Assessing the Environmental and Economic Effects of Smart Grid Integration Using SEM

Authors

DOI:

https://doi.org/10.33050/italic.v4i1.934

Keywords:

Smart Grid, Renewable Energy, SmartPLS, Energy Efficiency, Economic Impact

Abstract

The global shift toward renewable energy has intensified the need for intelligent energy management systems capable of addressing variability in power supply and optimizing system-wide performance. Smart grid technologies have emerged as a key enabler in achieving sustainable, efficient, and data-drivenvenergy distribution. This study employs a quantitative approach using Structural Equation Modeling (SEM) via SmartPLS to analyze data collected from stakeholders involved in renewable energy deployment, utility operations, and smart grid implementation. The model evaluates the relationships between smart grid integration, environmental performance, and economic outcomes. The primary aim of this research is to assess how smart grid adoption influences carbon emission reduction, energy efficiency enhancement, and cost optimization within renewable energy ecosystems. The SEM analysis indicates a statistically significant positive effect of smart grid integration on both environmental and economic indicators. Smart grid implementation improves energy efficiency by more than 30%, while operational cost savings reach up to 25% over extended periods. Carbon emission reduction is identified as a key mediating factor within the model, reinforcing the ecological benefits of smart grid adoption. The findings demonstrate that smart grid technologies contribute substantially to both sustainability and economic resilience in renewable energy management. The study provides actionable insights for energy policymakers, grid operators, and industry practitioners, highlighting the vital role of intelligent, data-driven infrastructures in advancing future global energy systems.

References

M. Inci, ¨O. C¸ elik, A. Lashab, K. C¸ . Bayındır, J. C. Vasquez, and J. M. Guerrero, “Power system integration of electric vehicles: A review on impacts and contributions to the smart grid,” Applied Sciences, vol. 14, no. 6, p. 2246, 2024.

B. Gudlaugsson, T. G. Ahmed, H. Dawood, C. Ogwumike, M. Short, and N. Dawood, “Cost and environmental benefit analysis: An assessment of renewable energy integration and smart solution technologies in the integridy project,” Cleaner Energy Systems, vol. 5, p. 100071, 2023.

L. Meria, C. S. Bangun, and J. Edwards, “Exploring sustainable strategies for education through the adoption of digital circular economy principles,” International Transactions on Education Technology (ITEE), vol. 3, no. 1, pp. 62–71, 2024.

M. Khaleel, Z. Yusupov, B. Alfalh, M. T. Guneser, Y. Nassar, and H. El-Khozondar, “Impact of smart grid technologies on sustainable urban development,” Int. J. Electr. Eng. and Sustain., pp. 62–82, 2024.

Q. Aini, P. Purwanti, R. N. Muti, E. Fletcher et al., “Developing sustainable technology through ethical ai governance models in business environments,” ADI Journal on Recent Innovation, vol. 6, no. 2, pp. 145–156, 2025.

U.S. Department of Energy, “Guidelines for next-generation grid communications architecture,” U.S. Department of Energy, Tech. Rep., 2024.

H. Setiyowati, M. A. Harriz, E. Junaedi, N. V. Akbariani, and S. Widodo, “Digitalizing pindang industry with business model canvas for sustainable blue economy,” Aptisi Transactions on Technopreneurship (ATT), vol. 7, no. 2, pp. 360–370, 2025.

U. Rahardja, M. Miftah, M. Rakhmansyah, and J. Zanubiya, “Revolutionizing financial services with big data and fintech: A scalable approach to innovation,” ADI Journal on Recent Innovation, vol. 6, no. 2, pp. 118–129, 2025.

F. Salinas-Herrera, A. Moeini, and I. Kamwa, “Survey of simulation tools to assess techno-economic benefits of smart grid technology in integrated t&d systems,” Sustainability, vol. 14, no. 13, p. 8108, 2022.

C. Wang, J. Gu, O. S. Mart´ınez, and R. G. Crespo, “Economic and environmental impacts of energy efficiency over smart cities and regulatory measures using a smart technological solution,” Sustainable Energy Technologies and Assessments, vol. 47, p. 101422, 2021.

A. Ismail, A. R. Ismail, N. A. Shaharuddin, M. A. Ara, A. A. Puzi, S. Awang, and R. Ramli, “Vision based vehicle classification for smart city,” Aptisi Transactions on Technopreneurship (ATT), vol. 7, no. 2, pp. 441–453, 2025.

