chapter seven
Smart grid concepts
7.1 Introduction
High-quality electricity is a necessity in the modern world, due to the
innumerable applications demanding quality power, such as electronic
manufacturing, microprocessors, and many sensitive devices being used
by common man. Hence, it is imperative of the electric utilities world over
to supply affordable, reliable, and quality electric power to all [1].
In a traditional power system, centralized generating stations gener-
ate bulk power which is transmitted to the consumers through a one-way
transmission and distribution system called the grid. Modernization of
the grid is a priority for all the utilities, and governments are devising
policies and practices driving the TRANSCO and DISCOs to moderniza-
tion of the grid.
The motivation for modernization are manyfold with speci c goals
in mind [1,2]:
1. To make the production and delivery of electricity more cost-
effective and ef cient
2. To provide consumers with electronically available information and
automated tools to help them make more informed decisions about
their energy consumption and control their costs
3. To help reduce production of greenhouse gas emissions in generat-
ing electricity by permitting greater use of renewable sources
4. To improve the reliability of service
5. To prepare the grid to support a growing eet of electric vehicles in
order to reduce dependence on oil
6. To facilitate the integration of distributed resources into the grid and
prepare the grid for the challenges involved
7. To delay investment intended to add capacity to generation, trans-
mission, and distribution networks
Smart grid is the solution to the above concerns and will be discussed in
detail in the following sections.
251
252 Power system SCADA and smart grids
7.2 Smart grid de nition and development
A smart grid delivers electricity from suppliers to consumers using digi-
tal technology to save energy, reduce costs, and increase reliability. It
connects everyone to abundant, affordable, clean, ef cient, and reliable
electric power anytime, anywhere, providing a way of addressing energy
independence and global warming issues.
Smart grid is a concept and may look different for different stakehold-
ers. However, the envisioned smart grid concept will
• Motivate and include customers
• Resist attack
• Provide power quality for the 21st century
• Accommodate all storage and generation options
• Enable markets
• Optimize assets and operate ef ciently
• Be self-healing
Smart grid is de nitely the integration of the available electrical infrastruc-
ture with enhanced information capabilities, and it incorporates automa-
tion and information technology with the existing electrical network, so
that the grid can operate in a smarter way. Smart grid implementations
will provide comprehensive solutions that will improve power reliabil-
ity, operational performance, and productivity for utilities. By making the
grid smarter, energy use is managed ef ciently, and customers will be
able to save money without compromising on lifestyle. Optimal integra-
tion of renewables into the grid is a major bene t of smart grid imple-
mentation, and there will be substantial penetration of renewables in a
smart grid scenario. Smart grid will provide meaningful, measurable, and
sustainable bene ts to all stakeholders by increasing energy ef ciency
and reducing carbon emissions.
7.3 Old grid versus new grid
The comparison of the traditional power grid and the smart grid
(Table 7.1) will produce a host of advantages that the utilities, govern-
ment, and customers will gain from the deployment of smart grid tech-
nologies. Figure 7.1 gives an overview of the old grid and migration to a
smarter grid.
The conceptual diagram of the smart grid in Figure 7.2 shows the
seven different domain entities and the mechanisms for successful opera-
tion of the new grid are clearly visible. The traditional bulk generation
is transmitted and then distributed to the consumers; at the same time,
the integration of distributed generation is done at the bulk as well as
distribution and customer levels. The bidirectional information ow from
Chapter seven: Smart grid concepts 253
Table 7.1 Comparison of Traditional Grid and Smart Grid
Traditional grid Smart grid
Customer calls when the power Utility knows when power is out and
goes out restores it automatically
Utility meets peak demand Utility suppresses peak demand, thus
lowering the cost
Dif cult to manage high wind Utility can manage distributed energy
and solar penetration resources safely
10%+ power loss in T&D Utility reduces power loss by 2+%, and
reduce emissions and electricity bills of
customers
All centralized control Local control provides distributed
generation
Energy Asset Demand Delivery
Applications Economic Optimization Optimization Optimization Optimization
Dispatch
Generation Advanced
How Power Transmission Sensors/ Distribution Distribution
& Transmission Metering
ows Automation IEDS Management Automation
Management System
Generation & Distribution Voltage Renewable
Generation Lines Sub Stations Equipment Control Generation
Delivery
Old grid Modern grid
Figure 7.1 Migration of the old grid to a smart grid.
the customer to the utility by means of smart meters which enable real-
time pricing is an added feature. The distributed storage at the utility
and customer level coupled with electric vehicles and smart appliances at
the customer premises loaded with networked sensors and home energy
management systems adds value to the smart grid migration from the
traditional grid. This has prompted the emergence of energy service pro-
viders and exible energy markets with smart transmission phasor mea-
surement units and wide-area monitoring and controls for a stable grid
and for faster mitigation of any disturbance.
