The Evolving Grid Edge: But where is the Edge, Really?

Innovation often begins at the edge, challenging the status quo and setting off transformational changes that ripple inward, eventually transforming the core. Consider the internet: a prime example where transformative changes began not in the core infrastructure of routers and switches but at the edges—in the hands of users—with the creation and proliferation of applications like email, web browsers, and, later, Wi-Fi and smartphones.

In its early days, the internet's edge was concentrated in universities and research institutions—places with the technical expertise to navigate this new medium. Access was limited, and interactions were primarily academic or technical. However, this changed as innovation pushed the internet beyond these specialized environments further out into homes, businesses, and integrated into everyday life.

The real breakthroughs came as the internet integrated into everyday life. Email revolutionized communication, offering a new application that made the internet more than just a collection of servers and data. The advent of web browsers brought rich content into users' homes, while Wi-Fi enabled seamless, wireless connectivity. These continued edge innovations turned the internet into a platform for user engagement, transforming it from a technical network into a dynamic ecosystem.

As users began to interact with the internet in more sophisticated ways, it evolved into a two-way system. People started uploading content—whether through email, personal blogs, social media platforms, or video-sharing sites—transforming themselves from passive consumers into active participants. This shift made the internet bi-directional, where data no longer just flowed from centralized servers to users but also from users back into the system.

The surge of innovation and usage at the edge eventually pushed the core to evolve. As more users began sharing content and interacting with applications, the demands placed on core internet infrastructure—like routers, data centers, and network protocols—grew significantly. The core had to become faster, more efficient, and scalable to support the unprecedented levels of data traffic and connectivity that edge innovations brought about. This feedback loop between the edge and core spurred improvements like faster internet speeds, more efficient data routing, and advancements in cloud computing, enabling the entire internet ecosystem to grow and thrive.

Beyond individual users, the next wave of internet transformation emerged from system-to-system communications. APIs enabled different computer systems to interact and share data seamlessly, laying the groundwork for complex integrations that powered everything from e-commerce platforms to enterprise software. This phase of interconnected systems created a deeper layer of functionality, turning the internet into an ecosystem where systems could work together and amplify each other's capabilities.

Then came the era of IoT (Internet of Things) and IIoT (Industrial Internet of Things), which further transformed the digital landscape. Devices of all types—from smart thermostats and home appliances to industrial equipment and autonomous machinery—became active participants in the internet ecosystem. These devices generated real-time data, interacted with cloud-based platforms, and performed autonomous actions. This evolution turned the internet into a dynamic, distributed network of devices and sensors, each capable of both consuming and contributing to the overall data flow. It was no longer just about people and systems interacting, but about a web of devices that could sense, analyze, and respond autonomously.

The Grid Edge

The electric system is undergoing a profound transformation. As new technologies and energy sources emerge, the concept of the "grid edge" has become central to discussions about the future of energy. But in the context of the electric system, where exactly is the edge? Everyone seems to have a different answer. Is it where energy is consumed, like a home or a building? Or is it the substation where electricity from the transmission system first enters the distribution grid and flows down to homes and businesses?

Distributed Energy Resources (DERs) often dominate discussions about the grid edge, yet the term is notoriously vague. It encompasses everything from solar panels and battery storage to electric vehicles, EV chargers (both Level 2 and bi-directional), thermostats, water heaters, and virtually any device that consumes, generates, or stores power. This broad definition makes it challenging to precisely discuss the grid edge transformation and its impacts, especially when such a wide range of elements is in play. Yet, much like the internet's transformation, innovations at the grid edge are beginning to reshape the core, driving changes throughout the broader upstream electrical system.

The reality is that there is no single, discrete grid edge. Instead, the grid edge is composed of multiple layers—ranging from the devices, appliances, and equipment in homes, buildings, and businesses, to the transformers, switches, and distribution lines that connect them, and further upstream to the substations that serve as gateways between local distribution and the larger transmission network, which ties into upstream generation assets. The grid edge includes all of these layers, and understanding these layers is essential to grasp how the distribution grid is evolving and how each step of that transformation ripples back to reshape the core.

