect and react to local changes in usage (“smart grids”).  Digitalization of electric grids is supporting new ways to source and use energy more sustainably while also enhancing cybersecurity.

Why are smart grids necessary?

Electricity is a perishable commodity, because it must generally be used at the instant it is generated. Moreover, the pathways to deliver it must be built and maintained, and there are limits on how much electricity they can transmit.

Think of our electricity system as a series of water pipes:

  • If you try to send too much water through the pipes at a pressure that is too high, you can have floods — or in the case of electricity, delivery interruptions from overloading power lines and related equipment.
  • If you send too little water through, you can have shortages or even drought — or in the case of electricity, the risk of brownouts or even blackouts from inadequate voltage.

When power was primarily generated from centralized power plants, that flow was predictable and easier to manage. Newer types of power generation – especially renewable resources like solar and wind farms – are being installed from rooftops to parking garages to mountaintops to cornfields. As a result, the number of power-generating assets has grown significantly, and so has the amount of data that grid operators and utilities have to monitor and take into account.

Newer resources like batteries for energy storage and demand response are providing unparalleled new ability to control how power is supplied and load is managed. Regarding smart grids, enhanced data gathering is required to support that level of sophistication and speed.

Two-way communications via the Internet of Things

Building smart grids starts with adding capabilities to capture more granular data — building out the Internet of Things (IoT). IoT refers to devices with sensors, processing ability, software and other technologies, which connect and exchange data with other devices and systems over the Internet or other communications networks.

For our electricity system, this means utilizing “smart meters” that can measure electricity usage much more often. Smart meters can provide your utility with real-time data on electricity use, reducing the need for estimated bills, a change that can save money for consumers. This data can also help utilities improve performance and quality of service in its service area.

IoT capabilities are also built into rooftop solar and home battery systems, enabling consumers’ equipment to share data with the utility.  In some cases, IoT can also enable utilities to send signals in case of extreme weather or disruptions, like a power plant going offline. Similarly, if opted-in, some connected devices can receive signals from your electric utility to adjust settings or turn off for a period of time to help reduce demand on the grid.

IoT-enabled building controls are another part of the electricity digitalization puzzle. They can help property managers monitor systems and devices, manage energy use, track occupancy levels to protect occupants’ health and safety, and troubleshoot issues.

Bringing together data from these disparate IoT resources is requiring more computing power — to compile it, to analyze it and to report on what’s happening so that grid operators and utilities can act on it.

Two-way power through energy storage and electric vehicles

Digitalization is also happening through the adoption of electric vehicles and larger-scale batteries — from residential systems to projects the size of multiple football fields.

First, electric vehicles represent a new category of load, drawing more electricity from our grids when they charge. Because people can charge their cars at any time, this adds a new layer of less predictable demand to the system. Conversely, some electric vehicles and chargers are capable of bidirectional charging. This means that if consumers’ vehicles are opted-in to utility programs, their batteries could support electric grids at times of high demand or other stress, then resume charging when those conditions end.

Large-scale batteries and other types of energy storage are also being deployed in homes, businesses and at grid-scale. Energy storage enables the grid to capture and dispatch energy, which adds flexibility and resilience to electric grids. This is especially important when excess power is generated by solar during the day or by wind at night, so that energy generated isn’t wasted.

Having more flexible grids that receive granular data on both electricity supply and demand from smart meters can enable operators to accommodate a wider range of resources with different behaviors. On grids powered by a growing percentage of intermittent renewables, granular data can provide utilities with transparency to support customers’ needs and reliable power throughout the day.

Electric grids & cybersecurity

Digitalization of electric grids has a third key leg — enhancing cybersecurity through smart controls that can be accessed faster and remotely.

Cybersecurity is part of the United Nations’ Sustainable Development Goal 16, which focuses on peace, justice and strong institutions and includes upholding the right to privacy.

As IoT devices and smart meters are adopted, they are being manufactured and maintained to high cybersecurity standards. More important, this helps to protect grids from bad actors who might seek to disable them altogether. Enhanced cybersecurity can also help protect the privacy of electricity customers and keep both customer records and usage data safe.

How Cisco is advancing digitalization of electricity

Our technology can be used to help the world prepare for the outcomes of a changing climate—such as to monitor grid reliability, enable grid decarbonization, monitor transportation and water systems, and support the workplace of the future.

For example, Cisco has partnered with Italy’s largest electricity provider, Enel, to introduce innovative solutions for agile grid operation, regulation, and supervision. Using Cisco technology, Enel can monitor its energy grid and preemptively address any faults or failures that threaten the network. Cisco is also helping Enel connect its grid to renewable energy sources like solar and wind energy at scale, speeding the transition to a low-carbon electricity grid.

In addition, Cisco Meraki sensors, IoT devices that track a range of energy and environmental data, are helping creative agency WPP to reduce energy consumption from heating and cooling in its data center campuses.  WPP reports a 44 percent cut in cooling energy and a 27 percent drop in total energy consumption for its data center in Sea Containers House, London, thanks in part to closer monitoring. WPP intends to replicate this monitoring, and the associated savings, worldwide.

Learn more about how Cisco is supporting the digitalization of energy and the creation of smart grids and buildings in Cisco’s environmental, social, and governance (ESG) Reporting Hub.


Angelo Fienga


Sustainable Solutions, EMEA