7.4 Stakeholders in smart grid development [3]
A casual look at the electricity market scenario today will give us
an indication that smart grid is a reality, at least with partial capabili-
ties. However, this development necessitated the involvement of a large
254 Power system SCADA and smart grids
Operations
SCADA
Service providers
Markets
Dynamic
pricing Home Energy
Management
Customers Electric
Vehicles
Bulk generation Storage
Microgrids
Distribution
DA/DMS
Large Distributed generation
Renewables Transmission Smart meters,
Transmission
WAMS and AMI
PMUs
Figure 7.2 Smart grid conceptual diagram.
number of stakeholders who worked in unison with a vision to improve
the grid and be prepared for the challenges ahead.
Policy makers, utilities, researchers, manufacturers, vendors, and cus-
tomers are all stakeholders in this exciting development on the electrical
energy horizon.
Policy makers in every country are coming out with guidelines for
smart grid implementation. In 2007 in the United States, President Bush
signed the Energy and Independence Security Act (EISA) under which
Title XIII established federal policy on the smart grid. The National
Institute of Standards and Technology (NIST), which is in the Department
of Commerce, was made the overall coordinator of smart grid standards
and interoperability. In 2009 in the United States, President Obama signed
the American Recovery and Reinvestment Act, appropriating $4.5 bil-
lion in budget authority to modernize the electric grid. NIST received
$12 million of these “stimulus funds” to ful ll its legislative mandate to
coordinate smart grid standards and interoperability. The Government
of India (GOI) in an effort to move toward a smarter grid implemented
the accelerated power development and reforms program (APDRP) pro-
viding funding to state electricity utilities to improve the energy audit-
ing and accounting system and hence reduce the losses by 15%. The GOI
has also set up a Smart Grid Task Force, an interministerial group, to cre-
ate a road map. The Smart Grid Forum is a nonpro t voluntary consor-
tium of public and private partners with the objective of accelerating the
Chapter seven: Smart grid concepts 255
smart grid developments in India. Similar developments are happening
around the globe, and pilot projects are running at many locations. The
emphasis of the policy makers is on creating advanced metering infra-
structures for inclusion of customers as stakeholders, building two-way
digital communication with cybersecurity, development and deployment
of standards for interoperability, real-time wide-area monitoring system
implementation.
Industry standards developers have been integral to development. EISA
of 2007 directed the NIST to form the Smart Grid Interoperability Panel
(SGIP) in 2009 as a public-private partnership. SGIP’s charge was to coor-
dinate standards work to ensure interoperability and security as the grid
is modernized. After SGIP developed a strategy and a structure in 2010 to
2012, it transitioned in 2013 to SGIP 2.0, Inc., a member-funded organiza-
tion that carried forth its predecessor’s original mission. The transition
essentially put the power industry in charge of its own destiny. SGIP 2.0,
Inc. grew in 2012 from 88 members to more than 200, as various stakehold-
ers grasped the power industry’s fundamental challenges and seized an
opportunity to shape the future. Work efforts include case studies, white
papers, tools, and use cases addressing cybersecurity risk management,
smart grid cloud computing, distributed renewable energy resources,
volt-var management, dynamic pricing, electric vehicle charging, testing
and certi cation, demand response programs, transactive retail energy
applications, bidirectional weather data exchanges, global interoperability
approaches, and regulator educational seminars.
Utilities are reinventing the advantages of supervisory control and data
acquisition (SCADA) and automation of every component in the power
sector from generation to transmission to distribution to the customers.
Across the world, deregulation and restructuring have created a healthy
competition and modernization of the aging infrastructure, and most of
the utilities are embracing the smart grid concepts with great enthusiasm.
