By 2030, global energy consumption will increase by 50 percent, the U.S. Energy Information Agency estimates. One way to meet this growing energy demand is to increase capacity by building new power plants. Another way is to use the electricity we currently have coursing through our grid more efficiently.

While we will likely need both, there are many compelling arguments that we should focus on developing a smarter, more efficient grid now -- and also building one from scratch in places that currently have little or no electrical grid infrastructure.

But there are still a few things holding up this smart grid we’ve been talking about for the last several years, fortunately there are also reasons to believe those obstacles will be overcome.

1. People don't understand what the smart grid is... But that apparently doesn’t matter.

A recent study found that 70 percent of Americans are not familiar with the phrase "smart grid.”

In short, a smart grid is any electric grid where suppliers and consumers communicate via two-way technology to share information about electricity use and pricing. A smart grid will allow a network of homes, businesses and other electricity consumers to control their electricity consumption automatically via the price signals sent from utilities. When demand on the grid is higher, electricity would be priced at a higher rate, incentivizing users to hold off using a given appliance until rates were lower.

A smart grid is also one that can not only incorporate the input of new, distributed sources of electricity produced by solar, wind and geothermal installations of all shapes and sizes, but one that can also account for that electricity coming onto the grid, making that meter of yours finally spin backwards.

But does it really matter if people know what a smart grid is? Remember that research showing the majority of Americans were unfamiliar with the term ‘smart grid?’ That research also shows they are in favor of it regardless.

That said, an efficient smart-grid will be one with effective education, outreach and buy-in.

2. The smart grid is expensive... But governments are still betting big on it.

It’s no secret that modernizing the electricity infrastructure won’t be cheap. Upgrading transmission and distribution infrastructure to carry more information requires a fiber optic overhaul of massive proportions. That is part of the reason why “smart grid cities” are being tested where utilities or municipalities can run controlled experiments about how to plan, build and pay for smart grid infrastructure.

The Electric Power Reserch Institute (EPRI) estimates the cost of updating the U.S. grid at $165 billion over the next two decades. And soaring costs for smart grid infrastructure in the city of Boulder, Colorado have already driven construction estimates to over $100 million s.

The good news is that there has been some pretty significant interest from governments and investors in smart grid technologies. Smart grid has seen the most significant investments in China and the U.S. The Chinese government says it will invest 25 billion yuan ($3.7 billion) this year alone on building China’s smart grid network.

3. The smart grid is a regulatory nightmare... In some places more than others.

Structural obstacles in the way electricity has been marketed, sold and regulated have ensured that the regulatory infrastructure for a smart grid is still behind the technological infrastructure. The success of smart grid deployment depends more on the regulatory landscape than it does the market. The best and most efficient smart grid products will be utterly useless without the regulatory framework needed to make them attractive to the consumer. In short, without a smart rate tariff, smart meters and smart grids are not smart at all.

Not only that, but layers of multilevel governance and regulatory oversight make the situation even more complicated. In the U.S., for example, each state's public utility commission regulates the retail price of electricity and rate of return. That means fifty separate rate-setting processes for a system that would work most efficiently on a regional grid level.

Of course, the U.S.’ fragmented federal structure offers an extreme example. In countries where national rate-setting and regulatory oversight is more closely tied to the electricity applies, smart grid rate-setting and rulemaking may be easier to implement. (Continued...)