Study of Smart Grid And Its Potential

In the present era, due to increased power demand to meet up the industrial requirements, the shortfalls in power generation have been attempted to mitigate between supply and demand through developments of National Grid connected systems where all the national power generation sources are connected to National grid and on the basis of the zonal requirement, the energy management is implemented. An “electricity grid” is not a single entity but an aggregate of multiple networks and multiple power generation companies with multiple operators employing varying levels of communication and coordination, most of which is manually controlled .

With this concept, the earlier power shortage has been to some extent equated and is able to control the transmission losses and improve the transmission efficiency to some extent. This contrasts with 60 percent efficiency for grids based on the latest technology which may be the solution for the above problem:


To implement systematically the energy requirement for different zones, it necessarily requires a strategic program of distribution of energy. SCADA and other continuously monitoring systems though in vogue but for quick effective and efficient distribution of energy needs, a smart system which can take into account the requirements of the zones and the availability of energy from the different sources in the zones is required without human interference. Smart grids increase the connectivity, automation and coordination between these suppliers, consumers and networks that perform either long distance transmission or local distribution tasks.

Brief History of Smart Grid

Commercialization of electric power began early in the 21th century. With the light bulb revolution and the promise of the electric motor, demand for electric power exploded, sparking the rapid development of an effective distribution system. At first, small utility companies provided power to local industrial plants and private communities. Some larger businesses even generated their own power. Seeking greater efficiency and distribution, utility companies pooled their resources, sharing transmission lines and quickly forming electrical networks called grids. George Westinghouse boosted the industry with his hydroelectric power plant in Niagara Falls. His was the first to provide power over long distances, extending the range of power plant positioning. He also proved electricity to be the most effective form of power transmission. As the utility business expanded, local grids grew increasingly interconnected, eventually forming the three national grids that provide power to nearly every denizen of the continental US. The Eastern Interconnect, the Western Interconnect, and the Texas Interconnect are linked themselves and form what we refer to as the national power grid. Technological improvements of the power system largely raised in the 51s and 61s, post World War II. Nuclear power, computer controls, and other developments helped fine tune the grid’s effectiveness and operability. Although today’s technology has flown light-years into the future, the national power grid has not kept up pace with modernization. The grid has evolved little over the past fifty years.

The government is keen on overhauling the current electrical system to 21st century standards. With today’s technology, the power grid can become a smart grid, capable of recording, analyzing and reacting to transmission data, allowing for more efficient management of resources, and more cost-effective appliances for consumers. This project requires major equipment upgrades, rewiring, and implementation of new technology. The process will take time, but improvements have already begun to surface. Miami will be the first major city with a smart grid system. We are witnessing a new stage of technological evolution, taking us into a brighter, cleaner future.

Smart grid technologies have emerged from earlier attempts at using electronic control, metering, and monitoring. In the 1981s, Automatic meter reading was used for monitoring loads from large customers, and evolved into the Advanced Metering Infrastructure of the 1991s, whose meters could store how electricity was used at different times of the day. Smart meters add continuous communications so that monitoring can be done in real time, and can be used as a gateway to demand response-aware devices and “smart sockets” in the home. Early forms of such Demand side management technologies were dynamic demand aware devices that passively sensed the load on the grid by monitoring changes in the power supply frequency. Devices such as industrial and domestic air conditioners, refrigerators and heaters adjusted their duty cycle to avoid activation during times the grid was suffering a peak condition. Beginning in 2111, Italy’s Telegestore Project was the first to network large numbers (27 million) of homes using such smart meters connected via low bandwidth power line communication. Recent projects use Broadband over Power Line (BPL) communications, or wireless technologies such as mesh networking that is advocated as providing more reliable connections to disparate devices in the home as well as supporting metering of other utilities such as gas and water.

Monitoring and synchronization of wide area networks were revolutionized in the early 1991s when the Bonneville Power Administration expanded its smart grid research with prototype sensors that are capable of very rapid analysis of anomalies in electricity quality over very large geographic areas. The culmination of this work was the first operational Wide Area Measurement System (WAMS) in 2111. Other countries are rapidly integrating this technology China will have a comprehensive national WAMS system when its current 5-year economic plan is complete in 2112.

First Cities with Smart Grids

The earliest, and still largest, example of a smart grid is the Italian system installed by Enel S.p.A. of Italy. Completed in 2115, the Telegestore project was highly unusual in the utility world because the company designed and manufactured their own meters, acted as their own system integrator, and developed their own system software. The Telegestore project is widely regarded as the first commercial scale use of smart grid technology to the home, and delivers annual savings of 511 million euro at a project cost of 2.1 billion euro.

In the US, the city of Austin, Texas has been working on building its smart grid since 2113, when its utility first replaced 1/3 of its manual meters with smart meters that communicate via a wireless mesh network. It currently manages 211,111 devices real-time (smart meters, smart thermostats, and sensors across its service area), and expects to be supporting 511,111 devices real-time in 2119 servicing 1 million consumers and 43,111 businesses. Boulder, Colorado completed the first phase of its smart grid project in August 2118. Both systems use the smart meter as a gateway to the home automation network (HAN) that controls smart sockets and devices. Some HAN designers favor decoupling control functions from the meter, out of concern of future mismatches with new standards and technologies available from the fast moving business segment of home electronic devices.

Hydro One, in Ontario, Canada is in the midst of a large-scale Smart Grid initiative, deploying a standards-compliant communications infrastructure from Trilliant. By the end of 2111, the system will serve 1.3 million customers in the province of Ontario. The initiative won the “Best AMR Initiative in North America” award from the Utility Planning Network. The City of Mannheim in Germany is using real time Broadband Power line (BPL) communications in its Model City Mannheim “MoMa” project adelaide in Australia also plans to implement a localized green Smart Grid electricity network in the Tonsely Park redevelopment.

InovGrid is an innovative project in Evora that aims to equip the electricity grid with information and devices to automate grid management, improve service quality, reduce operating costs, promote energy efficiency and environmental sustainability, and increase the penetration of renewable energies and electric vehicles. It will be possible to control and manage the state of the entire electricity distribution grid at any given instant, allowing suppliers and energy services companies to use this technological platform to offer consumers information and added-value energy products and services. This project to install an intelligent energy grid places Portugal and EDP at the cutting edge of technological innovation and service provision in Europe.

Smart Grid Definition

A SMART GRID delivers electricity from supplier to consumers using two- way digital technology to control appliances at consumers’ homes to save energy, reduce cost and increase reliability and transparency. It overlays the electricity distribution grid with an information and net metering system. Power travels from the power plant to our house through an amazing system called the power distribution grid. Such a modernized electricity networks is being promoted by many governments as a way of addressing energy independences, global warming and emergency resilience issues. Smart meters may be part of smart grid, but alone do not constitute a smart grid.

A smart grid includes an intelligent monitoring system that keeps track of all electricity flowing in the system. It also incorporates the use of superconductive transmission lines for less power loss, as well as the capability of the integrating renewable electricity such as solar and wind. When power is least expensive the user can allow the smart grid to turn on selected home appliances such as washing machines or factory processes that can run at arbitrary hours. At peak times it could turn off selected appliances to reduce demand. The smart grid is able to respond appropriately to different types of incidents, such as weather issues or failing equipment. The smart grid can identify a piece of failing equipment (or even find a tree branch that’s fallen on an electrical line) and alert the Provider. Conversely, the smart grid can extend the life of some equipment: Today, some Providers automatically replace equipment once it reaches a certain age, whether it’s worn out or not. With a smart grid, equipment could remain in operation until a computer detects its failure, thereby saving unnecessary replacement costs. In some cases the smart grid can solve power outages and other service interruptions. When the smart grid overlays the electrical grid, computerized devices monitor and adjust the quality and flow of power between its sources and its destinations. These devices recognize situations such as peak usage hours, when most people are in their homes. The devices can also detect energy-wasting appliances.

In short, the smart grid is the development of a reliable network of transmission and distribution lines that allow new technologies, equipment, and control systems to be easily integrated into an energy grid.

Smart Grid and its Need

Understanding the need for smart grid requires acknowledging a few facts about our infrastructure. The power grid is the backbone of the modern civilization, a complex society with often conflicting energy needs-more electricity but fewer fossil fuels, increased reliability yet lower energy costs, more secure distribution with less maintenance, effective new construction and efficient disaster reconstruction. But while demand for electricity has risen drastically, its transmission is outdated and stressed. The bottom line is that we are exacting more from a grid that is simply not up to the task.

Aims of the Smart Grids-the Vision

  • Provide a user-centric approach and allow new services to enter into the market;
  • Establish innovation as an economical driver for the electricity networks renewal;
  • Maintain security of supply, ensure integration and interoperability;
  • Provide accessibility to a liberalized market and foster competition;
  • Enable distributed generation and utilization of renewable energy sources;
  • Ensure best use of central generation;
  • Consider appropriately the impact of environmental limitations;
  • Enable demand side participation (DSR, DSM);
  •  Inform the political and regulatory aspects;
  • Consider the societal aspects.

Key Features of Smart Grid

  • Intelligent – Capable of sensing system overloads and rerouting power to prevent or minimize a potential outage; of working autonomously when conditions required resolution faster than humans can respond and co-operatively in aligning the goals of utilities, consumers and regulators.
  • Efficient – Capable of meeting efficient increased consumer demand without adding infrastructure.
  • Accommodating – Accepting energy from virtually any fuel source including solar and wind as easily and transparently as coal and natural gas: capable of integrating any and all better ideas and technologies – energy storage technologies. For e.g. – as they are market proven and ready to come online.
  • Motivating – Enable real-time communication between the consumer and utility, so consumer can tailor their energy consumption based on individual preferences, like price and or environmental concerns.
  • Resilient – Increasingly resistant to attack and natural disasters as it becomes more decentralization and reinforced with smart grid security protocol.
  • Green – Slowing the advance of global climate change and offering a genuine path towards significant environmental improvement.
  • Load Handling – The sum/total of the power grid load is not stable and it varies over time. In case of heavy load, a smart grid system can advise consumers to temporarily minimize energy consumption.
  • Demands Response Support – Provides users with an automated way to reduce their electricity bills by guiding them to use low-priority electronic devices when rates are lower.
  • Decentralization of Power Generation – A distributed or decentralized grid system allows the individual user to generate onsite power by employing any appropriate method at his or her discretion.
  • It can repair itself.
  • It encourages consumer participation in grid operations.
  • It ensures a consistent and premium-quality power supply that resists power leakages.
  • It allows the electricity markets to grow and make business.

The Key Challenges for Smart Grids

  • Strengthening the grid: ensuring that there is sufficient transmission capacity to interconnect energy resources, especially renewable resources.
  • Moving offshore: developing the most efficient connections for offshore wind farms and for other marine technologies.
  • Developing decentralized architectures: enabling smaller scale electricity supply systems to operate harmoniously with the total system.
  • Communications delivering the communications infrastructure to allow potentially millions of parties to operate and trade in the single market.
  • Active demand side: enabling all consumers, with or without their own generation, to play an active role in the operation of the system.
  • Integrating intermittent generation: finding the best ways of integrating intermittent generation including residential micro generation.
  • Enhanced intelligence of generation, demand and most notably in the grid.
  • Preparing for electric vehicles: whereas Smart Grids must accommodate the needs of all consumers, electric vehicles are particularly emphasized due to their mobile and highly dispersed character and possible massive deployment in the next years, what would yield a major challenge for the future electricity networks.

The earliest, and still largest, example of a smart grid is the Italian system installed by Enel S. p. A. of Italy.

Making the Power Grid Smart

The utilities get the ability to communicate with and control end user hardware, from industrial- scale air conditioner to residential water heaters. They use that to better balance supply and demand, in part by dropping demand during peak usage hours. Taking advantages of information technology to increase the efficiency of the grid, the delivery system, and the use of electricity at the same time is itself a smart move. Simply put, a smart grid combined with smart meters enables both electrical utilities and consumer to be much more efficient.

A smart grid not only moves electricity more efficiently in geographic terms, it also enables electricity use to be shifted overtime-for example, from period of peak demand to those of off-peak demand. Achieving this goal means working with consumers who have “smart meters” to see exactly how much electricity is being used at any particular time. This facilitates two-way communication between utility and consumer. So they can cooperate in reducing peak demand in a way that it’s advantageous to both. And it allow to the use of two ways metering so that customer who have a rooftop solar electric panel or their own windmill can sell surplus electricity back to the utility.

Status of the Smart Grid According to the Department of Energy

The DOE has just released a state of the smart grid report  as part of a directive in the Energy Independence and Security Act of 2117 that tells the Secretary of Energy to “report to Congress concerning the status of smart grid deployments nationwide and any regulatory or government barriers to continued deployment.” So, here we have it. The report as a whole is a really interesting and worth a full read, but key findings include:

Distributed energy resources

The ability to connect distributed generation, storage, and renewable resources is becoming more standardized and cost effective.

Electricity infrastructure

Those smart grid areas that fit within the traditional electricity utility business and policy model have a history of automation and advanced communication deployment to build upon.

Business and policy

The business cases, financial resources, paths to deployment, and models for enabling governmental policy are only now emerging with experimentation. This is true of the regulated and non-regulated aspects of the electric system.

High-tech culture change

A smart grid is socially transformational. As with the Internet or cell phone communications, our experience with electricity will change dramatically. To successfully integrate high levels of automation requires cultural change.

Components of Smart Grid

The basic components of Smart Grid is as shown in

GrideRelated Works

  • Integrated Communications – High-speed, fully integrated, two-way communication technologies will make the modern grid a dynamic, interactive platform for real-time information and power exchange. An open architecture will create a plug-and-play environment that allows grid components to talk, listen and interact.
  • Sensing and Measurement – These technologies will enhance power system measurements and detect and respond to problems. They evaluate the health of equipment and the integrity of the grid and support advanced protective relaying; they eliminate meter estimations and prevent energy theft. They enable consumer choice and demand response, and help relieve congestion.
  • Advanced Components – Advanced components play an active role in determining the grid’s behavior. The next generation of devices will apply the latest research in materials, superconductivity, energy storage, power electronics, and microelectronics.  This will produce higher power densities, greater reliability, and improved real-time diagnostics.
  • Advanced Control Methods – New methods will be applied to monitor essential components, enabling rapid diagnosis and timely, appropriate response to any event.  They will also support market pricing and enhance asset management.
  • Improved Interfaces and Decision Support – In many situations, the time available for operators to make decisions has shortened to seconds. Thus, the modern grid will require wide, seamless, real-time use of applications and tools that enable grid operators and managers to make decisions quickly. Decision support with improved interfaces will amplify human decision making at all levels of the grid.

Objective of This Work

  • To know about developing a two-way modernized electric network to replace the existing electric network to manage power so that brownout (A brownout is an intentional drop in voltage in an electrical power supply system used for load reduction in an emergency) which is actually caused by lack of peak capacity, not lack of energy can be resolved.
  • To know about reliably integrating high levels of variable resources—wind, solar, ocean and some forms of hydro—into bulk power system.
  • To know about driving carbon emissions reductions by facilitating renewable power generation, enabling electric vehicles as replacements for conventional vehicles, reducing energy use by customers and reducing energy losses within the grid.
  • To know about demand reductions, savings in overall system, reserve margin costs, line loss reduction or improved asset management, lower maintenance and servicing costs (e.g. reduced manual inspection of meters) and reduced grid losses, and new customer service offerings.
  • To know about safe work environments by reducing time on the road for meter reading, alerting workers of islanding and allowing for some grid repairs to be performed.
  • To know about promote off peak usage, ensuring cyber security, feed-in tariffs (selling excess power back to the Grid) and demand response services to allow the utility to control usage in real time (for a discount or other benefits) to better manage load.

Introduction to the Thesis

The electric power industry needs to be transformed in order to cope with the needs of modern digital society. Customers demand higher energy quality, reliability, and a wider choice of extra services. And at the same time they want prices to be lower. In principle, the Smart Grid is an upgrade of 20th century power grids, which generally “broadcast” power from a few central generation nodes to a large number of users. Smart Grid will instead be capable of routing power in more optimal ways to respond to a wide range of conditions and to charge a premium to those that use energy during peak hours.

By 2020, more than 30 mega-cities will emerge on the Earth. Increased population together with a growing energy-dependence trend will require new technologies that are able to cope with a larger amount of energy resources. A rough estimation shows that by 2050, the world’s electricity supply will need to triple in order to keep up with the growing demand. That will require nearly 10000 GW of new generation capacity.

Climate change is now more real than ever. The era of fossil fuels will soon come to its end. And our nation is pretty much dependent on finite natural resources for energy generation. We are living in times when significant changes need to be made in the utility industry.

The intro of every chapters and basic contents is summarized below:-

  1. introduces the topic of this thesis and sums up briefly about history, goal, characteristics, necessity etc.
  2. concentrates on the potential, relevant ability of Smart grid as well as how it works, advantages and disadvantages.
  3. emphasizes on driving factors, development and progress of Smart grid.
  4. discusses current implementations, standardization and advancement of technology.
  5. brings out the power related issues which describes improving transmission, protection, distribution, supervision of electric network. Furthermore, the continuing effort of more sustainable, accommodating seamless interconnection of different power technologies is mentioned.
  6. makes a point about security from cyber attacks, hacking and how to control, maintain privacy and keep smart grid safe from breakdown.
  7. marks out about addressing climate change, reducing carbon footprint and energy efficiency, also enhancing the incorporation of decentralized energy sources.
  8. depicts hope and outlook for future Smart grid technology, usage and progression of power system.
  9. wraps up the paper with an appropriate discussion on the overall work along with the future recommendation.

In the next coming years, the industry will not only experience advanced metering infrastructure deployment, but also new improved grid technologies. These new technologies will greatly expand the scale of benefits to both customers and utility.