Huge investments are being made for implementing advanced metering
infrastructure (AMI) not only for industrial and commercial customers,
but also for domestic customers while providing speci c advantages to
the utilities. Transmission utilities are installing wide-area measurement
systems with phasor measurement units, phasor data concentrators, and
associated data integration with the existing SCADA systems to make the
transmission systems more secure and avoid blackouts.
Researchers and research laboratories have initiated the smart grid con-
cept by designing and developing analytical tools and technologies for
smart grid implementation. A consortium of academic institutions has
been working toward developing software architecture for smart grid. As
a National Science Foundation Industry-University Cooperative Research
Center, the Power Systems Engineering Research Center (PSERC) draws
on university capabilities to creatively address the challenges facing the
256 Power system SCADA and smart grids
electric power industry. Its core purpose is to empower minds to engineer
the future electric energy system. Under the banner of PSERC, multiple
US universities are working collaboratively toward:
• Engaging in forward-thinking about future scenarios for the indus-
try and the challenges that might arise from them
• Conducting research for innovative solutions to these challenges
using multidisciplinary research expertise in a unique multi-
campus work environment
• Facilitating the interchange of ideas and collaboration among aca-
demia, industry, and government on critical industry issues
• Educating the next generation of power industry engineers
PSERC provides
• Ef cient access to experienced university researchers in an array of rel-
evant disciplines and geographically located across the United States
• Leading- edge research in cost-effective projects jointly developed by
industry leaders and university experts
• High- quality education of future power engineers
The multidisciplinary expertise of PSERC’s researchers includes power
systems, applied mathematics, complex systems, computing, control the-
ory, power electronics, operations research, nonlinear systems, economics,
industrial organization, and public policy. PSERC partners with private
and public organizations that provide integrated energy services, trans-
mission and distribution services, power system planning, control and
oversight, market management services, and public policy development.
Power system equipment manufacturers and vendors have contributed
to the smart grid migration by creating and developing new equipment
and software for implementation.
Technology companies have also jumped into the smart grid arena
to utilize their expertise in the information technology (IT) sector by
developing IT technology–related products suitable for the smart grid
implementation, as the smart grid involves amalgamation of the IT with
electrical technology. New products and applications are being developed
by these companies speci cally to suit the needs of the power automa-
tion industry.
7.5 Smart grid solutions
Migration to smart grid enhances the power system performance in many
ways, and the major foundations of a smart grid implementation are the
solutions. Traditional device and system development continues, but with
Chapter seven: Smart grid concepts 257
Shared Services and Applications
Workforce
Smart Meters Distribution Trasmission and
Asset Demand
and Engineering
Optimization Optimization Optimization Optimization
Comms Design
Optimization
Interoperability Framework
Figure 7.3 Smart grid interoperability framework.
smart grid the industry has transitioned to solutions. A solution is a set of
technology components integrated to successfully interoperate to address
the business needs of the electric utility customers. In general, the six
solutions with the strongest business cases are
1. Asset optimization
2. Demand optimization
3. Smart meter and communication
4. Distribution optimization
5. Transmission optimization
6. Workforce and engineering design optimization
Figure 7.3 gives a clearer picture of the foundations, and the following sec-
tions elaborate the functions of each foundation.
7.5.1 Asset optimization
Asset optimization includes proactive equipment maintenance via equip-
ment condition monitoring and produces a lot of advantages for the power
industry. Focused maintenance can be done on equipment, and asset opti-
mization will de nitely reduce outages and risks of failure as the assets
are monitored and assessed continuously. This leads to better utilization
of assets, and a utility can squeeze more capacity from existing equipment
and devices. Savings are achieved due to the delayed investment in addi-
tional equipment. The details of this delayed investment are explained in
Section 4.9.3.4. Asset optimization also includes use of intelligent sensors
and equipment as discussed earlier and shown in Figure 7.4.
7.5.2 Demand optimization
Demand optimization is a major paradigm shift in the history of power
distribution due to customer involvement. The main feature of demand
258 Power system SCADA and smart grids
Shared Services and Applications
Intelligent Monitoring and Desision
Sensors Diagnostics Engine
Figure.7.4 Asset optimization.