M. Farghali, A. I. Osman, Z. Chen, A. Abdelhaleem, I. Ihara, I. M. Mohamed, P.-S. Yap, and D. W. Rooney, “Social, environmental, and economic consequences of integrating renewable energies in the electricity sector: a review,” Environmental Chemistry Letters, vol. 21, no. 3, pp. 1381–1418, 2023.

O. S. Neffati, S. Sengan, K. D. Thangavelu, S. D. Kumar, R. Setiawan, M. Elangovan, D. Mani, and P. Velayutham, “Migrating from traditional grid to smart grid in smart cities promoted in developing country,” Sustainable Energy Technologies and Assessments, vol. 45, p. 101125, 2021.

C. P. Ohanu, S. A. Rufai, and U. C. Oluchi, “A comprehensive review of recent developments in smart grid through renewable energy resources integration,” Heliyon, vol. 10, no. 3, 2024.

M. Kuswari, R. Gantino, and J. Maratis, “Maximizing healthcare service information system: Understanding the influence of integration on efficiency,” ADI Journal on Recent Innovation, vol. 6, no. 2, pp. 108–117, 2025.

S. S. Refaat, O. Ellabban, S. Bayhan, H. Abu-Rub, F. Blaabjerg, and M. M. Begovic, Smart Grid and Enabling Technologies. John Wiley & Sons, 2021.

Y. Yuan, H. Na, C. Chen, Z. Qiu, J. Sun, L. Zhang, T. Du, and Y. Yang, “Status, challenges, and prospects of energy efficiency improvement methods in steel production: A multi-perspective review,” Energy, vol. 304, p. 132047, 2024.

T. N. Bhattarai, S. Ghimire, B. Mainali, S. Gorjian, H. Treichel, and S. R. Paudel, “Applications of smart grid technology in nepal: status, challenges, and opportunities,” Environmental Science and Pollution Research, vol. 30, no. 10, pp. 25 452–25 476, 2023.

U. Rahardja, E. A. Natalia, Q. Aini, T. S. Goh, and C. P. Lim, “Calculus driven creativepreneurship as an innovative economic solution for msmes: Kewirausahaan kreatif berbasis kalkulus sebagai solusi ekonomi inovatif untuk umkm,” ADI Pengabdian Kepada Masyarakat, vol. 5, no. 2, pp. 104–116, 2025.

M. A. Judge, A. Khan, A. Manzoor, and H. A. Khattak, “Overview of smart grid implementation: Frameworks, impact, performance and challenges,” Journal of Energy Storage, vol. 49, p. 104056, 2022.

A. Kwilinski, O. Lyulyov, H. Dzwigol, I. Vakulenko, and T. Pimonenko, “Integrative smart grids’ assessment system,” Energies, vol. 15, no. 2, p. 545, 2022.

T. W. Sitanggang, H. Priyono, L. Patel et al., “Lingkungan bermain digital mengintegrasikan teknologi dengan permainan tradisional di prasekolah: Digital play environment integrating technology with traditional play in preschool,” Jurnal MENTARI: Manajemen, Pendidikan dan Teknologi Informasi, vol. 3, no. 2, pp. 187–194, 2025.

M. of Communication and I. of the Republic of Indonesia, “Indonesia digital transformation roadmap 2021–2024,” Government Policy Document, 2021, policy framework supporting national digital transformation and smart infrastructure development. [Online]. Available: https://www.kominfo.go.id

F. Calise, F. L. Cappiello, M. D. d’Accadia, and M. Vicidomini, “Smart grid energy district based on the integration of electric vehicles and combined heat and power generation,” Energy Conversion and Management, vol. 234, p. 113932, 2021.

S. Martinez, J. C. Rodr´ıguez, and S. Lestari, “Exploring digital circular economy principles in educational institutions,” International Transactions on Education Technology (ITEE), vol. 3, no. 1, pp. 17–25, 2024.

O. M. Butt, M. Zulqarnain, and T. M. Butt, “Recent advancement in smart grid technology: Future prospects in the electrical power network,” Ain Shams Engineering Journal, vol. 12, no. 1, pp. 687–695, 2021.

PPSDM KEBTKE, “Microgrid (smart grid) training handbook,” Kementerian Energi dan Sumber Daya Mineral (ESDM), Indonesia, Tech. Rep., 2023.

I. Khong, N. A. Yusuf, A. Nuriman, and A. B. Yadila, “Exploring the impact of data quality on decision making processes in information intensive organizations,” APTISI Transactions on Management, vol. 7, no. 3, pp. 253–260, 2023.