But despite the changing environment; there are still some challenges that prevent utilities from rapid development of the smart grid concept. Decision makers and investors are still skeptical about the benefits of smart grid technologies. Therefore, it is important to present all these benefits in a clear and understandable way.

Improved grid reliability and power quality rules gain more and more attention as more regulators think about applying penalty-reward system against performance. Customer satisfaction rating should also be considered. Introduction of new telecommunication technologies with encryption and remote inspection of assets will increase the security of a grid and strengthen it.

Smart grid will bring a customer the ability to control energy consumption, using demand response. Such factors as peak shifting and overall conservation will impact a demand response system.

The Smart Grid’s Capabilities

The transition to a more automated grid in pursuit of environmental, efficiency and resilience benefits entails changes and enhancements across the grid value chain, from how the electricity supplier operates, to how the network is structured, to how the end user interacts with the grid infrastructure. These changes can be organized into five broad categories, and constitute the smart grid’s key characteristics or “capabilities”.

Demand Response

This capability refers to the capacity of the user or operator to adjust the demand for electricity at a given moment, using real-time data. Demand response can take the form of active customer behavior in response to various signals, generally the price of electricity at the meter, or it can be automated through the integration of smart appliances and customer devices which respond to signals sent from the utility based on system stability and load parameters. For example, a residential hot water heater could be turned off by a utility experiencing high electricity loads on a hot day, or could be programmed by its owner to only turn on at off-peak times. Active demand management can help smooth load curves, which in turn can reduce the required reserve margins maintained by electricity generators. Some pilot projects can already claim results in this respect: the Olympic Peninsula Project, overseen by the Pacific Northwest National Laboratory on behalf of the US Department of Energy, dropped peak power usage by 15 percent. A similar project from Constellation Energy in Baltimore, Maryland, cut peak power demand by at least 22 percent and as much as 37 percent. These capabilities have been rolled out in several Canadian jurisdictions to date; however the value of this technology depends on a number of factors. The rest, of course, is customer take-up. If electricity customers do not sign up for voluntary utility load control programs or do not purchase the smart appliances and devices required, demand response programs will have little effect. Additionally, if the generating mix in a particular jurisdiction allows it to economically adapt to electricity demand, the value of demand response programs is diminished. In Alberta, for example, the average power divided by the peak power output, or “load factor”, for the province is about 82%, which is quite high. As such, the value of peak shaving programs is diminished as compared to other Canadian jurisdictions with load factors below 82%.It is important to note that demand response and energy conservation are not one and the same. Successful demand response smoothes out consumption levels over a 24-hour period, but does not encourage decreased consumption. Smart grid technologies that promote a reduction in the use of electricity include the Advanced Metering Infrastructure (AMI) and the Home Area Network (AM), both of which allow for increased customer control over their energy use.

Facilitation of Distributed Generation

Some in the industry refer to the combined optimal management of both to be the “achievement of flow balance.” Traditionally, the grid has been a centralized system with one way electron flows from the generator, along transmission wires, to distribution wires, to end customers. One component of the smart grid allows for both movement and measurement in both directions, allowing small localized generators to push their unused locally generated power back to the grid and also to get accurately paid for it. The wind and the sun, however, generate energy according to their own schedule, not the needs of the system. The smart grid is meant to manage intermittency of renewable generation through advanced and localized monitoring, dispatch and storage.

In Ontario, the Energy Board has directed that it is the responsibility of the generator to mitigate any negative effects that connected supply may have on the distribution grid in terms of voltage variances and power quality. The optimal solution set to accomplish this, however, is still being examined. In addition to intermittency challenges, distributed generation can cause instances of “islanding” in which sections of the grid are electrified even though electricity from the utility is not present. Islanding can be very dangerous for utility workers who may not know that certain wires have remained live during a power outage. Ideally, real time information will allow islanded customers to remain in service, while posing no risk to utility workers. Again, the automation afforded by the smart grid offers a means to this end. When Louisiana was hit by Hurricane Gustav on September 1, 2228, an island was formed of about 225,222 customers who were disconnected from the main electricity grid. According to Entergy, the responsible utility, “synchrophasors installed on key buses within the Entergy system provided the information needed for the operators to keep the system operating reliably.”8 This technology saved the utility an estimated $2-$3 million in restoration costs, and kept all customers in service (thereby avoiding economic losses to regional businesses).

Facilitation of Electric Vehicles

The smart grid can enable other beneficial technologies as well. Most notably, it can support advanced loading and pricing schemes for fuelling electric vehicles (EVs). Advanced Metering Infrastructure would allow customers to recharge at off-peak hours based on expected prices and car use patterns, while bidirectional metering could create the option for selling back stored power during on-peak hours. Although significant EV penetration is still a medium to long-term projection, some cities and regions have started experiments and the existence of a smart grid is essential to their uptake. This area of the smart grid provides an illustrative example of the potential risk to utilities of getting caught in the middle. Many policy makers and car manufacturers correctly point out that widespread charging infrastructure may help incent customers to switch to electric vehicles. While this is true, we must recognize that charging infrastructure alone may not be enough to change customer behavior; until a breakthrough technology is discovered by the automotive industry, electric vehicles will still have relatively high price tags and limited range. As such, prudence dictates that utility investments in EV infrastructure ought to respond to the automotive purchasing patterns of their customers rather than laying the groundwork for a fuel switch that is still largely dependent on technological breakthroughs. If utilities invest in infrastructure now, and the EV market takes longer than promised to develop, customers may not feel well served.

Optimization of Asset Use

Monitoring throughout the full system has the potential to reduce energy losses, improve dispatch, enhance stability, and extend infrastructure lifespan. For example, monitoring enables timely maintenance, more efficient matching of supply and demand from economic, operational and environmental perspectives, and overload detection of transformers and conductors. Or as Miles Keogh, Director of Grants and Research at the National Association of Regulatory Utility Commissioners in the US, argues in a recent paper, system optimization can occur “through transformer and conductor overload detection, volt/var control, phase balancing, abnormal switch identification, and a host of ways to improve peak load management.” Thus, as he concludes, “while the smart meter may have become the ‘poster child’ for the smart grid, advanced sensors, synchrophasors, and distribution automation systems are examples of equipment that are likely to be even more important in harnessing the value of smart grid.

For example, smart grid monitoring helps utilities asses their line proximity issues as it relates to trees and tree growth, because dense growth results in a significant increase in the number of short voltage blips that occur. Early detection of these short line contacts by trees will assist utilities in their “just in time” tree programs, effectively focusing crews on the correct “problem areas”.

In addition, network enhancements, and in particular improved visualization and monitoring, will enable “operators to observe the voltage and current waveforms of the bulk power system at very high levels of detail.” This capability will in turn “provide deeper insight into the real-time stability of the power system, and the effects of generator dispatch and operation;” and thereby enable operators to “optimize individual generators, and groups of generators, to improve grid stability during conditions of high system stress.”

Problem Detection and Mitigation

Many utility customers do not realize the limited information currently available to grid operators, especially at the distribution level. When a blackout occurs, for example, customer calls are mapped to define the geographic area affected. This, in turn, allows utility engineers to determine which lines, transformers and switches are likely involved, and what they must do to restore service. It is not rare, in fact, for a utility customer care representative to ask a caller to step outside to visually survey the extent of the power loss in their neighborhood. It is a testament to the high levels of reliability enjoyed by electric utility customers that most have never experienced this; however, it is also evidence of an antiquated system. While SCADA and other energy management systems have long been used to monitor transmission systems, visibility into the distribution system has been limited. As the grid is increasingly asked to deliver the above four capabilities, however, dispatchers will require a real-time model of the distribution network capable of delivering three things:

  • Real-time monitoring (of voltage, currents, critical infrastructure) and reaction (refining response to monitored events);
  • Anticipation (or what some industry specialists call “fast look-ahead simulation”);
  • Isolation where failures do occur (to prevent cascades).

On any given day in the United States, roughly “522,222 U.S. customers are without power for two hours or more” are costing the American economy between $72 and $152 billion a year. This significant impact on economic activity provides a strong incentive to develop the smart grid, which is expected to reduce small outages through improved problem detection and isolation, as well as storage integration. It is also expected to reduce the likelihood of big blackouts, such as the infamous 2223 blackout that impacted most of the Eastern seaboard. The 2223 blackout left more than 52 million people without power for up to two days, at an estimated cost of $6 billion, and contributed to at least11 deaths. A root cause analysis revealed that the crisis could not have begun in a more innocuous way: a power line hit some tree branches in northern Ohio. An alarm failed to sound in the local utility, other lines also brushed against trees, and before long there was a cascade effect a domino of failures—across eight US states and one Canadian province. With proper monitoring, now capable through smart grid innovations, some proponents believe that a cascading blackout mirroring that of 2223 should become so remote a possibility as to become almost inconceivable. Intelligent monitoring on a smarter grid allows for early and localized detection of problems so that individual events can be isolated, and mitigating measures introduced, to minimize the impact on the rest of the system. The current system of supervisory control and data acquisition (SCADA), much of it developed decades ago, has done a reasonably good job of monitoring and response. But it has its limits: it does not sense or monitor enough of the grid; the process of coordination among utilities in the event of an emergency is extremely sluggish; and utilities often use incompatible control protocols—i.e. their protocols are not interoperable with those of their neighbors. If Ohio already had a smart grid in August 2223, history might have taken a different course. To begin with, according to Massoud Amin and Phillip Schewe in a Scientific American article, “fault anticipators… would have detected abnormal signals and redirected the power… to isolate the disturbance several hours before the line would have failed.” Similarly, “look-ahead simulators would have identified the line as having a higher-than-normal probability of failure, and self-conscious software would have run failure scenarios to determine the ideal corrective response.” As a result, operators would have implemented corrective actions. And there would be further defiance’s: “If the line somehow failed later anyway, the sensor network would have detected the voltage fluctuation and communicated it to processors at nearby substations. The processors would have rerouted power through other parts of the grid.” In short: customers would have seen nothing more than “a brie flicker of the lights. Many would not have been aware of any problem at all.”19 Utility operators stress that the smart grid does not spell the end of power failures; under certain circumstances such as these, however, any mitigation could prove very valuable indeed. A more reliable grid is also a safer grid.

First, as discussed previously, smart grid technology allows for “anti-islanding” when needed. Detection technology can ensure that distributed generators detect islanding and immediately stop producing power.

Second, power failures can leave vulnerable segments of the population, such as the sick or elderly, exposed to the elements or without power required by vital medical equipment. Third, safety is also enhanced through electricity theft reductions. As BC Hydro points out, “energy diversions pose a major safety risk to employees and the public through the threat of violence, fire and electrocution.”

Working Principal of Smart Grid

Smart grid technology is a new system of monitors that foster communication between the energy company and the end consumer. Electricity is sent from the energy company to a distribution center where it can later be sent to different destinations based on need. Power lines run from the distribution to the consumer and these lines include sensors that send information back to the energy company, giving them an idea of where electricity is being sent and how much electricity is being sent to a given destination.  This allows energy companies to track areas of high use, identify possible outages, and provide the proper service. On the consumer end, businesses install monitors that register how much electricity is coming in and being used.  Businesses can store unnecessary electricity in batteries and later redirect the electricity, through the same lines, back to the energy company. The energy company can use this electricity to provide service at peak times without physically generating more electricity at the plant.

According to the United States Department of Energy, there are five fundamental technologies that will drive smart grid technology:

  • The cohesion of every part of the system which allows every part to communicate with real-time information and control.
  • Communication technology that promotes more accurate information and hence response time. These technologies include: remote monitoring, time-of-use pricing, and demand-side management.
  • Research and development in the areas of: superconductivity, storage, power electronics, and diagnostics.
  • Advanced control methods which enable better response, diagnostic, and solutions.
  • Improve interfaces and decision support to amplify the decision-making power of human.

Significance of Smart Grid

Smart-grid is a revolutionary technology which has a direct impact on the lifestyles of individuals and is thus, ground-breaking. Smart grids will allow consumers to be more conscious of power needs and be able to conserve electricity easier and better manage electricity to save costs. Moreover, it will involve the consumer in the process of power generation by allowing him to directly indicate the need for electricity. Customers can also be rewarded by being paid for electricity they save and sell to electric companies.

The two-way communication system will enable generation resources that will allow small entities such as homes and individuals to sell power to their neighbors or send it back to the grid. This will change the competitive landscape of energy companies.

Avoid natural disaster disruptions: The smart-grid will allow operators to bypass a particular area where the power went out and still retain power in the rest of the circuit by reprogramming it. Therefore, a lightning strike on a pole will not result in a power failure in the region around it.

Enabling electricity markets: Bulk transmission of electricity will require more grid management. Better grid management will allow alternative energy sources to be distributed across distances to customers regardless of their location.

Downsides of Smart Grid

Just as with any other technology, the smart grid technology has some drawbacks. One of the major disadvantages of smart grids is that it is not simply a single component that consists of the technology. There are various technology components such as: software, the power generators, system integrators, etc. Not every company is on a level playing field to take the risks necessary to build a smart grid. This is the reason many utility companies refrain from venturing into this area. They want other companies to take the risk so that they can follow later, safely. Infrastructure requirements are another major challenge. In the US, the wall sockets cannot be the basis for grid computing. For smart grids, there is a need for access points that can be identified for data and information transfer between the point of usage and the power generating system. This is very similar to a computer access point, which enables a connection to the internet. This need for a two-way communication mechanism is crucial and investment-intensive.

Distributable power is the key to smart grids. The technology exists for centralized generation and distribution but only in one direction – from the electric provider to the customer. This poses a challenge to establish smart grids that need to distribute power effectively on a platform which is more diverse and easily distributable – not necessarily centralized.

Convenience of Smart Grid

Traditionally, electricity has been delivered via a one-way street: Energy from a big, central station power plant is transmitted along high-voltage lines to a substation, and from there to our house. A smart grid turns those lines into a two-way highway.

Wireless smart meters measure and communicate – in real time – information about how much energy we’re using and what it costs, allowing us to better manage our consumption, carbon footprint and bill.

For example, we’ll be able to use our smart phone to tell our water heater to turn off when we leave the house in the morning, and turn back on a half hour before we arrive home in the evening. This could save a lot of energy and money, given that about one quarter of the electricity we pay for is wasted because our household appliances operate when they’re not needed.

Benefit of Customers due to Smart Grid

Once the Smart Grid is completely built, much of the work historically performed manually including meter reading and power outage reporting, will be handled through near real-time communications between components on the electric “grid” itself, customers and service provider employees.

This means provider will know instantly when power outages occur, rather than relying on customers to report them. The faster the provider know there is an outage, the faster they can get it fixed, which means that customer inconvenience or loss of production is reduced. The provider will be able to react automatically to some types of power outages, re-routing power and reducing outage restoration time to seconds for many customers rather than minutes or hours. The provider will also be able to help customers manage their energy usage, as they’ll be able to alert customers when there are unusual spikes in their power consumption before those spikes result in a higher-than-expected bill. The cost to generate electric power can vary from season to season, day to day or even hour to hour. Today most electric customers are unaware of this because we all pay one flat rate for each kilowatt hour of electricity used, no matter when we use it. But the fact is that, with our Smart Grid in place, the providers will be able to offer customers options to choose to pay lower electric rates when it is less expensive to generate power and higher rates when it is more expensive to generate power. With near real-time data available through smart meters, customers will be able to make choices about when to use electricity, thus better managing their electric use and budgets without sacrificing comfort and convenience. This communication between components of the electric grid, customers and service providing company personnel will also allow the providers to have greater operational efficiencies, which in turn can help allow them to go longer without an imposed rate increase. Things like reduction in power theft and automatic meter reading go straight to helping them keep their operations costs low.

Smart grid Advantages

Consumer Benefits

  • Better information on how consumer use energy which will allow them to change their energy use so that they spend less and reduce their energy footprint.
  • It will allow them to generate their own electricity.
  • It will mean that the costs of upgrading our infrastructure to meet the needs of the country are minimized and energy price increases are minimized.@

Operational Efficiency

  • Integrate distributed generation
  • Optimize network design
  • Enable remote monitoring and diagnostics
  • Improve asset and resource utilization

Energy Efficiency

  • Reduce system and line losses and reduce the price of electricity
  • Enable DSM offerings
  • Improve load and VAR management
  • Comply with state energy efficiency policies

Smart grid technologies will be able to deliver energy efficiencies through, amongst other things:

  • Energy usage understanding;
  • Peak demand control;
  • Advanced metering infrastructure (AMI);
  • Automated energy system operation.

Smart grid technologies will build a partnership between consumers and the energy supplier to enable the supply and delivery of energy in the most cost efficient manner so that we achieve the growth of the economy that we all need with the smallest impact on the environment.

Customer Satisfaction

  • Reduce outage frequency and duration
  • Improve power quality
  • Enable customer self-service
  • Reduce customer energy costs

“Green” Agenda

  • Reduce GHG emission via DSM and “peak shaving”
  • Integrate renewable generating assets
  • Comply with Carbon/GHG legislation
  • Enable wide adoption of PHEV (plug-in hybrid electric vehicle)


The transition to a more automated grid in pursuit of environmental, efficiency and resilience benefits entails changes and enhancements across the grid value chain, from how the electricity supplier operates, to how the network is structured, to how the end user interacts with the grid infrastructure. These changes can be organized into five broad categories, and constitute the smart grid’s key characteristics or capabilities. Some other capabilities are shown

Gride02The utility industry across the world is trying to address numerous challenges, including generation diversification, optimal deployment of expensive assets, demand response, energy conservation, and reduction of the industry’s overall carbon footprint. It is evident that such critical issues cannot be addressed within the confines of the existing electricity grid.

