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Power systems in the United States and Europe are adding more sensors, software, and automation to handle rising demand and a fast-changing supply mix.
In the U.S., federal rules and programs are pressing grid planners to look further ahead and speed up how new power plants connect.
Reliability groups are also warning that inverter-based resources such as solar and batteries need better performance and controls.
The result is a governance-led push to make grids more visible, flexible, and resilient through “smart” infrastructure.
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Electric grids are being rebuilt around data, automation, and faster planning cycles. Policymakers and system operators say these changes are needed as electricity demand rises, more renewable generation connects, and extreme weather strains infrastructure.
Across the United States, new federal rules are reshaping how long-distance transmission is planned and paid for. At the same time, federal funding programs are backing grid modernization projects, and reliability watchdogs are focusing on how new inverter-driven power sources behave on the system.
Together, these steps are accelerating a transition toward smarter infrastructure—one that relies as much on software and control systems as it does on wires and transformers.
## New U.S. rules push longer-term planning for transmission
A major part of “smartening” the grid is planning it differently. In 2024, the U.S. Federal Energy Regulatory Commission (FERC) finalized Order No. 1920, which is designed to strengthen long-term regional transmission planning and cost allocation.
The rule directs transmission providers to plan further into the future and to incorporate a wider set of drivers, including changes in generation, load growth, and public policy requirements. It also adds requirements meant to make cost allocation more structured for long-term regional projects.
The governance impact is practical. A grid that is planned on longer horizons is more likely to justify investments in technologies that improve monitoring and control, such as advanced power flow devices and dynamic line ratings, alongside traditional transmission expansion.
## Faster interconnection processes aim to reduce bottlenecks
Smarter infrastructure is also about connecting new resources faster and with clearer requirements.
FERC’s Order No. 2023, issued in 2023 and clarified in 2024, overhauled the generator interconnection process for many U.S. transmission providers. A central change is a shift from a “first-come, first-served” serial approach toward a “first-ready, first-served” cluster study process.
The rule package includes tighter timelines for studies, stronger readiness requirements for developers, and financial consequences for late studies under specified conditions. It also requires transmission providers to evaluate certain “alternative transmission technologies” during interconnection studies, such as power flow control devices and other grid-enhancing technologies.
For governance, the goal is to reduce queue backlogs without lowering technical standards. For the grid, it can mean more consistent data models, clearer technical requirements, and better use of digital tools to run studies and manage upgrades.
## Federal funding programs back grid modernization projects
Regulation is being paired with federal funding. The U.S. Department of Energy’s Grid Resilience and Innovation Partnerships (GRIP) program is a multi-year effort that supports utility and industry projects, smart grid grants, and grid innovation awards.
DOE has also issued targeted research and development funding opportunities through its Office of Electricity to support grid modernization technologies. These efforts include work related to advanced controls and hardware needed for higher-capacity transmission, including high-voltage direct current (HVDC) systems.
Many funded projects focus on practical upgrades: hardening lines, adding automation on distribution systems, and deploying software platforms that help utilities see outages faster and operate networks more dynamically.
## Reliability groups focus on inverter-based resources and system performance
As grids become more digital, they also become more dependent on controls and device behavior.
The North American Electric Reliability Corporation (NERC) has highlighted increasing reliability risks tied to fast load growth and the rising share of inverter-based resources, such as solar photovoltaics and battery storage. NERC has also pointed to performance events involving unexpected reductions in inverter-based output during disturbances in recent years.
These concerns are pushing operators and regulators toward better data collection, updated performance requirements, and more careful modeling of how inverter-based resources respond to faults and frequency events.
In practice, that reinforces the case for smarter infrastructure: more high-speed measurement, clearer telemetry requirements, and control strategies that can stabilize the grid when traditional rotating machines are less dominant.
## Europe follows a similar track with digital energy governance
Europe is moving in the same direction, with governance frameworks that emphasize digitalization of the energy system. The European Commission adopted an action plan on digitalizing energy in 2022 and has continued implementation steps, including expert groups focused on smart energy and data for energy.
The European agenda includes cybersecurity, interoperability, and consumer empowerment, reflecting the reality that smart grids bring more connected devices and more data flows.
## What “smarter infrastructure” looks like on the ground
The shift is not only about high-level policy. It shows up in everyday grid operations.
Utilities are expanding advanced metering infrastructure, deploying distribution management systems, and increasing automation on feeders. Grid operators are also investing in tools that improve visibility of real-time conditions, from phasor measurement units on transmission systems to software that forecasts congestion and supports faster restoration.
Smarter infrastructure is becoming a governance priority because it can support multiple objectives at once: reliability, faster interconnection of new resources, and more efficient use of existing assets—especially when building new lines takes many years.
Even as the technology improves, regulators and reliability organizations are signaling that standards, data quality, and cybersecurity will need to keep pace.
AI Perspective
Smarter grid infrastructure is increasingly being treated as a governance challenge, not just an engineering project. The direction of policy is to make planning, interconnection, and reliability rules better match a power system that changes quickly. The hardest part may be keeping data, standards, and cybersecurity aligned as more devices and software become central to grid operations.