Outermost Edge: The Consumer Interface The outermost layer of the grid edge consists of a diverse range of devices and equipment that interact directly with the electric system. These can be categorized into three primary classes:

• Consumption Devices: These include traditional end-use devices that draw power from the grid, such as appliances, lighting systems, water heaters, EV chargers, refrigerators, and HVAC units. In recent years, more advanced devices like smart thermostats, digital load panels, and interactive water heaters have emerged, offering consumers greater control over their energy usage. While these devices remain primarily consumers of electricity, they can adjust their consumption patterns dynamically based on signals from the grid and user preferences, often through automated responses.
• Generation Devices: This class includes systems that produce energy at the site level, such as rooftop solar panels, micro wind turbines, small-scale combined heat and power (CHP) units, and fuel cells. These devices are transformational, as sites not only consume but also generate electricity at the edge. They can send excess electricity back into the grid when local production exceeds demand, contributing to local energy supply and supporting grid stability.
• Storage Devices: This category encompasses battery systems, including home energy storage units and EV batteries capable of storing excess energy for later use via bi-directional EV chargers. These systems play a dual role: they can draw power from the grid during off-peak times or store surplus energy from local generation, and they can discharge this stored energy back into the home or even into the grid when needed. This capability provides critical flexibility in managing both local demand and grid supply. By injecting energy back into the grid, they can support local grid needs or contribute to system-wide services, such as peak shaving and frequency regulation.

Together, these devices at the outermost edge create a dynamic interaction point with the grid, where energy can potentially flow bi-directionally—power is drawn, generated, and stored in a continuous cycle. The vision of a fully bi-directional energy flow, where local resources interact seamlessly and autonomously with the grid, is gradually taking shape. However, it is not yet fully realized. The middle layer of the grid, responsible for managing the flow of electricity between substations and end-users, still faces significant challenges in adapting to this shift. The complexities of injecting power back into the grid, real-time coordination, voltage and power flow control, and ensuring stability across diverse sources remain hurdles.

Achieving this vision will require substantial advancements in technology and innovation in the upstream inner layers of the edge to effectively manage a bi-directional distribution system, ensuring that the potential of the outermost edge can be fully harnessed.

Middle Edge: The Distribution Infrastructure

The middle layer of the grid serves as a critical link, facilitating the flow of electricity from substations to homes, buildings, and businesses. This layer comprises a network of transformers, voltage regulators, capacitor banks, switchgear, and reclosers—each playing an essential role in maintaining voltage levels and ensuring reliable power delivery. Unlike the outermost edge, where devices directly interact with consumers, the middle layer is responsible for modulating power flow and distributing electricity efficiently across different areas of the grid.

Fundamentally, this infrastructure is designed to step down voltage from substations, adapting high-voltage electricity to levels suitable for end-use consumption. Distribution transformers adjust the voltage as power moves through local neighborhoods, while voltage regulators and capacitor banks help maintain power quality and voltage stability over longer distances. Capacitor banks provide reactive power compensation, correcting voltage drops and improving overall efficiency along distribution feeders. Switchgear and reclosers serve as automated mechanisms to manage faults, isolate damaged sections, and restore service quickly during outages.

As distributed energy resources (DERs) that generate electricity continue to grow, the middle edge faces new and evolving demands. Historically, this layer was designed for one-way, predictable power flow—from substations to consumers. Now, with solar panels, home batteries, and EVs increasingly capable of sending power back into the grid, the reality of two-way energy flow is becoming more pressing. Yet, this shift to a bi-directional distribution system presents significant challenges, requiring the middle layer to adapt in ways it was never originally designed to handle.