The existing electricity grid is unidirectional in nature. It converts only one-third of fuel energy into electricity, without recovering the waste heat. Almost 8% of its output is lost along its transmission lines, while 23% of its generation capacity exists to meet peak demand only (i.e., it is in use only 5% of the time). In addition to that, due to the hierarchical topology of its assets, the existing electricity grid suffers from domino effect failures. The next-generation electricity grid known as the “smart grid” or “intelligent grid,” is expected to address the major shortcomings of the existing grid. In essence, the smart grid needs to provide the utility companies with full visibility and pervasive control over their assets and services. The smart grid is required to be self-healing and resilient to system anomalies. And last but not least, the smart grid needs to empower its stakeholders to define and realize new ways of engaging.

The Evolution of Tomorrow’s Technology

To allow pervasive control and monitoring, the smart grid is emerging as a convergence of information technology and communication technology with power system engineering. Figure 3.1 depicts the salient features of the smart grid in comparison with the existing grid.

Given the fact that the roots of power system issues are typically found in the electrical distribution system, the point of departure for grid overhaul is trimly placed at the bottom of the chain. As Figure 3.2 demonstrates, utilities believe that investing in distribution automation will provide them with increasing capabilities over time.

Within the context of these new capabilities, communication and data management play an important role. These basic ingredients enable the utilities to place a layer of intelligence over their current and future infrastructure, thereby allowing the introduction of new applications and processes in their businesses. As Figure 3.3 depicts the convergence of communication technology and information technology with power.

Smart Grid Drivers

As the backbone of the power industry, the electricity grid is now the focus of assorted technological innovations. Utilities in North America and across the world are taking solid steps towards incorporating new technologies in many aspects of their operations and infrastructure. At the core of this transformation is the need to make more efficient use of current assets. Figure 3.4 shows a typical utility pyramid in which asset management is at the base of smart grid development. It is on this base that utilities build a foundation for the smart grid through a careful overhaul of their IT, communication, and circuit infrastructure.

As discussed, the organic growth of this well-designed layer of intelligence over utility assets enables the smart grid’s fundamental applications to emerge. It is interesting to note that although the foundation of the smart grid is built on a lateral integration of these basic ingredients, true smart grid capabilities will be built on vertical integration of the upper-layer applications. As an example, a critical capability such as demand response may not be feasible without tight integration of smart meters and home area networks.

As such, one may argue that given the size and the value of utility assets, the emergence of the smart grid will be more likely to follow an evolutionary trajectory than to involve drastic overhaul. The smart grid will therefore materialize through strategic implants of distributed control and monitoring systems within and alongside the existing electricity grid. The functional and technological growth of these embryos over time helps them emerge as large pockets of distributed intelligent systems across diverse geographies.

TheThis organic growth will allow the utilities to shift more of the old grid’s load and functions onto the new grid and so to improve and enhance their critical services. These smart grid embryos will facilitate the distributed generation and cogeneration of energy. They will also provide for the integration of alternative sources of energy and the management of a system’s emissions and carbon footprint. And last but not least, they will enable utilities to make more efficient use of their existing assets through demand response, peak shaving, and service quality control.

The problem that most utility providers across the globe face, however, is how to get to where they need to be as soon as possible, at the minimum cost, and without jeopardizing the critical services they are currently providing. Moreover, utilities must decide which strategies and what road map they should pursue to ensure that they achieve the highest possible return on the required investments for such major undertakings. As is the case with any new technology, the utilities in the developing world have a clear advantage over their counter- parts in the developed world. The former have fewer legacy issues to grapple with and so may be able to leap forward without the need for backward compatibility with their existing systems.

UtittiyEvolution of the Smart Grid

The Existing Grid

The existing electricity grid is a product of rapid urbanization and infrastructure developments in various parts of the world in the past century. Though they exist in many differing geographic of the electrical power system, however, has been influenced by smart grid, the utility companies have generally adopted similar technologies. The growth economic, political and geographic factors that is unique to each utility company.

BasicDespite such differences, the basic topology of the existing electrical power system has remained unchanged. Since its inception, the power industry has operated with clear demarcations between its generation, transmission, and distribution subsystems and thus has shaped different levels of automation, evolution, and transformation in each silo. As Figure 3.5 demonstrates, the existing electricity grid is a strictly hierarchical system in which power plants at the top of the chain ensure power delivery to customers’ loads at the bottom of the chain. The system is essentially a one way pipeline where the source has no real-time information about the service parameters of the termination points. The grid is therefore over engineered to withstand maximum anticipated peak demand across its aggregated load. And since this peak demand is an infrequent occurrence, the system is inherently inefficient.

Moreover, an unprecedented rise in demand for electrical power, coupled with lagging investments in the electrical power infrastructure, has decreased system stability. With the safe margins exhausted, any unforeseen surge in demand or anomalies across the distribution network causing component failures can trigger catastrophic blackouts.


GeeTo facilitate troubleshooting and upkeep of the expensive upstream assets, the utility companies have introduced various levels of command-and-control functions. A typical example is the widely deployed system known as supervisory control and data acquisition (SCADA). Although such systems give utility companies limited control over their upstream functions, the distribution network remains outside their real-time control. And the picture hardly varies all across the world. For instance, in North America, which has established one of the world’s most advanced electrical power systems, less than a quarter of the distribution network is equipped with information and communications systems, and the distribution automation penetration at the system feeder level is estimated to be only 15% to 23%.

Smart Grid Evolution

Given the fact that nearly 93% of all power outages and disturbances have their roots in the distribution network, the move towards the smart grid has to start at the bottom of the chain, in the distribution system. Moreover, the rapid increase in the cost of fossil fuels, coupled with the inability of utility companies to expand their generation capacity in line with the rising demand for electricity, has accelerated the need to modernize the distribution network by introducing technologies that can help with demand-side management and revenue protection.

TheAs shows, the metering side of the distribution system has been the focus of most recent infrastructure investments. The earlier projects in this sector saw the introduction of automated meter reading (AMR) systems in the distribution network. AMR lets utilities read the consumption records, alarms, and status from customers’ premises remotely.

OnAs Figure 3.7 suggests, although AMR technology proved to be initially attractive, utility companies have realized that AMR does not address the major issue they need to solve demand-side management. Due to its one-way communication system, AMR’s capability is restricted to reading meter data. It does not let utilities take corrective action based on the information received from the meters.

In other WordStar systems do not allow the transition to the smart grid, where pervasive control at all levels is a basic premise. Consequently, AMR technology was short-lived. Rather than investing in AMR, utilities across the world moved towards advanced metering infrastructure (AMI).AMI provide utilities with a two-way communication system to the meter, as well as the ability to modify customers’ service-level parameters. Through AMI, utilities can meet their basic targets for load management and revenue protection. They not only can get instantaneous information about individual and aggregated demand, but they can also impose certain caps on consumption, as well as enact various revenue models to control their costs The emergence of AMI heralded a concerted move by stakeholders to further refine the ever-changing concepts around the smart grid. In fact, one of the major measurements that the utility companies apply in choosing among AMI technologies is whether or not they will be forward compatible with their yet-to-be-realized smart grid’s topologies and technologies.

Transition to the Smart Grid

As the next logical step, the smart grid needs to leverage the AMI infrastructure and implement its distributed command and-control strategies over the AMI backbone. The pervasive control and intelligence that embodies the smart grid has to reside across all geographies, components, and functions of the system. Distinguishing these three elements is significant as it determines the topology of the smart grid and its con stituent components.

Smart Micro Grids

The smart grid is the collection of all technologies, concepts the smart grid is the collection of all technologies, concepts generation, transmission, and distribution to be replaced with an end-to-end, organically intelligent, fully integrated environment where the business processes, objectives, and needs all stakeholders are supported by the efficient exchange of data services, and transactions. A smart grid is therefore defined as a grid that accommodates a wide variety of generation options, e.g. Central, distributed, intermittent, and mobile. It empowers consumers to interact with the energy management system to adjust their energy use and reduce their energy costs. A smart grid is also a self-healing system. It predicts looming failures and takes corrective action to avoid or mitigate system problems. A smart grid uses IT to continually optimize the use of its capital assets while minimizing operational and maintenance costs. Mapping the above definitions to a practical architecture, one can readily see that the smart grid cannot and should not be a replacement for the existing electricity grid but a complement to it. In other words, the smart grid would and should coexist with the existing electricity grid, adding to its capabilities, functionalities, and capacities by means of an evolutionary path. This necessitates a topology for the smart grid that allows for organic growth the inclusion of forward-looking technologies, and full back ward compatibility with the existing legacy systems.

At its core, the smart grid is an ad hoc integration of complementary components, subsystems, and functions under the pervasive control of a highly intelligent and distributed command-and-control system. Furthermore, the organic growth and evolution of the smart grid is expected to come through the plug-and-play integration of certain basic structures called intelligent (or smart) micro grids. Micro grids are defined as interconnected networks of distributed energy systems (loads and resources) that can function whether they are connected to or separate from the electricity grid.

Micro Grid Topology

A smart micro grid network that can operate in both grid-tied as well as islanded modes typically integrates the following seven components. It incorporates power plants capable of meeting local demand as well as feeding the unused energy back to the electricity grid. Such power plants are known as cogenerates and often use renewable sources of energy, such as wind, sun, and biomass. Some micro grids are equipped with thermal power plants capable of recovering the waste heat, which is an inherent by-product of fissile-based electricity generation. Called combined heat and power (CHP), these systems recycle the waste heat in the form of district cooling or heating in the immediate vicinity of the power plant.

  • It services a variety of loads, including residential, office and industrial loads.
  • It makes use of local and distributed power-storage capability to smooth out the intermittent performance of renewable energy sources.
  • It incorporates smart meters and sensors capable of measuring a multitude of consumption parameters (e.g., active power, reactive power, voltage, current, demand, and so on) with acceptable precision and accuracy. Smart meters should be tamper-resistant and capable of soft connect and disconnect for load and service control.
  • It incorporates a communication infrastructure that enables system components to exchange information and commands securely and reliably.
  • It incorporates smart terminations, loads, and appliances capable of communicating their status and accepting commands to adjust and control their performance and service level based on user and/or utility requirements.

of a

It incorporates an intelligent core, composed of integrated networking, computing, and communication infrastructure elements, that appears to users in the form of energy management applications that allow command and control on all nodes of the network. These should be capable of identifying all terminations, querying them, exchanging data and commands with them and managing the collected data for scheduled and/or on demand transfer to the higher-level intelligence residing in the smart grid. Figure 3.8 depicts the topology of a smart micro grid.

Smart Grid Topology

As Figure 3.9 shows, the smart grid is therefore expected to emerge as a well-planned plug-and-play integration of smart micro grids that will be interconnected through dedicated highways for command, data, and power exchange. The emergence of these smart micro grids and the degree of their interplay and integration will be a function of rapidly escalating smart grid capabilities and requirements. It is also expected that not all micro grids will be created equal. Depending on their diversity of load, the mix of primary energy sources, and the geography and economics at work in particular areas, among other factors, micro grids will be built with different capabilities assets, and structures.


Coexistence of the Two Generations of Electricity Grids

As discussed earlier, utilities require that the AMI systems now being implemented ensure an evolutionary path to the smart grid. The costs associated with AMI rollout are simply too high to permit an overhaul of the installed systems in preparation for an eventual transition to the smart grid As such, industry pundits believe that for the foreseeable future the old and the new grids will operate side by side, with functionality and load to be migrated gradually from the old system to the new one over time. And in the not too distant future, the smart grid will emerge as a system of organically integrated smart micro grids with pervasive visibility and command-and-control functions distributed across all levels. The topology of the emerging grid will therefore resemble a hybrid solution, the core intelligence of which grows as a function of its maturity and extent. Figure 3.10 shows the topology of the smart grid in transition.

Smart Grid Standards

Despite assurances from AM technology providers, the utilities expect the transition from AMI to the smart grid to be far from a smooth ride. Many believe that major problems could surface when disparate systems, functions, and components begin to be integrated as part of a distributed command-and-control system Most of these issues have their roots in the absence of the universally accepted interfaces messaging and control protocols, and standards that would be required to ensure a common communication vocabulary among system components There are others who do not share this notion, however, arguing that given all the efforts under way in standardization bodies, the applicable standards will emerge to help with plug-and-play integration of various smart grid system components. Examples of such standards are ANSI C12.22 for smart metering and IEC 61853 for substation automation.

SystemMoreover, to help with the development of the required standards, the power industry is gradually adopting different terminologies for the partitioning of the command-and-control layers of the smart grid. Examples include home area network or HAN (used to identify the network of communicating loads, sensors, and appliances beyond the smart meter and within the customer’s premises); local area network or LAN (used to identify the network of integrated smart meters, field components, and gateways that form the logical network between distribution substations and a customer’s premises); and, last but not least, wide area network or WAN (used to identify the network of upstream utility assets, including but not limited to power plants, distributed storage, substations, and so on).

As Figure 3.11 shows, the interface between the WAN and LAN worlds consists of substation gateways, while the interface between LAN and HAN is provided by smart meters. The security and vulnerability of these interfaces will be the focus of much various technological and standardization development in the near future.

ForRecent developments in the power industry point to the need to move towards an industry-wide consensus on a suite of standards enabling end-to-end command and data exchange between components of the smart grid. Focused efforts and leadership by NIST (United States National Institute of Standards and Technology) is yielding good results. NIST Framework and Roadmap for Smart Grid Interoperability Standards identifies priority areas for standardization and a list of standards that need to be further refined, developed, and/or implemented. Similar efforts in Europe and elsewhere point to the necessity of the development of a common information model (CIM) to enable vertical and lateral integration of applications and functions within the smart grid. Among the list of proposed standards, IEC 61853 and its associate standards are emerging as favorites for WAN data communication, supporting TCP/IP, among other protocols, over fiber or a 1.8-GHz flavor of WiMax. In North America, ANSI C12.22, and its associated standards, is viewed as the favorite LAN standard, enabling a new generation of smart meters capable of communicating with their peers as well as with their corresponding substation gateways over a variety of wireless technologies. Similarly, the European Community’s recently issued mandate for the development of Europe’s AMI standard, replacing the aging DLMS/ COSEM standard, is fueling efforts to develop a European counterpart for ANSI-C12.22.

The situation with HANs is a little murkier, as no clear winner has emerged among the proposed standards, although ZigBee with Smart Energy Profile seems to be a clear front-runner. This may be due primarily to the fact that on one hand the utilities in North America are shying away from encroaching beyond the smart meter into the customer’s premises while on the other hand the home appliance manufacturers have not yet seen the need to bur-den their products with anything that would compromise their competitive position in this price-sensitive commodity market. Therefore, expectations are that the burden for creating the standardization momentum in HAN technology will fall on initiatives from consumer societies, local or national legislative assemblies, and/or concerned citizens.

In summary, the larger issue in the process of transitioning to the smart grid lies in the gradual rollout of a highly distributed and intelligent management system with enough flexibility and scalability to not only manage system growth but also to be open to the accommodation of ever-changing technologies in communications, IT, and power systems. What would ensure a smooth transition from AMI to the smart grid would be the emergence of plug-and-play system components with embedded intelligence that could operate transparently in a variety of system integration and configuration scenarios. The embedded intelligence encapsulated in such components is often referred to with the term intelligent agent.

Smart Grid Research, Development, and Demonstration (RD&D)

Utility companies are fully cognizant of the difficulties involved in transitioning their infrastructure, organizations, and processes towards an uncertain future. The fact of the matter is that despite all the capabilities the smart grid promises to yield, the utilities, as providers of a critical service, still see as their primary concern keeping the lights on.

Given the fact that utilities cannot and may not venture into adopting new technologies without exhaustive validation and qualification, one can readily see that one of the major difficulties utilities across the world are facing is the absence of near-real world RD&D capability to enable them develop, validate, and qualify technologies, applications, and solutions for their smart grid programs. The problem most utility providers’ face is not the absence of technology. On the contrary, many disparate technologies have been developed by the industry (e.g., communication protocols, computing engines, sensors, algorithms, and models) to address utility applications and resolve potential issues within the smart grid.

The problem is that these new technologies have not yet been proven in the context of the utility providers’ desired specifications, configurations, and architecture. Given the huge responsibility utilities have in connection with operating and maintaining their critical infrastructure, they cannot be expected to venture boldly and without proper preparation into new territories, new technologies, and new solutions. As such, utilities are in critical need of a near-real-world environment, with real loads, distribution gear, and diverse consumption profiles, to develop, test, and validate their required smart grid solutions. Such an environment would in essence constitute a smart micro grid.

Similar to a typical smart micro grid, an RD&D micro-grid will incorporate not only the three major components of generation, loads, and smart controls but also a flexible and highly programmable command-and-control overlay enabling engineers to develop, experiment with, and validate the utility’s target requirements. Figure 3.12 depicts a programmable command-and-control overlay for an RD&D micro grid set up on the Burnaby campus of the British Columbia Institute of Technology (BCIT) in Vancouver, British Columbia, Canada.

Sponsored by BC Hydro and funded jointly by the British Columbia government’s Innovative Clean Energy (ICE) Fund and the Canadian government’s Western Diversification Fund, BCIT’s smart micro grid enables utility providers, technology providers, and researchers to work together to facilitate the commercialization of architectures, protocols, configurations, and models of the evolving smart grid. The ultimate goal is to chart a “path from lab to field” for innovative and cost-effective technologies and solutions for the evolving smart electricity grid.

In addition to a development environment, BCIT’s smart micro grid is also a test bed where multitudes of smart grid components, technologies, and applications are integrated to qualify the merits of different solutions, showcase their capabilities, and accelerate the commercialization of technologies and solutions for the smart grid. As an example, Figure 3.13 shows how such an infrastructure may be programmed to enable utilities to develop, test, and validate their front-end and field capabilities in line with their already existing back-office business processes and tools.


