Not many people know that our electric grids were designed more than a century ago, and not much has changed since then. Actually, if Thomas Edison was still alive he would still be able to recognize them. Our grids were made for a time when electricity needs where simple and energy demand was low. It has (yet) not incorporated the technologies of the digital communications revolution. The system operates in a mechanical and inefficient way: large-scale utilities, far away from consumer centers, “push” the energy to consumer in a top-down fashion. Consumers do not have much say in the process. Energy only travels in one direction and information is not shared. The result is a lot of waste generation. If the human race is to overcome the threats of climate change, the system needs to be redesigned.
This redesign is called the smart grid. It is the fusion of energy and digital communications. The basic idea behind it is that it allows for electricity and information to flow in a two-way street between utilities and consumers. In fact, consumers become ‘prosumers’: they are able to sell electricity generated at their homes back to the to the grid. In this system, renewables play a central role, and if renewable energy is to be harnessed in an optimal fashion, grids now need to be smart.
Due to renewables distributed nature (the sun and the wind are not concentrated in specific parts of the globe) this new system will be laterally-scaled and not top-down. When the sun is not shinning in the northeast of Brazil, wind turbines can be activated in the south and vice-versa. But weather conditions are hard to predict, and this is why real-time information about the conditions of the grid is necessary. This is where sensors come in. In the smart grid sensors are ubiquitous, all over households, industries, shopping malls and transmission lines. All of them collecting data on energy usage that can be accessed in real time. Information will flow, just like in the internet, between all actors connected to the grid.
The energy internet will revolutionize electricity management. No longer will it be necessary for a utility worker to come to your house and write down the amount of electricity that you consumed last month in order to charge you for it: this will be done remotely, according to the information collected by sensors and organized in smart meters. The smart meter is one of the components of a larger network called the Home Area Network, or HAM. A HAM is made of a collection of smart appliances, like televisions, refrigerators and washing machines that are digitally connected to an Energy Management System (EMS). The EMS can be accessed by virtually every communication device, such as your cellphone, laptop and even your TV. For example, because of the trend towards dynamic pricing of electricity (depending on the time of day and on the current demand for it), consumers will be able to schedule their appliances to operate at a time when demand for electricity is low, as is the price. The energy that they saved can then be sold back during peak time, when demand and prices are high. This will level out electricity demand during the day, reducing the risk of blackouts. And before you claim this is science fiction, we can assure you it is not: this is already happening in countries like Germany and Denmark.
Economist Jeremy Rifkin believes that the monopoly of energy generation will disappear in the future and power will transfer from big utilities to small prosumers. In other words, energy will democratize. It will be peer-to-peer, just like the internet. A big web of people buying and selling energy. Utilities will not disappear but will have their role reshaped. Their main job will be to manage data coming from the sensors and work together with prosumers to reduce energy costs – today utilities do not have incentives to save energy since their income comes from megawatts generated. This will be a great stride to energy efficiency, our invisible energy resource.
In Brazil, however, the energy internet is a long-term reality, at best. Smart grid has been a topic of study in the Brazilian academia for years, but discussions regarding its implementation started recently. In 2010 the federal government organized a working group to analyze the topic and the challenges to its implementation in Brazil. In 2012, ANEEL enacted a resolution on general conditions to micro and mini-generation projects to have access to distribution and compensation systems. There are several smart grid pilot projects in development  but few results yet.
Several are the barriers to the energy internet in Brazil. First, technical. The smart grid is in its infancy in the country, and integrating the electric system with telecommunications requires even more effort. Issues regarding the relationship between electric providers and network providers, which protocols would be employed to guarantee the access to the system and how privacy of consumer information would be regulated are very important, as well as measures of cyber security. Second, regulatory. The energy internet requires dynamic pricing of tariffs, differentiating peak and off-peak prices; it also requires taxes to be calculated considering net (production deducted from consumption) performance of consumers. Currently, industrial and residential tariffs are differentiated as well as the price of electricity considering its major source – when thermal power plants are in full operation, the “red flag” is raised and power becomes more expensive. This is far from dynamic pricing, though. And although ‘prosumers’ are exempted from paying some taxes in distributed generation , taxation on net performance requires further regulatory updating.
Last, but not least, it is a challenge to mindset. Generated distribution can provide serious amounts of electricity and reduce dependency on large power projects, both in generation and transmission. In planning, however, it is still marginal. Micro and mini-generation appeared for the first time in Plano Decenal de Expansão (PDE), piece that guides electric policymaking in a 10-year horizon, in 2013 (PDE 2022), but only in 2015 (PDE 2024) it was estimated that they can contribute to load reduction – 100 TWh in 2024, 12.64% of total demand predicted for the same year (EPE, 2015:382).
The energy internet is updating the way we think about electricity. People are required to step outside their passive consumer identity and participate in energy planning and provision. Governments are required to mitigate their commanding profile and act as coordinators of numerous and heterogeneous demands and actions. This is a revolution, and in tandem with other ongoing changes that are redesigning contemporary life. It seems that the 21st Century is about identifying connections and engaging diversity as well as balancing short and long-term interests, for the common good.
 A list of projects can be found at <http://redesinteligentesbrasil.org.br/projetos-piloto-brasil.html>
 Law 13169/2015 exempted the ‘prosumers’ from paying PIS/PASEP and COFINS. ICMS, however, is a state tax. There is a federal resolution authorizing the exemption, but charges depend on each state.
ANEEL – Agência Nacional de Energia Elétrica (2012): Resolução Normativa n. 482. Available at <http://www.aneel.gov.br/cedoc/ren2012482.pdf>, access 20 Feb 2016.
EPE – Empresa de Pesquisa Energética (2015): Plano Decenal de Expansão 2024. Available at <http://www.epe.gov.br/PDEE/Relatório%20Final%20do%20PDE%202024.pdf>, access 20 Feb 2016.
MME – Ministério de Minas e Energia (2010): Relatório do grupo de trabalho sobre redes elétricas inteligentes, Portaria 440/2010. Available at <http://www.mme.gov.br/documents/10584/1256641/Relatxrio_GT_Smart_Grid_Portaria_440-2010.pdf/3661c46c-5f86-4274-b8d7-72d72e7e1157>, access 20 Feb 2016.
Rifkin, Jeremy (2011): The Third Industrial Revolution. New York: Palgrave Macmillan.
U.S. Department of Energy (2015): The Smart Grid: An Introduction. Available at: <http://energy.gov/sites/prod/files/oeprod/DocumentsandMedia/DOE_SG_Book_Single_Pages%281%29.pdf>, access 24 Feb 2016.
TUBALL, Maria Lorena; ABUNDO, Michael Lochinvar (2016): ‘A review of the development of Smart Grid technologies’. Renewable and Sustainable Energy Reviews, v. 59.
Larissa Basso is a PhD Candidate at the Institute of International Relations of University of Brasília and member of the International System at the Anthropocene and Climate Change Research Network (firstname.lastname@example.org)
Luciano Guivant Viola is an Engineer and Master in Energy Systems Planning Student at University of Campinas (email@example.com)