This adaptation is complex and involves more than just technical upgrades; it requires a fundamental reimagining of how the middle edge operates. Upgrading traditional equipment with advanced technologies that can monitor, control, and balance electricity flows in real time is essential. For example, smart transformers, automated switches, and enhanced capacitor banks can better manage fluctuations in local generation and consumption. Advanced sensors and communication networks will be crucial to providing real-time visibility into the state of the grid, enabling improved coordination with both the outermost edge and the substations.

The middle edge thus stands at a crossroads. It must evolve from a relatively passive conduit for delivering power into an active, intelligent system capable of managing increasingly dynamic electricity flows. While this transformation is complex, it is crucial for unlocking the potential of a flexible, resilient, and efficient grid that can support the future of energy.

Innermost Edge: The Substation

The innermost layer of the grid edge revolves around substations, which serve as critical junctions between the high-voltage transmission system and the lower-voltage distribution network. Substations perform the vital function of stepping down high-voltage electricity from transmission lines to levels that are safe and suitable for delivery to homes, businesses, and other end-users. This voltage transformation enables power to travel long distances efficiently while ensuring it can be used safely at the local level.

Beyond their role in voltage transformation, substations also act as control hubs for the distribution network. They house essential equipment such as circuit breakers, switchgear, and transformers that manage and route power flows throughout the distribution system. Modern substations are increasingly equipped with advanced sensors and Supervisory Control and Data Acquisition (SCADA) systems, providing real-time data about power flows, equipment status, and potential faults. This data is invaluable for grid operators, allowing them to make informed decisions and maintain the reliability and stability of the grid.

As the grid edge evolves, substations are being called upon to play a more active role in coordinating and balancing distributed energy resources (DERs), including distribution grid-tied storage, renewable generation, and microgrids. Microgrids, which are localized energy systems capable of operating independently or in conjunction with the main grid, add another layer of complexity. They allow communities, campuses, and industrial sites to manage their own generation and storage, providing resilience during grid outages and optimizing energy use during normal operations. Substations play a key role in integrating these microgrids, helping to balance their inputs and outputs with the broader grid’s needs.

These resources—such as battery storage systems, solar or wind farms, and microgrids—add complexity to energy flows. Substations must balance power inputs from these local generation sources with the demand from the surrounding area and manage the discharge of stored energy during periods of peak demand. Importantly, smart DERs can also help manage aggregated load flexibility, allowing for more precise control over when and how electricity is consumed. By coordinating flexible loads like smart thermostats, EV chargers, and responsive appliances, substations can adjust demand in real-time to align with local generation and grid conditions, providing another tool for maintaining stability.

This shift requires substations to adapt their traditional functions to manage more dynamic and variable power flows, moving beyond simply serving as passive transition points between transmission and distribution. The innermost edge, centered on substations, is increasingly becoming an intelligent node that balances power inputs from transmission, local generation sources, microgrids, and grid-tied storage. Additionally, distribution grid-tied storage and microgrids provide a new level of flexibility for managing local variability in generation and consumption. They allow substations to store excess energy during times of high renewable output or to absorb energy generated within microgrids, discharging it back into the grid when demand exceeds local generation. This capability helps smooth out fluctuations from intermittent sources like solar and wind, ensuring a more stable power supply even as the energy landscape becomes increasingly decentralized.

To fully realize these capabilities, significant upgrades and investments in digital infrastructure are required. This includes enhanced communication networks, data analytics, and automated control systems. However, beyond these digital advancements, there is also a need for more dynamic, intelligent, and autonomous systems to manage the distribution system and the increasingly complex interactions between high-voltage transmission, local generation, microgrids, grid-tied storage, and end-user demand. These systems must be capable of responding to real-time changes in energy flows and adjusting operations autonomously to maintain stability and efficiency.

Moreover, achieving this vision will require changes to the physical infrastructure of substations themselves. Upgrading to more advanced equipment, expanding capacity to accommodate local generation and storage, and redesigning layouts to support a more dynamic energy landscape are all crucial steps. By evolving into more adaptive and responsive control centers, equipped with both digital and physical enhancements, substations will be key enablers in the transition to a smarter, more resilient, and adaptable grid.