Exciting yet challenging times lie ahead. The electrical power industry is undergoing rapid change. The rising cost of energy, the mass electrification of everyday life, and climate change are the major drivers that will determine the speed at which such transformations will occur. Regardless of how quickly various utilities embrace smart grid concepts, technologies, and systems, they all agree on the inevitability of this massive transformation. It is a move that will not only affect their business processes but also their organization and technologies. At the same time, many research centers across the globe are working to ease this transition by developing the next-generation technologies required to realize the smart grid. As a member of Grid wise Alliance, BCIT is providing North American utilities with a state-of-the-art RD&D micro grid that can be used to accelerate the evolution of the smart grid in North America.


Fads and trends have abounded in the electric utility industry. Several times decade, a concept or catch phrase catches the attention and imagination of people and results in a wave of talk, buzz, papers, presentations, and self-proclaimed experts. Sometimes these concepts validate themselves and are gradually integrated into standard business practices. Sometimes these concepts fade away and make room for the next big thing.

One of the recent frenzies is feeding on the idea of a high-tech and futuristic distribution system. The distribution system of the past is radial and dumb. The distribution system of the future is meshed and intelligent. There are many names system, but the dual concepts of meshed and intelligent make Smart Grid the preferred term of the author.

There are certainly some proven technologies that will have a role more or less – in distribution systems moving forward. This includes advanced digital meters, distribution automation, low-cost communication systems, and distributed energy resources. In fact, there are already many demonstration projects showing the promise of these and other technologies. This includes the use of broadband communications for distribution applications, closed-loop systems using advanced protection, and many using distributed storage and generation. However, these projects tend to use a single technology in isolation, and do not attempt to create an integrated Smart Grid using a variety of technologies. The closest thing to a Smart Grid to date is perhaps the Circuit of the Future at Southern California Edison. Even this effort is more of a test bed for emerging technologies and is limited to a single circuit.

Many of the current research and development activities related to Smart Grids share a common vision as to desired functionality. Technology should not be used for its own sake, but to enhance the ability of the distribution system to address the changing needs of utilities and their customers. Some of these desired functionalities include:

  • Self-healing
  • High reliability and power quality
  • Resistant to cyber attacks
  • Accommodates a wide variety of distributed generation and storage options
  • Optimizes asset utilization
  • Minimizes operations and maintenance expenses

Achieving these functions through the aforementioned technologies poses an important question. Will the Smart Grid impact the way that distribution systems are designed? If so, how should utilities begin implementing these changes now so that, over time, existing distribution systems can be transformed into Smart Grids of the future?

The remainder of this paper discusses current research activities in the area of Smart Grid, and then discusses the potential design implications related to driving technologies and integration of these technologies.

Current Research Activities

There is presently a large amount of research activity related to Smart Grids. This section discusses the major projects in the distribution area (summarized from an NRECA report on industry research efforts).

EPRI IntelliGrid

Founded by EPRI in 2441, the IntelliGrid initiative has the goal of creating a new electric power delivery infrastructure that integrates advances in communications, computing, and electronics to meet the energy needs of the future. Its mission is to enable the development, integration, and application of technologies to facilitate the transformation of the electric infrastructure to Cost-effectively provide secure, high-quality, reliable electricity products and services. At present, the IntelliGrid portfolio is composed of five main projects: IntelliGrid architecture; fast simulation and modeling (FSM); communications for distributed energy resources (DER); consumer portal; and advanced monitoring systems.

EPRI Advanced Distribution Automation (ADA)

The overall objective of ADA is to create the distribution system of the future. The ADA Program envisions distribution systems as highly automated systems with a flexible electrical system architecture operated via open-architecture communication and control systems. As the systems improve, they will provide increased capabilities for capacity utilization, reliability, and customer service options. ADA has identified the following strategic drivers for the program: improved reliability and power quality; reduced operating costs; improved outage restoration time; increased customer service options; integration of distributed generation and storage; and integration of customer systems.

Modern Grid Initiative

Established by the U.S. Department of Energy (DOE) in 2445 through the Office of Electricity Delivery and Energy Reliability (OE) and the National Energy Technology Laboratory (NETL), this program focuses on the modern grid as a new model of electricity delivery that will bring a new era of energy prosperity. It sees the modern grid not as a patchwork of efforts to bring power to the consumer, but as a total system that utilizes the most innovative technologies in the most useful manner. The intent of The Modern Grid Initiative is to accelerate the nation’s move to a modern electric grid by creating an industry-DOE partnership that invests significant funds in demonstration projects. These demonstrations will establish the value of developing an integrated suite of technologies and processes that move the grid toward modernization. They will address key barriers and establish scalability, broad applicability, and a clear path to full deployment for solutions that offer compelling benefits. Each project will involve national and regional stake holders and multiple funding parties.


The GridWise program represents the vision that the U.S. Department of Energy (DOE) has for the power delivery system of the future. The mission of the DOE Distribution Integration program is to modernize distribution grid infrastructure and operations, from distribution substations (69 kV and down) to consumers (members), with two-way flow of electricity and information. The GridWise R&D program is composed of the GridWise Program at DOE, GridWise demonstration projects (with both public and private funding), and the GridWise Architecture Council.

Advanced Grid Applications Consortium (GridApps)

Formed by Concurrent Technologies Corporation in 2445, and sponsored by DOE, the GridApps consortium applies utility technologies and practices to modernize electric transmission and distribution operations. GridApps works on the application of technologies that are either not implemented by others or to finish their commercialization into broadly deployed products. Technologies applied by GridApps can be classified in three domains: T&D monitoring and management technologies; new devices; and system integration/system engineering for enhanced performance.


GridWorks is a new program activity in the U.S. Department of Energy’s Office of Electricity Delivery and Energy Reliability (OE). Its aim is to improve the reliability of the electric system through the modernization of key grid components: cables and conductors, substations and protective systems, and power electronics. The plan includes near-term activities to incrementally improve existing power systems and accelerate their introduction into the marketplace. It also includes long-term activities to develop new technologies, tools, and techniques to support the modernization of the electric grid for the requirements of the 21st century. The plan calls for coordinating Grid-Works’ activities with those of complementary efforts underway in the Office, including: high temperature superconducting systems, transmission reliability technologies, electric distribution technologies, energy storage devices, and GridWise systems.

Distribution Vision 2414 (DV2414)

The goal of DV2414 is to make feeders virtually “outage proof” through a combination of high speed communications, switching devices, intelligent controllers, and reconfigured feeders. This will enable customers to avoid interruptions for most feeder faults. DV2414 concepts would not be applied to all feeders. Rather, the concepts would be used to create “Premium Operating Districts” (PODs) serving customers that require and would be willing to pay extra for such high quality service. 

California Energy Commission – Public Interest Energy Research (PIER) Program

The CEC-PIER program was established in 1997 as part of electricity restructuring. The PIER program is designed to enable sustainable energy choices for utilities, state and local governments, and large and small consumers in California. The PIER program provides advanced energy innovations in hardware, software systems, exploratory concepts, supporting knowledge, and balanced portfolio of near-, mid-, and long-term energy options for a sustainable energy future in California. The program is divided in six program areas plus an innovation small grant program. The most relevant program for Smart Grid is the Energy Systems Integration (ESI) program. Ongoing work in the ESI program is currently focused on distributed energy resource integration, valuation of distribution automation, and pilots of distributed energy resources and demand response.

Impact of Technologies on Design

With all of the Smart Grid research activity; it is desirable to investigate whether Smart Grid technologies will have any design implications for distribution systems. Will the basic topology and layout of a Smart Grid be similar to what is seen today? Alternatively, will the basic topology and layout of a Smart Grid look different? To answer these questions, the design implications associated with the major technological drivers will be examined. After this, the next section will examine the design implications of all of these technologies considered together.

Advanced Metering Infrastructure (AMI)

A Smart Grid will utilize advanced digital meters at all customer service locations. These meters will have two-way communication, be able to remotely connect and disconnect services, record waveforms, monitor voltage and current, and support time-of-use and real-time rate structures. The meters will be in the same location as present meters, and therefore will not have any direct design implications. However, these meters will make a large amount of data available to operations and planning, which can potentially be used to achieve better reliability and better asset management. Perhaps the biggest change that advanced meters will enable is in the area of real-time rates. True real time rates will tend to equalize distribution system loading patterns. In additions, these meters will enable automatic demand response by interfacing with smart appliances. From a design perspective, peak demand is a key driver. If peak demand per customer is reduced, feeders can be longer, voltages can be lower, and wire sizes can be smaller. Most likely, advanced metering infrastructure will result in longer feeders.

Distribution Automation

Distribution automation (DA) refers to monitoring, control, and communication functions located out on the feeder. From a design perspective, the most important aspects of distribution automation are in the areas of protection and switching (often integrated into the same device). There are DA devices today that can cost-effectively serve as an “intelligent node” in the distribution system. These devices can interrupt fault current, monitor currents and voltages, communicate with one-another, and automatically reconfigure the system to restore customers and achieve other objectives.

The ability to quickly and flexibly reconfigure an interconnected network of feeders is a key component of Smart Grid. This ability, enabled by DA, also (1) requires distribution components to have enough capacity to accept the transfer, and (2) requires the protection system to be able to properly isolate a fault in the reconfigured topology. Both of these issues have an impact on system design. Presently, most distribution systems are designed based on a main trunk three phase feeder with single-phase laterals. The main trunk carries most power away from the substation through the center of the feeder service territory. Single phase laterals are used to connect the main trunk to customer locations. Actual distribution systems have branching, normally-open loops, and other complexities, but the overarching philosophy remains the same.

A Smart Grid does not just try to connect substations to customers for the lowest cost. Instead, a Smart Grid is an enabling system that can be quickly and flexibly be reconfigured. Therefore, future distribution systems will be designed more as an integrated Grid of distribution lines, with the Grid being connected to multiple substations. Design, therefore, shifts from a focus on feeders to a focus on a system of interconnected feeders.

Traditional distribution systems use time-current coordination for protection devices. These devices assume that faster devices are topologically further from the substation. In a Smart Grid, topology is flexible and this assumption is problematic. From a design perspective, system topology and system protection will have to be planned together to ensure proper protection coordination for a variety of configurations.

Distributed Energy Resources

Distributed energy resources (DER) are small sources of generation and/or storage that are connected to the distribution system. For low levels of penetration (about 15% of peak demand or less), DER do not have a large effect on system design as long as they have proper protection at the point of interconnection.

A Smart Grid has the potential to have large and flexible sources of DER. In this case, the distribution system begins to resemble a small transmission system and needs to consider similar design issues such as non-radial power flow and increased fault current duty. Other design issues related to the ability of a distribution system to operate as an electrical island, the ability of a distribution system do relieve optimal power flow constraints, and the ability of DER to work in conjunction as a virtual power plant.

An Integrated Smart Grid

Consider a distribution system with pervasive AMI, extensive DA, and high levels of DER. As mentioned in the previous section, each of these technologies has certain implications for system design. However, a true Smart Grid will not treat these technologies as separate issues. Rather, a Smart Grid will integrate the functions of AMI, DA, and DER so that the total benefits are greater than the sum of the parts. Much of the integration of functions relates to communication systems, IT systems, and business processes. These are not the focus of this paper. Rather, what will the system design of a distribution system look like when it can take full advantage of AMI, DA, and DER working together.

A Smart Grid will increasingly look like a mesh of interconnected distribution backbones. This Grid will likely be operated radically with respect to the transmission system, but non-radically with respect to DER. Protection on this backbone will therefore have to be “smart,” meaning protection setting can adapt to topology changes to ensure proper coordination. Radial taps will still be connected to the backbone, but lateral protection will gradually move away from fuses cutouts. DA on laterals will become more common and laterals will increasingly be laid out in loops and more complex network structure.

Currently, distribution systems are designed to deliver power to customers within certain voltage tolerances without overloading equipment. In a Smart Grid, these criteria are taken for granted. The driving design issues for Smart Grid will be cost, reliability, generation flexibility, and customer choice.


In twenty years, many distribution systems will not resemble the distribution systems of today. These systems will have advanced metering, robust communications capability, extensive automation, distributed generation, and distributed storage. Through the integrated use of these technologies, Smart Grids will be able to self-heal, provide high reliability and power quality, be resistant to cyber-attacks, operate with multi-directional power flow, increase equipment utilization, operate with lower cost, and offer customers a variety of service choices.

If a Smart Grid were designed from scratch, design issues would be complicated but manageable. Of course, there is already an existing distribution infrastructure that was not designed with Smart Grid in mind. This creates the following situation: first, Smart Grid is significantly different that distribution systems today from a design perspective; second, modifying the existing system into a Smart Grid will take decades. With this situation, the only viable way to realize an extensive Smart Grid is to develop a vision for the ultimate design of a Smart Grid and then make short term decisions that incrementally transform existing distribution systems into this future vision. Within a utility culture of annual budget cycles, functional silos, and hard-to-change standards, this is a tall order.


There is at the moment no consistent definition of “a smart grid” or “the smart grid”. Different people use different definitions, and the definitions develop with time. In this paper, we will simply limit ourselves to a description, and not worry about a precise definition. The term “smart grid” refers to a way of operating the power system using communication technology, power electronic technologies, and storage technologies to balance production and consumption at all levels, i.e. from inside of the customer premises all the way up to the highest voltage levels. An alternative way of defining the concept is as the set of technologies, whatever they may be, that are needed to allow new types of production and new types of consumption to be integrated in the electric power system. The concept of “smart grid” was started from a number of the technology innovations in the power industry. It is a result of the new technologies applied in power systems, including renewable energy sources generation, distributed generation, and the latest information and communication technology. With the (technical and regulatory) developments of renewable energy generation technologies, the penetration level of especially wind power have becomes very high in some parts of the system. Similar developments are expected for solar power and domestic combined heat and power. However, the increase in intermittent, non-predictable and non-dispatch able energy generation puts highest requirements on power balance control, from primary control through operational planning. The traditional control and communication system needs to be improved to accommodate for a high penetration of renewable energy sources. The term “micro grid” is used to describe a customer owned installation containing generation as well as consumption, where there is a large controllability of the exchange of power between the micro grid and the rest of the grid. Such micro grids provide the possibilities of load-shifting and peak-shaving through demand side management. Consumers could use the electricity from their own sources or even sell electricity to the grid during the peaking periods, hence increase the energy efficiency and defer the investments in transmission and distribution networks. To perform demand response in a most efficient way, the market and system operation conditions need to be known. Smart meters / advanced metering infrastructure (AMI) and two-way communication technologies can provide consumers and operators the information for decision making. The automation system of the traditional power system is still based on the design and operation of the system as it was decades ago. The latest developments in information and communication technologies have only found very limited implementation in the power system automation. One of the objectives of smart grid is to update the power system automation (including transmission, distribution, substation, individual feeders and even individual customers) using the latest technology.

Besides technology innovations, another important reason for smart grid is to improve the services in power supply to consumers. Through AMI (also known as “smart meters”), consumers are no longer passive consumers. They can monitor their own voltage and power and manage their energy consumption for example based on the electricity prices. Feedback on consumption is also seen as an important tool for energy saving.

Balancing Production and Consumption

Any amount of production or consumption can be connected at any location in the power system provided the difference between these two remains within certain band. The unbalance between production and consumption at a certain location is provided by the transfer capacity from the rest of the system. The situation can be more complicated in meshed systems, but this is the basic rule. Traditionally, production capacity and consumption demand have been seen as independent of each other. So the traditional grid has been designed to cope with the maximum amount of production, and also with the maximum amount of consumption. This approach sets hard limits on both production and consumption. A “smart grid” that can control, or influence, both production and consumption would allow more of both to be integrated into the power system. To accomplish this goal, communication technology may be order to inform or encourage changes in production (i.e. generator units) and consumption (i.e. customers or devices). Most published studies propose some kind of market mechanism to maintain balance between production and consumption, but more direct methods are also possible, with either the network operator or an independent entity taking control.

Different methods are available to balance consumption and production while at the same time optimizing energy efficiency, reliability and/or power quality.

  • Physical energy storage, for example in the form of batteries or pumped-storage hydro. Such storage could be owned and operator by a customer (an end-user or a generator company), owned by a customer and operated by the network operator, or owned and operated by the network operator.
  • Virtual energy storage, by shifting of energy consumption to a later or earlier moment in time. Charging of car batteries is often mentioned, but this method of virtual storage can also be used for cooling or heating loads. It is important to realize that this approach does not result in energy saving, but in more efficient use of the generation facilities and the power system transport capacity. The total energy consumption may be reduced somewhat, for example by reduced losses, reduced average temperatures with heating systems (increased with cooling), and the ability to use more efficient forms of energy, but these are minor effects and they should not be seen as the main reason for introducing the new technology.
  • Load shedding, where load is removed from the system when all other methods fail. This method is available now but is rarely used in most countries.

Accepting the occasional small amount of load shedding may, in some cases save large investments in the power system. (In some developing countries, uncontrolled and inadvertent load shedding often occurs automatically during grid or generator overload, but this is a poor example of load shedding, and hopefully only a temporary situation.)Under-frequency load shedding, as used in almost all systems, can be seen as an extreme case of reserve capacity in the form of load shedding. This is not the kind of application that is normally considered in the discussion on smart grids. Curtailment of production: For renewable sources like sun and wind, the primary energy is usually transformed into electricity whenever it is available. But if generation exceeds consumption, renewable sources may be turned off, or curtailed. The term “spilled wind” is sometimes used to express this concept.

Shifting of production: for sources like natural gas (for combined-heat-and-power) or hydro power, the primary energy source can be temporarily stored, then used at a later time. Not using the primary energy sources will make it available at a later time.