T. Kataray, B. Nitesh, B. Yarram, S. Sinha, E. Cuce, S. Shaik, P. Vigneshwaran, and A. Roy, “Integration of smart grid with renewable energy sources: Opportunities and challenges–a comprehensive review,”Sustainable Energy Technologies and Assessments, vol. 58, p. 103363, 2023.

D. Hidayati, A. Andriyansah, G. P. Cesna, A. Y. Fauzi, D. Apriliasari, and U. Rahardja, “Building efficient iot systems with edge computing integration,” International Journal of Cyber and IT Service Management, vol. 4, no. 2, pp. 72–79, 2024.

M. Cakir, I. Cankaya, I. Garip, and I. Colak, “Advantages of using renewable energy sources in smart grids,” in 2022 10th International Conference on Smart Grid (icSmartGrid). IEEE, 2022, pp. 436–439.

M. A. Khan, A. M. Saleh, M. Waseem, and I. A. Sajjad, “Artificial intelligence enabled demand response: Prospects and challenges in smart grid environment,” Ieee Access, vol. 11, pp. 1477–1505, 2022.

T. Nasir, S. S. H. Bukhari, S. Raza, H. M. Munir, M. Abrar, H. A. u. Muqeet, K. L. Bhatti, J.-S. Ro, and R. Masroor, “Recent challenges and methodologies in smart grid demand side management: State-of-the-art literature review,” Mathematical Problems in Engineering, vol. 2021, no. 1, p. 5821301, 2021.

L. Meria, A. Andriyansah, F. Sutisna, A. William, and L. Pasha, “Unveiling the role of smartpls and technology in analyzing hr dynamics for organizational effectiveness,” International Journal of Cyber and IT Service Management, vol. 5, no. 1, pp. 71–80, 2025.

M. Meliani, A. E. Barkany, I. E. Abbassi, A. M. Darcherif, and M. Mahmoudi, “Energy management in the smart grid: State-of-the-art and future trends,” International Journal of Engineering Business Management, vol. 13, p. 18479790211032920, 2021.

M. A. Syari, U. Rahardja, T. Wellem, H. D. Purnomo, and R. Buaton, “Iot enabled smart farming system for optimizing crop management using sensors and machine learning,” in 2025 4th International Conference on Creative Communication and Innovative Technology (ICCIT). IEEE, 2025, pp. 1–7.

M. Waseem, M. Adnan Khan, A. Goudarzi, S. Fahad, I. A. Sajjad, and P. Siano, “Incorporation of blockchain technology for different smart grid applications: Architecture, prospects, and challenges,” Energies, vol. 16, no. 2, p. 820, 2023.

K. E. Bassey, J. Opoku-Boateng, B. O. Antwi, and A. Ntiakoh, “Economic impact of digital twins on renewable energy investments,” Engineering Science & Technology Journal, vol. 5, no. 7, pp. 2232–2247, 2024.

R. Z. Ikhsan, S. Rahayu, A. H. Arribathi, and N. Azizah, “Integrating artificial intelligence with 3d printing technology in healthcare: Sustainable solutions for clinical training optimization,” ADI Journal on Recent Innovation, vol. 6, no. 2, pp. 99–107, 2025.

M. I. Herdiansyah, A. H. Mirza, D. Abdullah, R. A. Sunarjo, U. Rahardja, and S. Audiah, “Cross-cultural adoption of gamified attendance systems in multinational work environments,” in 2025 4th International Conference on Creative Communication and Innovative Technology (ICCIT). IEEE, 2025, pp. 1–7.

S. Wijono, U. Rahardja, H. D. Purnomo, N. Lutfiani, and N. A. Yusuf, “Leveraging machine learning models to enhance startup collaboration and drive technopreneurship,” Aptisi Transactions on Technopreneurship (ATT), vol. 6, no. 3, pp. 432–442, 2024.

H. Hamdan, E. A. Nabila, R. A. Gunawan, A. P. Valentie, and C. Perez, “Digitalization of financial literacy and social media as a sustainable economic strategy in food & beverages: Digitalisasi literasi keuangan dan media sosial sebagai strategi ekonomi berkelanjutan pada food & beverages,” ADI Bisnis Digital Interdisiplin Jurnal, vol. 6, no. 1, pp. 99–107, 2025.

R. E. R. Shawon, H. M. Dalim, S. K. Shil, N. Gurung, M. Hasanuzzaman, S. Hossain, and T. Rahman, “Assessing geopolitical risks and their economic impact on the usa using data analytics,” Journal of Economics, Finance, and Accounting Studies, vol. 6, no. 6, p. 5, 2024.

Downloads

Published

2025-11-12

Issue

Section

Articles