Embracing the Future of the Grid Edge

The transformation of the grid edge is redefining the way energy is produced, distributed, and consumed. Each layer of the edge plays a distinct role in this evolution, contributing to a more dynamic and interconnected energy landscape:

• The Outermost Edge, with its diverse array of consumption, generation, and storage devices, marks a new era of grid interactivity. It provides a glimpse into the potential of bi-directional energy flow, where homes, buildings, businesses, and communities do more than just consume power—they actively interact with the grid by generating and storing energy, contributing to both local and system-wide needs.
• The Middle Edge, once a predictable conduit for power flow, is now facing a turning point. It must adapt to the complexities of distributed generation, fluctuating demand, and the rise of two-way energy flows. Transforming from a passive to an active, intelligent system is critical for enabling the seamless integration of distributed resources into the broader grid, making it more responsive and adaptable to real-time changes.
• The Innermost Edge, centered on substations, is taking on new responsibilities as a critical node that balances power inputs from transmission, distributed renewable sources, microgrids, and grid-tied storage. The evolution of substations into hubs of data, control, and coordination with autonomous management systems is vital for maintaining grid stability and resilience in the face of increasing complexity.

These shifts collectively illustrate a broader transition at the grid edge: a movement from a deterministic, static and linear model—where energy flows predictably from central generation to consumption—to a dynamic, non-linear model that adapts in real-time to changes in supply, demand, distributed generation, load, and distributed storage. This shift requires new management approaches that can handle the complexities of a modern, bi-directional grid.

As this transformation progresses, it becomes increasingly clear that legacy traditional systems like ADMS, DERMS/DRMS, DMS, and OMS are struggling to keep pace with the rapid and continuous shift from a deterministic, static, linear model to a non-deterministic, dynamic, real-time, boundary-driven non-linear model evolving at the outermost edge of the grid. To effectively manage this new complexity, these systems need to be completely reimagined and redesigned—rewritten from the ground up to handle the adaptive, non-linear, real-time, and far more scalable and granular nature of modern distribution grid dynamics. Originally built for a legacy, linear, and static grid defined by predictability and one-way power flows, these systems cannot adapt quickly enough to the evolving needs of tomorrow’s grid edge. Bridging this gap will likely require a new class of AI-based management systems—ones that offer far greater intelligence, dynamism, scalability, and autonomous self-optimization. These advanced systems must integrate seamlessly with existing infrastructure and legacy ADMS/DMS/OMS systems, abstracting their complexities while enabling the rapid innovation, flexibility, and scalability needed for a resilient grid, all while maintaining backward compatibility with these legacy management systems.

Moreover, the traditional distinctions between 'behind the meter' and 'front of the meter' are increasingly blurred, and soon, the imaginary lines that once separated these domains will disappear entirely. As distributed generation, energy storage, and flexible load management expand, energy flows will cross these boundaries more frequently and seamlessly in both directions. In this evolving environment, the role of traditional metering—both smart and dumb meters—is diminishing and will soon disappear. Much like pagers in the smartphone era or typewriters in the age of personal computers, metering will be replaced by more advanced, real-time, multi-layer measuring systems embedded within next-generation Distribution Management Systems. These new systems will provide deeper real-time insights and offer more precise, sophisticated, and intelligent control over grid operations, with advanced multi-layer metering capabilities and framework seamlessly integrated.

While the journey is complex, the rewards are clear: a more resilient, distributed, adaptive, and efficient energy system capable of meeting the demands of a decarbonized, decentralized, and digitized world. Yet, achieving this vision will require more than just technological advancements; it will also demand a rethinking of grid architecture, regulatory frameworks, and business models to support the evolving nature of energy markets.

The grid edge represents more than just technological progress; it is the driver and embodies the heart of the energy transition and grid modernization, where the vision of a cleaner, smarter, and more sustainable future takes shape.