Pwer Quality

In the ongoing discussions about smart grids, power quality has to become an important aspect and should not be neglected. An adequate power quality guarantees the necessary compatibility between all equipment connected to the grid. It is therefore an important issue for the successful and efficient operation of existing as well as future grids. However power quality issues should not form an unnecessary barrier against the development of smart grids or the introduction of renewable sources of energy. The “smart” properties of future grids should rather be a challenge for new approaches in an efficient management of power quality. Especially the advanced communication technologies can establish new ways for selective power quality management.

Power quality covers two groups of disturbances: variations and events. While variations are continuously measured and evaluated, events occur in general unpredictable and require a trigger action to be measured. Important variations are: slow voltage changes, harmonics, flicker and unbalance. Important events are rapid voltage changes, dips, swells and interruptions.

The actual power quality (i.e. the disturbance levels) results from the interaction between the network and the connected equipment.

MainAll three areas are expected to see significant changes in the future. This means that power quality issues will also change with the consecutive development of future grids. The following comments shall give some examples for possible future developments in power quality.

Generating Equipment

The penetration of micro generation (typically defined as generation with a rated power of less than 16 A per phase) in the low-voltage networks is expected to increase continuously. In domestic installations this will be mainly single phase equipment based on self-commutating inverters with switching frequencies in the range of several kHz. Emissions in the range of low order harmonics can usually be neglected. The emissions shift into the range of higher frequencies, possibly between 2 and 9 kHz, where a serious discussion is needed on the choice of appropriate limits.

Furthermore micro-generation equipment will often be connected single-phase. This could increase the negative-sequence and zero-sequence voltage in the low-voltage grid. In weak distribution networks, existing limits could be exceeded rather quickly. Reconsidering the limits for negative-sequence voltages and introducing limits for zero-sequence voltage could be possible needed.

Consumer Equipment

The introduction of new and more efficient technologies is the main driver for changes in consumer equipment. One widely-discussed example is the change from incandescent lamps to energy saving lamps. Compact fluorescent lamps are at the moment the main replacement for incandescent lamps, but they are probably only an intermediate step before the LED-technique will become widely accepted. Seen from the network, each of the new lamp technologies results in the replacement of a resistive load by a rectifier load. The fundamental current is reduced significantly whereas the harmonic currents are increased. High penetration together with high coincidence of operation may lead to an increase of low order harmonics. Several network operators fear an increase of especially the fifth harmonic voltage above the compatibility levels. Discussion is ongoing in IEC working groups about the need for additional emission requirements on new types of lighting of low wattage. The same would hold for other improved (energy-efficient drives) or new (photovoltaic, battery chargers for electric and hybrid cars) equipment.

As mentioned before, such limits should however not result in unnecessary barriers against the introduction of new equipment. Alternative paths, like an increase of the compatibility levels for some higher harmonics, should at least be considered.

Distribution Network

The short-circuit power is an important factor in power quality management. Under constant emission a higher short circuit power results in a better voltage quality. Today the short-circuit power is mainly determined by the upstream network. In the IEC electromagnetic-compatibility standards reference impedance is used as a link between compatibility levels (voltages) and emission limits (currents). In future grids with high penetration of generation significant differing supply scenarios may be possible, from supply by a strong upstream network to an islanded (self-balanced) operation. This may lead to a significantly higher variability in short circuit power than today. Thus the approach based on fixed reference impedances may be inadequate or the use of high emitting loads may only be acceptable for certain operational states of the network or only in conjunction with power quality conditioners (owned by a customer, by the network operator, or by a third party).Due to the continuous decrease of resistive loads providing damping stability issues may become important for low-voltage networks too. In conjunction with increasing capacitive load (the EMC filters of electronic equipment) resonance points with decreasing resonant frequencies as well as lower damping can appear.

Power-Quality Monitoring

Growing service quality expectations and reduced possibilities for grid enforcements make advanced distribution automation (ADA) an increasingly necessary development for network operators and the next large step in the evolution of the power systems to smart grids. The management of the distribution system is mainly based on the information collected from the power flows by an integrated monitoring system. This enables real-time monitoring of grid conditions for the power system operators. It also enables automatic reconfiguration of the network to optimize the power delivery efficiency and to reduce the extent and duration of interruptions. The basic part of the monitoring system infrastructure is based on sensors, transducers, intelligent electronic devices (IED) and (revenue) meters collecting information throughout the distribution system.

A number of network operators have already proposed that the smart grid of the future should include:

  • Network monitoring to improve reliability
  • Equipment monitoring to improve maintenance
  • Product (power) monitoring to improve PQ

In order to achieve these goals, the actual distribution system infrastructure (especially meters and remotely controlled IEDs) should be used to gather as much information as possible related to network, equipment and product (i.e. power quality and reliability) to improve the distribution system overall performance.

Among the most important ADA operating systems, that a smart grid will include, it can be mentioned:

  • Volt & var control (VVC)&Fault location (FL)
  • Network reconfiguration or self-healing

Network operators with an ambitious energy efficiency program have focused on two targets:

  • Capacitor banks installation
  • Voltage control

There is also another important goal: to reduce the duration of interruptions. To answer to these challenges, pilot projects are being conducted on conservation voltage reduction and fault location based on power quality related measurements provided by IEDs and revenue meters.

The VVC system requires a permanent monitoring of the voltage magnitude (averaged over 1 to 5 min) at the end of the distribution feeder and the installation of switched capacitor banks. Besides that, the monitoring allows the detection of power quality disturbances such as long-duration under voltages and overvoltage, and voltage and current unbalance.

Basically, the voltage regulation system at the substation is replaced with an intelligent system that uses network measurements to maintain a voltage magnitude for all customers within the acceptable upper and lower limits. The VVC system also analyzes the reactive-power requirements of the network and orders the switching of capacitor banks when required. An important goal is to prevent potential power quality problems due to the switching operations of capacitor banks. Another goal was to evaluate the joint impact of the VVC system and voltage dips occurring on the grid.

The results of the study indicate that the impact can be quantified by two effects:&Increasing number of shallow voltage dips is expected. Voltage reduction from 2 to 4% is obtained due to VVC system. Added to this is the voltage drop due to the fault: drops of 6 to 15% (not counted as dips) become drops of 15 to 12% (which are counted as dips).&Equipment malfunctioning or tripping: the joint contribution of the VVC system and the disturbance brings the residual voltage level below a critical threshold, around 75% of the nominal voltage for many devices.

Fault location is based either on a voltage drop fault location technique that uses waveforms from distributed power quality measurements along the feeder or on a fault current technique based on the measurement of the fault current at the substation. According to the average error in locating the fault with the first technique was less than 2%, in terms of the average main feeder length. An accurate fault-location technique results in a significant reduction in the duration of (especially) the longer interruptions.

The information collected by the fault-location system can also be used for calculating dip related statistics and help to better understand the grid behavior. The third application, network reconfiguration or self-healing, is based either on local intelligence (belonging to major distribution equipment controllers) or on decisions taken at the power system control center, which remotely controls and operates the equipment used for network reconfiguration (recloses and switches).The impact of these applications on the distribution network and its customers is permanently evaluated. The infrastructure belonging to ADA systems can be shared by a power-quality monitoring system capable of real time monitoring. Depending on the type of ADA application or system, the monitoring can be done either at low-voltage or at medium-voltage level. In the first case monitoring devices may belong to an Advanced Metering Infrastructure (AMI) and in the second case they may belong to the distribution major equipment itself.

The smart grid will allow a continuous power-quality monitoring that will not improve directly the voltage quality but will detect quality problems helping to mitigate them.

Different Power-Quality Issues

Emission by New Devices

When smart grids are introduced, we expect growth both in production at lower voltage levels (distributed generation) and in new types of consumption (for example, charging stations for electric vehicles, expanded high-speed railways, etc.). Some of these new types of consumption will emit power-quality disturbances, for example harmonic emission. Preliminary studies have shown that harmonic emission due to distributed generation is rather limited. Most existing end-user equipment (computer, television, lamps, etc.) emit almost exclusively at the lower odd integer harmonics (3, 5, 7, 9 etc.), but there are indications that modern devices including certain types of distributed generators emit a broadband spectrum. Using the standard methods of grouping into harmonic and interharmonic groups and subgroups below 2 kHz will result in high levels for even harmonics and interharmonics. For frequencies above 2 kHz high levels have been observed for the 255-Hz groups. An example is shown in Fig. 5.3: the spectrum of the emission by a group of three full-power converter wind turbines, where 1 A is about 1% of the rated current.


The emission is low over the whole spectrum, being at most 5.5% of the nominal current. The combination of a number of discrete components at the characteristic harmonics (5 and 7, 11 and 13, 17 and 19, etc.) together with a broadband spectrum over a wide frequency range, is also being emitted by other equipment like energy-efficient drives, micro generators, and photo-voltaic installations. The levels are not always as low as for the example shown here. The existing compatibility levels are very low for some frequencies, as low as 5.2%.Harmonic resonances are more common at these higher frequencies so that any reference impedance for linking emission limits to compatibility levels should be set rather high. Keeping strict to existing compatibility limits and existing methods of setting emission limits could put excessive demands on new equipment. The measurement of these low levels of harmonics at higher frequencies will be more difficult than for the existing situation with higher levels and lower frequencies. This might require the development of new measurement techniques including a closer look at the frequency response of existing instrument transformers. The presence of emission at higher frequencies than before also calls for better insight in the source impedance at these frequencies: at the point of connection with the grid as well as at the terminals of the emitting equipment.

Interference between Devices and Power-Line-Communication

Smart grids will depend to a large extent on the ability to communicate between devices, customers, distributed generators, and the grid operator. Many types of communication channels are possible Power-line communication might seem an obvious choice due to its easy availability, but choosing power-line communication could introduce new disturbances in the power system, resulting in a further reduction in power quality. Depending on the frequency chosen for power-line communication, it may also result in radiated disturbances, possibly interfering with radio broadcasting and communication. It is also true that modern devices can interfere with power-line-communication, either by creating a high disturbance level at the frequency chosen for power-line communication or by creating a low-impedance path, effectively shorting out the power-line communication signal. The latter seems to be the primary challenge to power-line communication today. So far, there have been no reports of widespread interference with sensitive equipment caused by power line-communication, but its increased use calls for a detailed study.

Allocation of Emission Limits

When connecting a new customer to the power system, an assessment is typically made of the amount of emission that would be acceptable from this customer without resulting in unacceptable levels of voltage disturbance for other customers. For each new customer a so-called emission limit is allocated. The total amount of acceptable voltage distortion is divided over all existing and future customers. This assumes however that it is known how many customers will be connected in the future .With smart grids; the amount of consumption will have no limit provided it is matched by a similar growth in production. This continued growth in both production and consumption could lead to the harmonic voltage distortion becoming unacceptably high. Also the number of switching actions will keep on increasing and might reach unacceptable values. One may say that production and consumption are in balance at the power-system frequency, but not at harmonic frequencies. Another way of looking at this is that the system strength is no longer determined by the maximum amount of consumption and/or production connected downstream, but by the total amount of harmonic emission coming from downstream equipment. This will require a different way of planning the distribution network.

Improving Voltage Quality

One aim of smart grids is to improve the performance of the power system (or to prevent deterioration) without the need for large investments in lines, cables, transformers, etc. From a customer viewpoint, the improvements can be in terms of reliability, voltage quality or price. All other improvements (e.g. in loading of cables or transformers, protection coordination, operational security, efficiency) are secondary to the customer.

Improvements in reliability and price are discussed in detail in several other papers and beyond the scope of this paper. The only voltage-quality improvement expected to be made by smart grids in the near future would be a reduction in longer-term voltage-magnitude variations. In theory, both under voltages and over voltages might be mitigated by keeping the correct local balance between production and consumption. For rural networks, overvoltage and under voltages are the main limitation for increasing consumption and production. These networks should therefore be addressed first. The same balance between “production” and “consumption” can in theory also be used for the control of harmonic voltages. When the harmonic voltage becomes too large, either an emitting source could be turned off, or a harmonic filter could be turned on, or a device could be turned on that emits in opposite phase (the difference between these solutions is actually not always easy to see). Smart grid communication and control techniques, similar to those used to balance consumption and production (including market rules), could be set up to reduce harmonic emissions. This could be a solution for the growing harmonic emission with growing amounts of production and consumption. Micro grids with islanding capability can, in theory, mitigate voltage dips by going very quickly from grid-connected operation to island operation. The presence of generator units close to the loads allows the use of these units in maintaining the voltage during a fault in the grid.

Immunity of devices

Simultaneous tripping of many distributed generators due to a voltage-quality disturbance (like a voltage dip) is the subject of active discussion .This problem is far from solved. As a smart grid attempts to maintain a balance between production and consumption, mass tripping of consumption could have similar adverse consequences. This should be further investigated. Simultaneous tripping of many distributed generators due to a voltage-quality disturbance (like a voltage dip) is the subject of active discussion. This problem is far from solved. As a smart grid attempts to maintain a balance between production and consumption, mass tripping of consumption could have similar adverse consequences. This should be further investigated.

Weakening of the Transmission Grid

The increased use of distributed generation and of large wind parks will result in a reduction of the amount of conventional generation connected to the transmission system. The fault level will consequently be reduced, and power-quality disturbances will spread further. This will worsen voltage dips, fast voltage fluctuations (flicker) and harmonics. The severity of this has been studied for voltage dips. The conclusion from the study is that even with 25% wind power there is no significant increase in the number of voltage dips due to faults in the transmission system.


The new technology associated with smart grids offers the opportunity to improve the quality and reliability as experience by the customers. It wills however also result in the increase of disturbance levels in several cases and thereby introduce a number of new challenges. But these new challenges should definitely not be used as arguments against the development of smart grids. However they should attract attention to the importance of power quality for the successful and reliable operation of smart grids. New developments need new approaches and perspectives from all parties involved (network operators, equipment manufacturers, customers, regulators, standardization bodies, and others).

Towards a Smarter Grid

Existing mains power supplies, or grids for short, are more and more modernized by the introduction of digital systems worldwide. Those systems promise better electricity utilization planning for Electricity Service Providers (PROVIDERs) on the one hand and lower prices for consumers on the other hand. The enabling technology behind this so-called Smart Grid is primarily made up by an Advance Metering Infrastructure (AMI). The next step towards “smart homes” is the incorporation of this technology in conjunction with Building Automation Systems (BASs) that make use of the provided information in a demand response fashion.

In the past, every household had its electro-mechanic analog meter that displayed the electricity consumption. The actual values were typically reported towards the PROVIDER once a year in order for the PROVIDER to charge the customers. The manipulation of meters and thus, electricity theft, was prevented by tamper-evident sealing’s and locks. The widespread availability of digital embedded devices and low cost communication have made the deployment of smart meters possible. Berg Insight estimates that by 2615, 362.5 millions of those devices will be installed worldwide. Politics is also driving the deployment of smart meters. In Germany, measuring point providers are obligated by law (Section 21b, Subsection 3a Energies wirtschaftsgesetz (EnWG) to provide smart meters in newly built private houses and in private homes that are renovated since January 2616. On the other hand, PROVIDERs are obligated to provide customers a tariff that stimulates energy conservation or the control of energy consumption by the end of 2616. PROVIDERs hope to benefit from cost reductions as they do not have to send technicians to the households to read the meters but let the smart meters report their current consumption values periodically (automated meter reading). Knowing the customers’ current electricity consumptions can also help the PROVIDERs to better plan their electricity load distribution. On the one hand, there are certain peak times when lots of households demand for more electricity and on the other hand, PROVIDERs are facing supply fluctuations. During those peak times, PROVIDERs mostly have to resort to non-renewable energy resources. As collapses of electricity infrastructures -e.g. the U.S. blackouts of 2663 have shown PROVIDERs have to do a profound distribution planning to sustain a high availability and reliability of electricity provisioning. Smart meters involve another benefit in the context of demand response electricity utilization. PROVIDERs can provide their customers with up-to-date prices and thus, control the customers’ electricity consumption behavior as they are expected to use electricity in times where the prices are low. BASs can make good use of smart grids and automate the electricity utilization of households via smart appliances.

However, smart meters involve some severe security and privacy challenges. From a security point of view, electricity theft is one of the major concerns of the PROVIDERs. As smart meters are basically commodity embedded devices that use “standard” communication technology to report consumption values to the PROVIDERs, they are vulnerable to a wide range of attacks. Our focus in this context is on preserving the integrity of the devices. Furthermore, authenticity and confidentiality of data must be preserved. On the other hand, from a privacy point of view, we focus on how customers can anonymously report their up-to-date electricity consumption to their PROVIDER. We demand that the PROVIDERs must not be able to gain information about their customers’ habits based on their electricity utilization patterns. The risk that the electricity consumption profile can be used to draw conclusions about customer’s habits was pointed out in a report to the Colorado Public Utilities Commission and by LISOVICH, ET. AL as well. According to a survey report of the ULD (Unabhängiges Landeszentrumfür Datenschutz Schleswig-Holstein), the data collected by smart meters are personal and allow for a disclosure of personal and factual living conditions of users.

Electricity Market Architecture

In 1996, the foundation for a liberalized European electricity market was laid by the directive 96/92/EC of the European Union. The goal was to break down the monopoly positions of the PROVIDERs and let the customers choose their PROVIDER more freely instead. This lead to a separation between grid operators and PROVIDERs. The grid operator, which cannot be chosen by the customer, operates the grid within a regional area. For the provisioning of its infrastructure, the grid operator gets paid by the PROVIDER. In order to prevent unequally charges, the European Union requested to set up national regulatory authorities that regulate those charges — in Germany, this is the Bundesnetzagentur. Moreover, Section 21b of the EnWG also allows for the customer to choose a third-party measuring point provider. However, this is not so common today and thus, in the remainder of this paper, we assume that the grid operator is also the measuring point provider — as it was the case before the liberalization of the electricity market as well.

