Institutional Investing in Infrastructure senior editor Drew Campbell spoke with two alternative energy investment managers about smart grids, batteries and transmission. Below is an excerpt of this conversation with Brad Nordholm, senior managing director and co-head of Starwood Energy Group; and David Scaysbrook, co-founder and managing partner, Quinbrook Infrastructure Partners.

How do smart grids work and why are they needed?

Brad Nordholm: I think of a smart grid as a system of power supply, power storage, transmission and points of power demand — all interconnected electrically and digitally, with monitors and controllers. The benefits are numerous and include more efficient transmission of electricity, quicker response to rapid fluctuations in supply and demand, reduced operational