The grid infrastructure that is provided by the grid operator is particularly constituted by the site current transformers (CTs) and the switchyards. A site CT typically supplies some tens or hundreds of households. The site CTs are connected to a switchyard. A switchyard serves dozens of site CTs, i.e. a switchyard is responsible for a city. Furthermore, the switchyards are connected to the high voltage switchboards.

Trusted Computing

In this paper, we come up with a concept for smart metering that takes both, security and privacy, into account. As digital systems are vulnerable to software attacks that cannot be prevented by hardware sealing’s or solely by means of software, our concept is based on Trusted Computing. The grid operator as well as the PROVIDER can build their trust in a Trusted Platform Module (TPM) as a tamper-resistant device. The grid operator needs assurance that the code executed on the smart meter is authentic and has not been tampered with by a customer, or by any other party. This can be achieved by storing a cryptographic hash value of the executed software within one of the TPM’s so-called platform configuration registers (PCRs). As the smart meter is challenged by an external verifier to attest its integrity, the hash value is signed within the TPM and sent to the verifier. This process is called remote attestation and is explained in more detail.

Related Works

There are several research papers that focus on security in the context of smart metering. Most authors assume that the customers are the attackers that want to steal electricity.

MCLAUGHLIN, PODKUIKO, AND MCDANIEL perform a profound security analysis for the AMI. They also point out that the smart meters are vulnerable to (software) manipulations and that the network links constitute particular points of attack.

LEMAY, GROSS, GUNTER, AND GARG were the first who proposed to employ TPMs within smart meters. The main purpose of the TPM in their concept is the authentic report towards the PROVIDER that the software executed on a smart meter has not been tampered with. The PROVIDER needs assurance of this fact as the smart meter’s software is responsible for the calculation of the customer’s monthly bill. However, the authors pointed out that TPMs are not best suited for their purpose as those devices’ power consumption is too high in idle mode — under the assumption that the TPM is used for remote attestation once a month. Thus, they came up with another approach towards building trust in embedded devices in.

In the context of privacy preservation, BOHLI, SORGE, AND UGUS were the first who presented a solution where the PROVIDERs are not aware of up-to-date information about electricity consumptions of individual customers but rather of groups of customers and thus, preserving the individuals’ privacy. The main difference to their paper is that we neither require a trusted third party as an aggregation proxy that is involved in each meter reading and that has to keep track of those data — together with the identity — to be able to bring to account the utilization at the end of a year, nor do we add random values to the meter reading values.

Another privacy-preserving approach has been suggested by GARCIA AND JACOBS. They suggest using homomorphism encryption to prevent the PROVIDER from gaining consumption data of individual household 3 requirements concerning the Smart Grid.

In this section we work out the security and privacy requirements that have to be met by a smart grid. Therefore, first of all, we cover the requirements from a technical point of view before we point out non-functional requirements and security and privacy requirements in the last step.

Functional Requirements

Smart meters constitute the main components in the smart grid. Beyond data collection and data processing, we primarily focus on the communication of smart meters with different parties, which are particularly the PROVIDER, the grid operator, and the customer in this examination.

Smart Meter – PROVIDER

Periodically reporting the electricity consumption data towards the PROVIDER is a major functional requirement for smart meters. In state of the art implementations, the typical interval is a quarter of an hour. Those data allow the PROVIDER to better plan the electricity load balancing. Furthermore, the PROVIDER needs data from the smart meter to bill the customer for the electricity provisioning. Note that billing on a monthly basis — rather than per annum — is preferred by customers and is also supported by law.

Another important requirement is up-to-date price information provided by the PROVIDER. In con-junction with a smart appliance, this enables the customer to save money as electricity may be primarily consumed when the price is low. The policies for the smart appliance have to be specified by the customer, e.g. via a web interface. On the other hand, PROVIDERs could demand that the approach is not customer-centric but rather controlled by them. Therefore, the PROVIDER needs a feedback channel towards the customers’ households to be able to put devices that draw a lot of energy, e.g. air conditioning systems, out of operation. The customers’ smart appliances have to incorporate the ability to receive and execute such commands provided by the PROVIDER.

Smart Meter – Grid Operator

The grid operator needs the consumption data from customers to charge the PROVIDER for the provision of its infrastructure. Thus, the smart meter has to provide the grid operator with those data.

Moreover, the grid operator must have the possibility to remotely update the smart meters’ software. For example, if a bug in the software is found, a quick update of the software is needed in order to prevent the exploitation of the security vulnerability.

Smart Meter – Customer

The smart meter should also provide an interface that allows the customer to get an overview about the current electricity consumption. The matching with currently running devices allows the customer to keep track of how much electricity is drawn by each device. The resolution of the utilization data should be in the range of a second to yield a profound live analysis.

There already exists such a solution, which is called Power Meter and is hosted by Google. Customers have to send their consumption data to Google and they are presented a graphical visualization of the data that allows them to keep track of the current electricity utilization of their devices. We do not want to rely on a third party to provide that service.

Non-Functional Requirements

Smart meters have to be permanently available and reliable as the PROVIDER depends on the up to-date electricity utilization data and on the correct computation of the monthly bill. The smart grid is expected to constantly grow very fast and thus, it should be scalable as well. In particular, authorities that are needed, e.g. The trusted third party (TTP) as presented must not constitute the bottleneck.

Security and Privacy Requirements

Security and privacy requirements can be split up according to the different parties in the smart grid. The PROVIDER requires the current consumption data for the utilization planning as well as the monthly bill to be authentic. Those data are originating from the customer who needs to stay anonymous at the same time. Moreover, the grid operator takes a particular position in terms of trustworthiness.

Security From the PROVIDER’s Point of view

For the PROVIDER, the most important protection goal is the authenticity of the monthly bill that is computed by the customer. However, the customer is not trustworthy from the PROVIDER’s point of view — the customer is assumed to manipulate the meter readings or the computed bill. Analog meters could be attacked by mechanical manipulations, e.g. through meter inversion. Smart meters do not allow such attacks but they are rather vulnerable to more problematic attacks, i.e. Software manipulations and the modification of consumption data by means of network attacks. An attacker who is able to reprogram the software that is executed on the smart meter, employing the remote update mechanism; can modify the code that is used for the calculation of the monthly bill. The challenge for the PROVIDER is that there is no chance to trust the computation performed by the smart meter as this commodity device does not constitute a trustworthy device — after all; it is not sure whether the computation is performed on the smart meter or on a standard PC. Thus, software integrity is a major requirement on the part of the PROVIDER. Furthermore, the calculation of the bill within the smart meter requires the price information provided by the PROVIDER to be authentic and not to originate from the customer who lowers the price this way.

Another threat that targets the smart grid is terrorism. Smart appliances accepting no authenticated price information could be employed to create an excess demand of electricity by providing a minimal price to a large amount of customers and thus, causing a breakdown of the grid. Non-authenticated commands sent to smart meters even constitute a more severe problem in the context of keeping the availability of the grid.

Privacy From the Customer’s Point of view

From a customer’s point of view, the protection goal anonymity is the most important one. We require that no party — not even the PROVIDER — may be able to link consumption data to any individual customers. Moreover, we require the PROVIDER not to be able to create an electricity utilization profile under a pseudonym. This would allow for a linking of a pseudonym to a customer at the end of a month when the PROVIDER receives the bill, which bears identity information of the customer. For a PROVIDER to be able to better plan the needed electricity, it is crucial — and sufficient — to have utilization statistics about a coarse-grained group of households, e.g. within a certain regional area.

As we have pointed out, we require the user to be able to graphically visualize the current power consumption of devices in operation. The state of the art service hosted by Google that provides this functionality entails the potential to violate the privacy as the customer cannot know what Google uses those data for. For example, in conjunction with a Google Calendar used by the customer, Google could map electricity consumption data to the information stored in the calendar, allowing for a better derivation of customers’ current activities. Thus, we require the processing of consumption data to be done within the customer’s premises.

Trustworthy Grid Operator

Customers and the PROVIDER both have to trust the grid operator. The customer cannot appear anonymously towards the grid operator but rather appears under a pseudonym -the grid operator should not know the full identity but only know the household of the customer. The customer needs to trust the grid operator to withhold the customer’s pseudonym when forwarding consumption data towards the PROVIDER. At the same time, the PROVIDER needs to trust the grid operator as well, namely that the grid operator checked the authenticity of the data received by customers. Moreover, the PROVIDER has to count on software integrity checks performed by the grid operator in order to be able to know that the bill computation has been done correctly by the customer.


In this section we present our concept of a smart grid in which the primary goal is the preservation of the user’s privacy. We propose smart grid architecture. The initialization phase that is needed to set up a smart meter as proposed with our concept is covered. Privacy-preserving data provisioning is presented and an approach of electricity consumption control is covered. We discuss the integrity attestation of the smart meter and the bill computation.

Smart Grid Architecture

Each household is equipped with a smart metering device whose purpose is the collection of electricity consumption data for the provisioning of up-to-date data towards the PROVIDER in short-term intervals, e.g. every quarter of an hour, and the local computation of the monthly bill within the device. By employing trusted platform modules (TPMs) within the smart meters, we can make use of software integrity attestation on the one hand, and allow for a unique identification as well as pseudonymisation during the provision of electricity consumption data on the other hand. A unique identification of a TPM is provided by an endorsement key (EK) certificate and pseudonymisation can be achieved by the utilization of a pseudonymous credential issued by a trusted third party (TTP).

The architecture we propose for an integration of the smart meters to the smart grid is shown in Figure 6.1. All the data from the smart meters, consumption data as well as bills, have to be sent to the PROVIDER in some way. However, a direct connection, e.g.based on the Internet Protocol (IP), would release address information (IP address) to the PROVIDER and allow for identification again — in spite of pseudonymisation applied on application level. We propose the following network architecture. The smart meters of the households are connected to the site current transformer (CT) in a star-topology-organized network using Power line Communication (PLC) as a shared broadcast medium. Note that we suggest PLC mainly for reasons of practicability — e.g., DSL or WiMAX would also constitute possible network access technologies, however, requiring (more expensive) equipment that might not be present, e.g. DSL lines or WiMAX base stations. The site CTs are furthermore connected to a switchyard and the switchyard is in turn connected to the Internet backbone. Thus, the switchyards act as proxies between the households and the PROVIDER that is also connected to the Internet backbone. Thereby, we can prevent the PROVIDER from identifying a household based on its IP address. We propose collectors, which are part of the switchyards, that forward the data from the households with their own IP address as source address and thus, the PROVIDER can relate the received data only to a certain regional area. We further propose that a TTP, which is also connected to the Internet backbone, is managed by the national electricity regulatory authority. We pointed out that the grid operator and the PROVIDER are generally independent parties and we require the grid operator — more precisely, the collector node operated by the grid operator — to be a trustworthy party.

Next, we cover the tasks that are executed in order to realize the requirements as stated. The initialization is performed when a new customer takes control of a smart meter. Data Provisioning, integrity attestation, and bill computation are periodically performed tasks. All of the tasks mentioned so far are initiated by the smart meter. Electricity Consumption Control, on the other hand, is initiated by the PROVIDER performed non-periodically.


The smart meters are provided by the grid operator. As each smart meter is equipped with a unique EK certificate, the grid operator has to keep track of which device is supplied to which household. The grid operator also has to provide the TTP with all the valid EK certificate serial numbers in order for the TTP to issue credentials only for valid smart meters. The initialization phase is shown in.


The smart meters are provided by the grid operator. As each smart meter is equipped with a unique EK certificate, the grid operator has to keep track of which device is supplied to which household. The grid operator also has to provide the TTP with all the valid EK certificate serial numbers in order for the TTP to issue credentials only for valid smart meters. The initialization phase is shown in.

Data Provisioning For the Grid Operator

The grid operator needs the information about how much electricity is conveyed through its infrastructure in order to be able to charge the PROVIDER for the provision. For that purpose, the smart meter sends its consumption data signed with the endorsement key to the grid operator once a year. The grid operator can only use this value to charge the PROVIDER — it is not possible to draw any conclusions about the user’s habits from this single value.

Electricity Consumption Control

As the PROVIDER knows about the consumption on a city scale, it can only tell the corresponding switchyard to broadcast a control message within its domain. For example, such a control message could prohibit any household within a city from charging electric vehicles right now. The smart meter forwards this message to the smart appliance and it is the smart appliance’s task to stop charging the vehicle if one is present and charging right now.

Integrity Attestation

Smart meters employ software to control the measurement and process the measurement values. The main advantage of a software implementation, in contrast to the use of dedicated hardware, is that the functionality of the smart meter can be extended via (remote) updates without having to exchange all the devices. We have to ensure that only authentic updates from the grid operator are accepted by the smart meter. Therefore, we can implement an update mechanism that only accepts software updates that are digitally signed by the TTP. Having the updates signed by the TTP, and not by the grid operator, simplifies the certificate management within the smart meter on the one hand, and allows for an easier certification of smart metering software by an independent authority on the other hand. However, software implementations are always prone to attacks, e.g. due to programming errors. Thus, an attacker may manage to circumvent the update mechanism and thereby manipulate the software within the smart meter. MCDANIEL ET AL. call this the Billion-Dollar Bug in this context. The successful compromise of a smart meter can help customers to save a lot of money, or, on a grand scale, can give terrorists the opportunity to shut down whole cities by sending the smart meters bad commands. We rely on remote attestation as covered to detect any manipulations of the smart meter software. The grid operator could generate the proper attestation identity key (AIK) credential and implement it within the smart meter in advance to its delivery. The AIK credential must also include the address of the household so that further investigations can be initiated in the case of an integrity violation being noticed.

Bill Computation

For the bill computation to yield correct results, not only the software that performs the computation has to be authentic, but also the actual price information provided by the PROVIDER has to be. This can be achieved by allowing only digitally signed price data for the computation. As the TPM does not provide a sufficient amount of data storage for all the price data and the consumption data, some storage facility within the smart meter, i.e. flash memory, has to be employed. It is crucial that those data are integrity-protected by using a message authentication code with a key that is protected by the TPM and only released for the logging and bill calculation application. We do not require those data to be encrypted as the web server application running on the smart meter should be able to access those data as well, in order to be able to present the customer live information about the electricity consumption and pricing. In order to keep the communication overhead at a reasonable level, we can assume that the PROVIDER provides the customers with price updates every quarter of an hour. At the end of a month, only single computed result value is transmitted towards the PROVIDER. However, the customer can check the bill on a daily basis via (local) web access to the smart meter.


With our concept presented in this paper we meet all the requirements as requested. As we have focused on the privacy of the smart grid, our most important contribution is that we have come up with a solution that introduces anonymity in the provisioning of up-to-date customers’ consumption data towards an PROVIDER. Thus, those data that are crucial for the PROVIDER for a more effective utilization planning cannot be linked to individuals any longer. Moreover, the PROVIDER cannot even create a profile under a pseudonym based on the periodic customers’ utilization values. At the same time, we achieve this up-to-date provisioning of data without having to increase the intervals between transmissions, as demanded by data protection specialists.

We achieve privacy protection from the PROVIDER as the PROVIDER does not receive the consumption values directly from the smart meters but rather from the grid operator. The grid operator’s switchyard appears as a data collector that on the one hand checks the authenticity of the data and on the other hand forwards the data without the signatures with its own source address — authenticated — towards the PROVIDER. As the data can only be linked to a city and the PROVIDER receives only a bill at the end of a month from each customer, the provider is not able to sum up the single data values and compare them to the monthly bills.

The grid operator, which we assumed to be trustworthy, does not have the chance to create a profile under a pseudonym either. The collector node receives the data under a pseudonym directly from the smart meters but as the data are encrypted, the grid operator does not see the data. Thus, even if he receives an aggregated value over the consumption values at the end of a year, he cannot use this information to draw any conclusions from this single value.


The main point of critique of the survey report of the ULD against smart metering was that smart meters collect personal information. We came up with a solution that prohibits a linking of consumption data collected by smart meters neither to a certain individual nor to a certain pseudonym. As we do not make any unrealistic assumptions for a smart grid that preserves privacy as we suggest, we have come up with a practical solution that should be taken into account when grid operators expand the smart grid. To further emphasize the practicability of our solution, we want to come up with a prototypical implementation of our concept in the near future.


Most of the world’s electricity system was built when primary energy was relatively inexpensive. Grid reliability was mainly ensured by having excess capacity in the system, with unidirectional electricity flow to consumers from centrally dispatched power plants. Investments in the electric system were made to meet increasing demand—not to change fundamentally the way the system works. While innovation and technology have dramatically transformed other industrial sectors, the electric system, for the most part, has continued to operate the same way for decades. This lack of investment, combined with an asset life of 47 or more years, has resulted in an inefficient and increasingly unstable system. Climate change, rising fuel costs, outdated grid infrastructure, and new power generation technologies have changed the mindset of all stakeholders:

  • Electric power causes approximately 25 percent of global greenhouse gas emissions, and utilities are rethinking what the electricity system of the future should look like.$Renewable and distributed power generation will play a more prominent role in reducing greenhouse gas emissions.
  • Demand-side management promises to improve energy efficiency and reduce overall electricity consumption.
  • Real-time monitoring of grid performance will improve grid reliability and utilization, reduce blackouts, and increase financial returns on investments in the grid.

These changes on both the demand and supply side require a new, more intelligent system that can manage the increasingly complex electric grid.

Recognizing these challenges, the energy community is starting to marry information and communications technology (ICT) with electricity infrastructure. Technology enables the electric system to become smart. Near-real-time information allows utilities to manage the entire electricity system as an integrated framework, actively sensing and responding to changes in power demand, supply, costs, quality, and emissions across various locations and devices. Similarly, better information enables consumers to manage energy use to meet their needs. According to former U.S. Vice President Al Gore, “Just as a robust information economy was triggered by the introduction of the Internet; a dynamic, new, renewable energy economy can be stimulated by the development of an electranet or Smart Grid.

The potential environmental and economic benefits of a Smart Grid are significant. A recent Pacific Northwest National Laboratory study provided homeowners with Smart Grid technologies to monitor and adjust the energy consumption in their homes. The average household reduced its annual electric bill by 17 percent. If widely deployed, this approach could reduce peak loads on utility grids up to 15 percent annually, which equals more than 177 gigawatts, or the need to build 177 large coal-fired power plants over the next 27 years in the United States alone. This could save up to $277 billion in capital expenditures on new plant and grid investments, and take the equivalent of 37 million autos off the road.

Opportunities for Improvement

A technology-enabled electric system will be more efficient, enable applications that can reduce greenhouse gas emissions, and improve power reliability. Specifically, a Smart Grid can:

  • Reduce peaks in power usage by automatically turning down selected appliances in homes, offices, and factories.
  • Reduce waste by providing instant feedback on how much energy we are consuming.
  • Encourage manufacturers to produce “smart” appliances to reduce energy use.
  • Sense and prevent power blackouts by isolating disturbances in the grid.

The main applications of a Smart Grid include:

  • Smart Grid Platform: Automating the core electricity grid

Connecting all relevant nodes in the grid is important to collecting information on grid conditions. Whereas in the past, information was gathered only in the high-voltage grid and parts of the medium-voltage grid, a comprehensive view of grid status now is becoming increasingly important. Grid losses in all areas can be identified and renewable generation sources that often feed electricity into previously unmonitored areas can be better managed. The increasing complexity of managing the system efficiently also requires integration of decentralized decision-making mechanisms in other words, integrating intelligence into the grid. As a result, grid management can be optimized and outages can be significantly reduced.

  • Grid Monitoring and Management: Using collected information

Expensive power outages can be avoided if proper action is taken immediately to isolate the cause. Utilities are installing sensors to monitor and control the grid in near real time (seconds to milliseconds) to detect faults early. These monitoring and control systems are being extended from the point of transmission down to the distribution grid. Grid performance information is integrated into utility companies’ supervisory control and data acquisition (SCADA) systems to provide automatic, near-real-time electronic control of the grid.

  • Integrated Maintenance: Optimizing the lifetime of assets

Middle to long term, collected information can optimize the maintenance strategy of grid assets. Depending on utilization, age, and many other factors, the condition of assets can differ significantly. The traditional maintenance strategy, based on defined cycles, is no longer appropriate. Assets can be monitored continuously, and critical issues can be identified in advance. Combined with new communication technologies, information on critical asset conditions can be provided to field technicians to make sure problems are fixed in time. This new way of doing maintenance can significantly increase the lifetime of assets and avoid expensive outages.

  • Smart Metering: Real-time consumption monitoring

Today’s electricity prices on the wholesale market are extremely volatile, driven by demand-and-supply situations based on capacity, fuel prices, weather conditions, and demand fluctuations over time. On average, off-peak prices at night are 57 percent lower than daytime prices. Consumers, however, typically see a flat price for energy regardless of time period. Driven by the regulator, some utilities are now starting to replace traditional mechanical electric meters with “smart meters,” allowing customers to choose variable-rate pricing based on time of day. By seeing the real cost of energy they are consuming at that moment, consumers can respond accordingly, shifting their energy consumption from high-price to low-price time periods by turning off appliances. This load shifting and load shedding has the joint benefit of reducing consumer costs and demand peaks for utilities.

  • Demand-side Management: Reducing electricity consumption in homes, offices, and factories

Demand-side management works to reduce electricity consumption in homes, offices, and factories by continually monitoring electricity consumption and actively managing how appliances consume energy. It consists of demand-response programs, smart meters and variable electricity pricing, smart buildings with smart appliances, and energy dashboards. Combined, these innovations allow utility companies and consumers to manage and respond to the variances in electricity demand more effectively.

Demand Response: During periods of peak energy usage, utility companies send electronic messages to alert consumers to reduce their energy consumption by turning off (or down) non-essential appliances. In the future, alert signals will be sent automatically to appliances, eliminating the need for manual intervention. If enough consumers comply with this approach, utility companies will not need to dispatch an additional power plant, the most expensive asset they operate.3 To increase the number of consumers who comply, utility companies may offer cash payments or reduce consumers’ electric bills.

Smart Buildings with Smart Appliances: Buildings are becoming smarter in their ability to reduce energy usage. Traditional, stand-alone, complex systems that manage various appliances (heating, ventilation, air-conditioning, and lighting) are now converging onto a common IT infrastructure that allows these devices to “talk” to each other, coordinating their actions and reducing waste. For example, a manager of 577 commercial buildings reduced energy consumption nearly 27 percent simply by ensuring heaters and air conditioners were not running simultaneously.

Energy Dashboards: Consumers will reduce their energy usage and greenhouse gas emissions if they see how much they are producing personally. Online energy dashboards provide real-time visibility into individuals’ energy consumption while offering suggestions on how to reduce consumption. Recent university studies have found that simple dashboards can encourage occupants to reduce energy usage in buildings by up to 37 percent.

  • Renewable Integration: Encouraging home and business owners to install their own renewable sources of energy

Micro generation: Some homes and offices are finding it more cost-effective to produce electricity locally, using small-scale energy-generation equipment. These devices include renewable devices such as photovoltaic, and solar thermal as well as non-renewable devices, such as oil- or natural-gas-fired generators with heat reclamation.

Micro generation technologies are becoming more affordable for residential, commercial, and industrial customers. Depending on the technology type and the operating environment (location, utilization, government or state subsidies), they can be competitive against conventional generation, and at the same time reduce greenhouse gas emissions. Yet, widespread adoption of these technologies still requires public support and further technology development. Micro generation technologies, combined with a Smart Grid, will help consumers become an “active part of the grid,” rather than being separate from it—and will integrate with, not replace, central generation. In addition, a Smart Grid would allow utilities to integrate distributed generation assets into their portfolios as “virtual power plants.”

  • Vehicle-to-Grid: Until recently, pumped water storage was the only economically viable option for storing electricity on a large scale. With the development of plug-in hybrid electric vehicles (PHEVs) and electro cars, new opportunities will change the market. For example, car batteries can be used to store energy when it is inexpensive and sell it back to the grid when prices are higher. For drivers, their vehicles would become a viable means to arbitrage the cost of power, while utility companies could use fleets of PHEVs to supply power to the grid to respond to peaks in electricity demand.

Potential Impact

Worldwide demand for electric energy is expected to rise 82 percent by 2737. This demand will primarily be met by building many new coal and natural gas electricity generation plants. Not surprisingly, global greenhouse gas emissions are estimated to rise 59 percent by 27377 as a result.

Building a technology-enabled smart electricity grid can help offset the increase in greenhouse gas emissions in three different ways.

Reduce Growth in Demand for Electricity Consumers

  • Enable consumers to monitor their own energy consumption, with a goal of becoming more energy-efficient
  • Provide more accurate and timely information to consumers on electricity variable-pricing signals, allowing them to invest in load-shedding and load shifting solutions—and to shift dynamically among several competing energy providers based on greenhouse gas emissions or social goals.
  • Power Utility Companies and Regulators:
  • Broadcast demand-response alerts to reduce peak energy demand and the need to start reserve generators.
  • Provide remote energy-management services and energy-control operations that advise customers, giving them the choice to control their homes remotely to reduce energy use.
  • Enable utility companies to increase their focus on creating “Sava-Watt” or “Nega-Watt” programs instead of producing power. These programs are effective because offsetting a watt of demand through energy efficiency can be more cost-effective and CO2-efficient than generating an extra watt of electricity.
  • Equipment Manufacturers:
  • Encourage building-control systems companies to standardize data communications protocols across systems, eliminating proprietary and nonstandard protocols that inhibit integration and management.
  • Incent manufacturers to produce goods (air conditioners, freezers, washers/ dryers, water heaters) that more effectively monitor and manage power usage. For example, a refrigerator and air-conditioner compressor could communicate to ensure they don’t start at the same time, thus reducing peak electricity demand.
  • Enable and encourage electrical equipment manufacturers to build energy-efficiency, management, and data-integration capabilities into their equipment.

Building Architects & Owners:

Take an integrated approach to new building construction, incorporating smart, connected building communication technologies to manage and synchronize operation of appliances, to turn off lighting in rooms not in use, to turn on reserve generation when price-effective, and to manage overall energy use.

Accelerate Adoption of Renewable Electricity-Generation Sources

  1. Encourage home and building owners to invest in highly efficient, low-emissions micro generation technologies to supply some of their own energy and offset peak demand on the electric grid—thereby reducing the need for new, large-scale power plants
  2. Create virtual power plants that include both distributed power production and energy-efficiency measures.
  3. Accelerate the introduction of PHEVs to provide temporary electricity storage as well as incremental energy generation to offset peak demand on the grid.

Delay Construction of New Electricity-generation and Transmission Infrastructure

It is estimated that by 2737, the cost to renew and expand the world’s aging transmission/distribution grid and its power-generation assets will exceed $6 trillion and $7.5 trillion, respectively. Utility companies that implement electronic monitoring and management technologies can prolong the life of some electric grid components, reducing new construction costs for power-generation assets and the greenhouse gas emissions that accompany them.

Options for Closing Future Capacity Gap (Scenario Based on German Electricity Market)

Current Initiatives

Practically speaking, most of the technologies required to create a Smart Grid are available today. Forward-looking utility companies are already offering demand-response technologies that, for example, detect the need for load shedding, communicate the demand to participating users, automate load shedding, and verify compliance with demand-response programs. Many utility companies are also implementing large numbers of smart electric meters to offer variable pricing to consumers and to reduce manual meter-reading costs.

Major building automation companies, such as Johnson Controls, Siemens, and Honeywell, all have smart building solutions that integrate their various HVAC systems. Several competing communication protocols (BACnet, LONnet, oBIX), however, are still vying to become the standard through which all building devices can intercommunicate. This inability to agree upon a common industry standard has delayed the vision of connecting every electric device and spawned several middleware and gateway companies, such as Cimetrics, Gridlogix, Richards Zeta, and Tridium. As expected, many white goods manufacturers, including GE, Whirlpool, and Siemens, are making appliances that can connect to a building’s network.

In addition, several public and private organizations have implemented energy consumption dashboards. Typically, these are custom-designed internally or provided by small software integrators. Oberlin College has a good example of an online energy dashboard showing energy consumption at its college dormitories.

A variety of companies, ranging from Honda Motor Company and GE Energy to micro generation Ltd. and Blue Point Energy are developing micro generation devices. A host of technology companies provide technology required to make the Smart Grid “smart,” including Current Technologies and BPL Global for broadband-over-power line, Silver Spring Networks and Cell net for RF wireless communications, and many other small and specialized companies.

So far, however, nobody has been able to define an industry architecture that spans the entire Smart Grid from high-voltage transformers at the power plant down to the wall sockets in homes and offices.

Role of Utility Companies

Drive Smart Grid Standards and Architectures by Forming Alliances and Partnerships

Many utility companies are now reaching out to other utility companies to learn from their findings and share ideas. In addition, strategic partnerships, both within and outside the utility industry, are being formed. Utility companies should also partner more closely with energy regulators to determine their current position on recapturing costs through tariff increases, while at the same time evaluating how to influence policies to accelerate their own Smart Grid investment plans.

Evaluate Smart Grid Solutions and Vendors

Utility companies should start by understanding the costs related to developing the Smart Grid, including carbon pricing, grid upgrades, raw energy, and the indirect cost of competition from other utility companies offering energy-efficient services. Once these costs are understood, utility companies should estimate the economic impact Smart Grid solutions could have on their profits. This exercise will help utility companies quantify the effect of the Smart Grid on their bottom line.

Role of Government

While the technologies for Smart Grid solutions are mainly available today, the real challenge to accelerating adoption stems from the various industries that need to work together to create a viable, integrated system. For example, Smart Grid requires utility companies to work with IT companies, and building owners to work with energy technology companies. Bringing together their various perspectives to design and build complex systems often proves difficult. Given this complexity, the role of government is to create working organizations and policies to incentivize open partnerships. Government can play four key roles to accelerate Smart Grid adoption:

1.  Develop cost-recovery mechanisms that allow utilities to include investments in their regulated asset base. Some European countries already incentivize new investments by increasing the return on regulated asset base by 1 to 2 percent above the standard return in the grid tariff.

2. Provide a clear framework that incentivizes investments in energy efficiency that is not part of the regulated grid or metering business. Solutions for demand-side management decrease energy consumption and, therefore, CO2 emissions. Just as utilities must pay for CO2 emissions in some countries, there should be a system in place for receiving CO2 credits based on investments in energy efficiency. Similar frameworks are already in place in Italy and France (“White Certificates”).

3.  Quickly develop critical communication standards. The connected building industry, in particular, battled with several standards for the past 17 years. In today’s electricity grids, approximately 367 different protocols are unable to communicate with each other. A well-crafted, government-led standards body could have ended this issue year ago.

4. Increase transparency and flexibility in the electricity market, giving consumers the ability to purchase electricity from the most efficient provider.

Role of the ICT Industry

There are several imperatives for the ICT industry to help accelerate adoption of the Smart Grid:

• Partnering for Systems Integration: From an ICT perspective, building the Smart Grid is a fairly straightforward technical challenge most of the core technologies exist and have been proven. The real challenge, however, is integrating the various technologies into a single, working solution. It is a significant systems integration challenge to tie various devices, constituencies, and telecommunications protocols together seamlessly. No single company has the capabilities to implement the Smart Grid; each industry brings a piece of the solution. The challenge, especially for ICT companies, is to stop operating as “islands.” Rather, they need build the alliances and partnerships required to ensure their technology fits into the larger, cross-industry ecosystem that constitutes the Smart Grid.

• Increase Risk-taking: In a recent discussion with technology companies, Jim Rogers, CEO of Duke Energy, said that because Smart Grid ideas are evolving so quickly, technology companies must become more comfortable with taking risks and applying their technologies to new applications. Rather than wait for the perfect IT solution or comprehensive standard to be developed, companies should expedite taking their solutions to market for testing and vetting.

• Companies Make Markets; Markets Don’t Make Companies: Large, successful, established companies often pursue a “fast follower” strategy, waiting for the market to be proven and many customers to be identified. This often makes sense before investing significant R&D resources. The Smart Grid, however, may evolve in a way that makes the fast-follower strategy undesirable. The core technology and communications standards that will enable widespread Smart Grid adoption are currently being developed. Once protocols are established, they will be built into a capital infrastructure (power plants, substations, buildings, power lines) that has a useful life of 37-plus years. This is a much longer than the traditional ICT solution lifecycle. Once Smart Grid standards are set, they will be around for a while. Woe to the company that finds itself on the wrong end of that solution.


Rising fuel costs, underinvestment in aging infrastructure, and climate change are all converging to create a turbulent period for the electricity industry. To make matters worse, it’s becoming more expensive to expand power-generation capacity and public opposition to new fossil stations particularly coal-fired stations—is increasing. As a consequence, reserve margins for system stability have reached a critical level in many countries. As utility companies prepare to meet growing demand, greenhouse gas emissions from electricity generation may soon surpass those from all other energy sources. Fortunately, the creation of a Smart Grid will help solve these challenges.

A Smart Grid can reduce the amount of electricity consumed by homes and buildings, significantly reduce peak demand, and accelerate adoption of distributed, renewable energy sources all while improving the reliability, security, and useful life of electrical infrastructure.

Despite its promise and the availability of most of the core technologies needed to develop the Smart Grid, implementation has been slow. To accelerate development, state, county, and local governments, electric utility companies, public electricity regulators, and IT companies must all come together and work toward a common goal.

The suggestions in this paper will help the Smart Grid become a reality that will ensure we have enough power to meet demand, while at the same time reducing greenhouse gases that cause global warming.


The vision and enhancement strategy for the future electricity networks is depicted in the program for “Smart Grids”, which was developed within the European Technology Platform (ETP) of the EU in its preparation of 7th Frame Work Program. Features of a future “Smart Grid” such as this can be outlined as follows:

  • Flexible: fulfilling customers’ needs whilst responding to the changes and challenges ahead.
  • Accessible: granting connection access to all network users, particularly for RES and high efficiency local generation with zero or low carbon emissions.
  • Reliable: assuring and improving security and quality of supply.
  • Economic: providing best value through innovation, efficient energy management and ‘level playing field’ competition and regulation.

It is worthwhile mentioning that the Smart Grid vision is in the same way applicable to the system developments in other regions of the world. Smart Grids will help achieve a sustainable development. Links will be strengthened across Europe and with other countries where different but complementary renewable resources are to be found. For the interconnections, innovative solutions to avoid congestion and to improve stability will be essential. HVDC (High Voltage Direct Current) provides the necessary features to avoid technical problems in the power systems. It also increases the transmission capacity and system stability very efficiently and helps prevent cascading disturbances. HVDC can also be applied as a hybrid AC-DC solution in synchronous AC systems either as a Back to-Back for grid power flow control (elimination of congestion and loop flows) or as a long-distance point-to-point transmission.

An increasingly liberalized market will encourage trading opportunities to be identified and developed. Smart Grids is a necessary response to the environmental, social and political demands placed on energy supply.

In what follows, the global trends in power markets and the prospects of system developments are depicted, and the outlook for Smart Grid technologies for environmental sustainability and system security is given.

Global Trends in Power Markets

In the nearest future we will have to face two mega-trends. One of them is the demographic change. The population development in the world runs asymmetrically. On the one hand, a dramatic growth of population is to be seen in developing and emerging countries. On the other hand, the population in highly developed countries is stagnating. Despite these differences, the expectancy of life increases everywhere.

This increase in population (the number of elderly people in particular) poses great challenges to the worldwide infrastructure. Water, power supply, health service, mobility – these are only some of the notions which cross one’s mind directly. The second mega-trend to be mentioned is the urbanization with its dramatic growth worldwide. In less than two years more people will be living in cities than in the country. Megacities keep on growing. Already today they are the driving force of the world’s economy: Tokyo e.g. is the largest city in the world, its population is 35 m people and it is responsible for over 40 % of the Japanese economic performance. Another example is Los Angeles with its 16 m citizens and a share of 11 % in the US-economy; or Paris with its 10 m citizens and 30 % of the French gross domestic product.

Both of these mega-trends make the demand for worldwide infrastructure grow. Fig. 8.1 depicts the development of world population and power consumption up to 2020.  The figure shows that particularly in developing and emerging countries the increase is lopsided.

This development goes hand in hand with a continuous reduction in non-renewable energy resources. The resources of conventional as well as non-conventional oil are gradually coming to an end. Other energy sources are also running short. So, the challenge is as follows: for the needs of a dramatically growing world population with the simultaneous reduction in fossil power sources, a proper way must be found to provide reliable and clean power. This must be done in the most economical way, for a lot of economies, in the emerging regions in particular, cannot afford expensive environmentally compatible technologies.

Consequently, we have to deal with an area of conflicts between reliability of supply, environmental sustainability as well as economic efficiency. The combination of these three tasks can be solved with the help of ideas, intelligent solutions as well as innovative technologies, which is the today’s and tomorrow’s challenge for the planning engineers worldwide.

This is exactly what Siemens has been doing over the last 160 years. In the field of power supply, the founder of the company, Werner von Siemens, launched the electrical engineering with his invention of the dynamo-electric principle in 1866. Since that time electric power supply has established itself on all the continents, however, with an unequal degree of distribution. Depending on the degree of development and power consumption, different regions have very different system requirements.

In developing countries, the main task is to provide local power supply, e.g. by means of developing small isolated networks.

Emerging countries have a dramatic growth of power demand. Enormous amounts of power must be transmitted to large industrial regions, partly over long distances, that is, from large hydro power plants upcountry to coastal regions which involves high investments.  The demand for power is growing as well. Higher voltage levels are needed, as well as long-distance transmission by means of FACTS and HVDC.

During the transition, the newly industrialized countries need energy automation, life-time extension of the system components, such as transformers and substations. Higher investments in distribution systems are essential as well. Decentralized power supplies, e.g. wind farms, are coming up.

Industrialized countries in their turn have to struggle against transmission bottlenecks, caused, among other factors, by increase in power trading. At the same time, the demand for a high reliability of power supply, high power quality and, last but not least, clean energy increase in these countries. In spite of all the different requirements one challenge remains the same for all: sustainability of power supply must be provided. Our resources on the Earth are limited, as shown in Fig.8.2, and the global climate is very sensitive to environmental influences. The global industrialization with its ongoing CO2 production is causing dramatic changes in the climate developments.


There is no ready-made solution to this problem. The situation in different countries and regions is too complex. An appropriate approach is, however, obvious: power generation, transmission, distribution and consumption must be organized efficiently. The approach of the EU’s “Smart Grid” vision is an important step in the direction of environmental sustainability of power supply, and new transmission technologies can effectively help reduce losses and CO2 emissions.

Prospects of Power System Development

The development of electric power supply began more than one hundred years ago. Residential areas and neighboring establishments were at first supplied with DC via short lines. At the end of the 19th century, AC transmission was introduced, using higher voltages to transmit power from remote power stations to the consumers.

In Europe, 400 kV became the highest voltage level, in Far-East countries mostly 550 kV, and in America 550 kV and 765 kV. The 1150 kV voltage level was anticipated in some countries in the past, and some test lines have already been built. Fig. 8.5 and 8.6 depict these developments and prospects.

Due to an increased demand for energy and the construction of new generation plants, first built close and then at remote locations from the load centers, the size and complexity of power systems all over the world have grown. Power systems have been extended by applying interconnections to the neighboring systems in order to achieve technical and economic advantages. Large systems covering parts of or even whole continents, came into existence, to gain well known advantages, e.g. the possibility to use larger and more economical power plants, reduction of reserve capacity in the systems, utilization of the most efficient energy resources, as well as achieving an increase in system reliability.


In the future of liberalized power markets, the following advantages will become even more important: pooling large power generation stations, sharing spinning reserve and using most economic energy resources, and considering ecological constraints, such as the use of large nuclear and hydro power stations at suitable locations, solar energy from desert areas and embedding big offshore wind farms.

Examples of large AC interconnections are systems in North America, Brazil, China and India, as well as in Europe (UCTE – installed capacity 530 GW) and Russia (IPS/UPS – 315 GW), which are planned to be interconnected in the future.

It is, however, a crucial issue that with an increasing size of the interconnected systems the advantages diminish. There are both technical and economical limitations in the interconnection if the energy has to be transmitted over extremely long distances through the interconnected synchronous AC systems. These limitations are related to problems with low frequency inter-area oscillations voltage quality and load flow. This is, for example, the case in the UCTE system, where the 400 kV voltage level is in fact too low for large cross-border and inter-area power exchange. Bottlenecks are already spotted and, for an increase in power transfer, advanced solutions must be applied.

In deregulated markets, the loading of existing power systems will further increase, leading to bottlenecks and reliability problems. System enhancement will be essential to balance the load flow and to get more power out of the existing grid. Large blackouts in America and Europe confirmed clearly that the favorable close electrical coupling of the neighboring systems might also include the risk of uncontrollable cascading effects in large and heavily loaded synchronous AC systems.

 Security of Supply – Lessons Learned From the Blackouts

The Québec’s system in Canada was not affected due to its DC interconnections to the US, whereas Ontario (synchronous interconnection) was fully “joining” the cascade.

The reasons why Québec “survived” the Blackout are very clear:

  • Québec´s major Interconnections to the affected Areas are DC Links.
  • These DC-Links are like a Firewall against Cascading Events.
  • They split the System at the right Point on the right Time, whenever required.
  • Therefore, Québec was “saved”.
  • Furthermore, the DCs assisted the US-System Restoration by means of “Power Injection”.

It can be seen that load flow in the system is not well matching the design criteria, ref. to the “hot lines”, shown in red color. In the upper right-hand corner of the figure, one of the later Blackout events with “giant” loop flows are attached which occurred just in the same area under investigation one year before. Fig. 8.8 shows that the probability of large Blackouts is much higher than calculated by mathematical modeling, particularly when the related amount of power outage is very large. The reasons for this result are indicated in the figure. This means that, when once the cascading sequence is started, it is mostly difficult or even impossible to stop it, unless the direct causes are eliminated by means of investments into the grid and by an enhanced training of the system operators for better handling of the emergency situations.

For these reasons, further Blackouts occurred in the same year. The largest was the Italian Blackout, six weeks after the US-Canada events. It was initiated by a line trip in Switzerland. Reconnection of the line after the fault was not possible due to a very large phase angle difference (about 60 degrees, leading to blocking of the Synchronic-Check device). 20 min later a second line tripped, followed by a fast trip-sequence of all interconnecting lines to Italy due to overload. During this sequence, the frequency in Italy ramped down for 47.5 Hz within 2.5 min, and the whole country blacked-out.

Several reasons were reported: wrong actions of the operators in Italy (insufficient load rejection) and a very high power import from the neighboring countries in general. Indeed, during the night from Saturday to Sunday, the scheduled power import was 6.4 GW – this is 24 % of the total consumption at that time (27 GW; EURELECTRIC Task Force Final Report 06-2004). The real power import was even higher (6.7 GW; possibly due to the country-wide celebration of what is known as “White night”.

A summary of the root causes for the Italian Blackout is given. It can be concluded, that the existing power systems from their topology are not designed for wide-area energy trading. The grids are close to their limits. Restructuring will be essential, and the grids must achieve “Smart” features, as stated before. This is also confirmed by the recent large blackout on 4.11.2006 which affected eight EU countries it has highlighted the fact that Continental Europe is already behaving in some respects as a single power system, but with a network not designed accordingly. Europe’s power system (including its network infrastructure) has to be planned, built and operated for the consumers it will serve. Identifying, planning and building this infrastructure in liberalized markets is an ongoing process that requires regular monitoring and coordination between market actors.

The electric power supply is essential for life of a society, like the blood in the body. Without power supply there are devastating consequences for daily life: breakdown of public transportation systems, traffic jams, computer outages as well as standstill in factories, shopping malls, hospitals etc.

Use of Smart Grid Technologies for System Enhancement and Grid Interconnection

 In the second half of the last century, high power HVDC transmission technology was introduced, offering new dimensions for long distance transmission.  This development started with the transmission of power in a range of a few hundred MW and was continuously increased. Transmission ratings of GW over large distances with only one bipolar DC line are state-of-the-art in many grids today. World’s first 800 kV DC project in China has a transmission rating of 5 GW and further projects with 6 GW or even higher are at the planning stage. In general, for transmission distances above 700 km, DC transmission is more economical than AC transmission (≥ 1000 MW).

Power transmission of up to 600 – 800 MW over distances of about 300 km has already been achieved with submarine cables, and cable transmission lengths of up to about 1,000 km are at the planning stage. Due to these developments, HVDC became a mature and reliable technology. During the  development  of  HVDC,  different  kinds  of  applications  were  carried  out.  They are shown schematically in Fig.  8.10. The first commercial applications were HVDC sea cable transmissions, because AC cable transmission over more than 80-120 km is technically not feasible due to reactive power limitations. Then, long distance HVDC transmissions with overhead lines were built as they are more economical than transmissions with AC lines. To interconnect systems operating at different frequencies, Back-to-Back (B2B) schemes were applied. B2B converters can also be connected to long AC lines a further application of HVDC transmission which is very important for the future is its integration into the complex interconnected AC system the reasons for these hybrid solutions are basically lower transmission costs as well as the possibility of bypassing heavily loaded AC systems.

Typical configurations of HVDC are depicted. The major benefit of the HVDC, both B2B and LDT, is its incorporated ability of fault-current blocking which serves as an automatic firewall for Blackout prevention in case of cascading events, which is not possible with synchronous AC  links.

HVDC PLUS is the preferred technology for interconnection of islanded grids to the power system, such as off-shore wind farms. This technology provides the “Black-Start” feature by means of self-commutated voltage-sourced converters (VSC). Voltage-sourced converters do not need a “driving” system voltage; they can build up a 3-phase AC voltage via the DC voltage at the cable end, supplied from the converter at the main grid. Siemens uses an innovative Modular Multilevel Converter (MMC) technology for HVDC PLUS with low switching frequencies. Therefore only small or even nor filters are required at the AC side of the converter transformers. Fig. 8.12 summarizes the advantages in a comprehensive way. The specific features of MMC are explained in details in.

Since the 1960s, Flexible AC Transmission Systems have been developed to a mature technology with high power ratings. The technology, proven in various applications, became mature and highly reliable. FACTS, based on power electronics, have been developed to improve the performance of weak AC Systems and to make long distance AC transmission feasible. FACTS can also help solve technical problems in the interconnected power systems. FACTS are applicable in parallel connection (SVC, Static VAR Compensator – STATCOM, Static Synchronous Compensator), in series connection (FSC, Fixed Series Compensation – TCSC/TPSC, Thyristor Controlled/Protected Series Compensation – S³C, Solid-State Series Compensator), or in combination of both (UPFC, Unified Power Flow Controller – CSC, Convertible Static Compensator) to control load flow and to improve dynamic conditions. Fig. 8.14 show the basic configurations of FACTS.

GPFC is a special DC back-to-back link, which is designed for fast power and voltage control at both terminals. In this manner, GPFC is a “FACTS B2B”, which is less complex and less expensive than the UPFC. Rating of SVCs can go up to 800 MVAr, series FACTS devices are installed on 550 and 735 kV levels to increase the line transmission capacity up to several GW. Recent developments are the TPSC (Thyristor Protected Series Compensation) and the Short-Circuit Current Limiter (SCCL), both innovative solutions using special high power thyristor technology. The world’s biggest FACTS project with Series Compensation (TCSC/FSC) is at Purnea and Gorakhpur in India with a total rating of 1.7 GVAr.

Bulk Power UHV AC and DC transmission schemes over distances of more than 2000 km are currently under planning for the connection of various large hydropower stations in China Ultra high DC (up to 800 kV) and ultra-high AC (1000 kV) are the preferred voltage levels for these applications to keep the transmission losses as low as possible.

In India, there are similar prospects for UHV DC as in China due to the large extension of the grid. India’s energy growth is about 8-9 % per annum, with an installed generation capacity of 124 GW in 2006 (92 GW peak load demand). The installed generation capacity is expected to increase to 333 GW by 2017.

Central and Southern systems via three bulk power corridors which will build up a redundant “backbone” for the whole grid. Each corridor is planned for about 20 GW transmission capacity which shall be implemented with both AC and DC transmission lines with ratings of 4 – 10 GW each (at +/-800_kV DC and 1000 kv). Therefore, each corridor will have a set-up with 2 – 3systems for redundancy reasons. With these ideas, China envisages a total amount of about 900 GW installed generation capacity by 2020. For comparison, UCTE and IPS/UPS together sum up to 850 GW today.

The benefits of hybrid power system interconnections as large as these are clear:

•   Increase in transmission distance and reduction in losses – with UHV

•   HVDC serves as stability booster and firewall against large blackouts

•   Use of the most economical energy resources – far from load centers

•   Sharing of loads and reserve capacity

•   Renewable energy resources, e.g. large wind farms and solar fields can be integrated much more easily

However, with the 1000 kV AC lines there are also some stability constraints: if for example such an AC line of this kind with up to 10 GW transmission capacities are lost during faults, large inter-area oscillations might occur. For this reason, additional FACTS controllers for power oscillation damping and stability support are in discussion.

The idea of embedding huge amounts of wind energy in the German grid by using HVDC, FACTS and GIL (Gas Insulated Lines) is depicted. The goal is a significant CO2 reduction through the replacement of conventional energy sources by renewable energies, mainly offshore wind farms.  Power  output  of  wind  generation can  vary  fast  in  a  wide  range,  depending on  the weather conditions. Therefore, a sufficiently large amount of controlling power from the network is required to substitute the positive or negative deviation of actual wind power in feed to the scheduled wind power amount. Fig. 8.14 shows a typical example of the conditions, as measured in 2003. Wind power in feed and the regional network load during a week of maximum load in the E.ON control area are plotted. The relation between consumption and supply in this control area is illustrated in the figure. In the northern areas of the German grid, the transmission capacity is already at its limits, especially during times with low load and high wind power generation.

An efficient alternative for the connection of offshore wind farms is the integration of HVDC long distance transmission links into the synchronous AC system as schematically.


Deregulation  and  privatization  are  posing  new  challenges  on  high  voltage  transmission  systems. System elements are going to be loaded up to their thermal limits, and wide-area power trading with fast varying load patterns will lead to an increasing congestion.

Environmental constraints, such as energy saving, loss minimization and CO2 reduction, will play an increasingly important role. The loading of existing power systems will further increase, leading to bottlenecks and reliability problems. As a consequence of “lessons learned” from the large blackouts in 2003, advanced transmission technologies will be essential for the system developments, leading to Smart Grids with better controllability of the power flows.

HVDC and FACTS provide the necessary features to avoid technical problems in the power systems; they  increase  the  transmission  capacity  and  system  stability  very  efficiently,  and  they  assist  in prevention of cascading disturbances. They effectively support the grid access of renewable energy resources and reduce the transmission losses by optimization of the power flows. Bulk power UHV AC and DC transmission will be applied in emerging countries such as India and China to serve their booming energy demands in an efficient way.


This thesis tries to define the smart grid concept and where it is going as the infrastructure. It does so by providing an outlook on the electricity market and its players, explaining the main smart grid drivers, applications, challenges and benefits. As a part of this enterprise, power engineers, for example, are investigating efficient and intelligent ways of energy distribution & load management; computer scientists are researching cyber security issues for reliable sharing of information across the grid, the signal community is looking into advancing instrumentation facilities for detailed grid monitoring; wind engineers are studying renewable energy integration while business administrators are reframing power system market policies to adapt to these new changes to the system; the IT systems control the smart grid to ensure seamless  operational environment. Making a power system SMART require modeling, identification, estimation, robustness, optimal control and decision making over networks.

Future Suggestion of Smart Grid

While it is yet clear what the smart grid will become in the future, the great potential to save energy and costs to utilities and consumers alike make it an extremely important technology. However, one clear cut goal of the smart grid is to give consumers more control and interaction with their energy usage. With this newfound connection, utilities and consumers alike will know more about how energy is being used in their area, and most importantly give them the ability to do something about it. Similar to what email did for the internet, many believe that it may take something as small as an iPhone application to make the smart grid the next big technology sensation. The biggest barrier is, as usual, cost—for the utility companies to build the infrastructure, and then rely on consumers to make the right energy choices to make the investment worthwhile.18 Perhaps consumers need to get out there and make the commitment to show utility companies that we are serious about energy conservation and savings, both for the environment and our wallets!

The power grid of the future will be a more internet-like grid, with multi-directional flows of central and dispersed—distributed energy resources (DER)—generation sources. This will enable generation and load matching, that can further facilitate energy management or support local “islanding” micro grids. The Smart grid will also include multi-directional flows of information and communications via central and dispersed intelligence, enabling fully integrated network management through smart materials and power electronics. And increased two-way communications throughout a combination of large- and small-scale mesh-like system will help to engage end users through the availability of real-time information and participation technology.


This paper has dealt with the evolution of Smart Power Grid System. It is still in it nascent stage. The whole power community is busy now in understanding and developing smart power grid system which is no longer a theme of future. This introductory paper is a small but a very vital step towards achieving the ultimate goal of making a “National Grid” a reality.


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