Shared Services and Applications
DR Mgmt. Comms. In-Home
Software (DRMS) (ISP) Enabling
Technology
Interoperability Framework
Figure 7.5 Demand optimization.
optimization is the peak consumption reduction by consumers, thereby
reducing the peak load and hence the generation at the utility. This is
achieved through distribution management systems, in-home enabling
technologies, such as smart meter, and the associated communication
infrastructure, as shown in Figure 7.5.
For example, the United States has an installed capacity of 1,000,000 MW,
and if 20% of this capacity is used only 5% of the time, this essentially
means that 200,000 MW capacity generation, transmission, and distri-
bution resources worth $300 billion are utilized for only 5% of the time.
It may be worthwhile to see how these assets can be better utilized if
we understand demand response by involving customers. This can be
achieved by incentivizing the customers for opting for demand response
while implementing automated load cuts from the substation along with
additional incentives.
Thus demand optimization results in delay or avoidance of addi-
tional investment; thus, better utilization of the existing infrastruc-
ture is achieved. It also encourages customer empowerment, increases
satisfaction and loyalty of the customers, and allows customers to save
money by reducing electricity bills.
7.5.3 Distribution optimization
Distribution optimization revolves around the automation of the distri-
bution system, as discussed in Chapter 6, which involves automating,
the distribution substations, feeders, and the customers. Although cost
Chapter seven: Smart grid concepts 259
Shared Services and Applications
Feeder Substation Advance Distribution Adjacent
Automation Automation Distribution Management Technology
Applications System
Interoperability Framework
Figure 7.6 Distribution optimization.
intensive, the distribution automation brings added advantages to the
utility as it opens the pathway to the smart grid implementation and all
the associated functionalities.
Another important feature of distribution optimization is the renew-
able integration at the feeder level and at the customer level. This inte-
gration creates additional advantages like reduction in peak demand,
deferred capital investment, satis ed customers, and so on. However,
it causes integration and operational issues for the distribution system,
unpredictable output of the renewable resources, storage problems, and
nally the structure development. Distribution optimization will ensure
less energy waste, with higher pro t margins by reducing the losses in the
distribution systems. Figure 7.6 shows the components of a distribution
optimization solution.
Plugged hybrid vehicle integration is another aspect of distribution
optimization. With more companies manufacturing electric vehicles, it is
imperative for the distribution utility to utilize adequate charging facili-
ties and infrastructure to cope with the growth.
Thus, distribution optimization allows cleaner, greener generation,
which implies emission reduction with improved ef ciency and reliability.
7.5.4 Smart meter and communications
Smart meter is the brain of customer automation and in a way the imple-
mentation of demand optimization. Smart meter with well-de ned func-
tionalities at the customer premises enables both customers and the
utility to reap the bene ts of automation. A two-way communication
infrastructure for the smart meter interaction with the utility is a chal-
lenge, because as in distribution systems, these have to be developed from
scratch. Utilities are investing in this segment so that the bene ts of smart
grid can be reaped completely. Enabling technologies for network con-
nectivity, consumer enablement, demand optimization, and improved
260 Power system SCADA and smart grids
Shared Services and Applications
Network
Metering Communication Management Grid Data
Network System Manager
(NMS)
Interoperability Framework
Figure 7.7 Smart meter and communication solutions.
operations are a few features of smart meter and communication optimi-
zation. Figure 7.7 gives the smart meter and communication infrastruc-
ture solution architecture.
7.5.5 Transmission optimization
Transmission optimization involves wide-area monitoring protection and
control, and it improves the reliability and ef ciency of the transmission.
Earlier the state estimation and other related transmission SCADA appli-
cations were dependent on the 2 s status and 10 s analog data acquired by
the SCADA system. With the deployment of phasor measurement units
and phasor data concentrators, the state estimation and related applica-
tions produce more reliable and faster data, and the operators are bet-
ter equipped to deal with contingencies. Great improvement in reliability
and ef ciency of the system is achieved by the WAMS implementation.
Figure 7.8 shows the components of transmission optimization solutions.
Another interesting feature of transmission optimization is the inte-
gration of large renewable energy sources to the grid, such as wind farms
and solar farms. This leads to cleaner generation although it brings in a
set of problems and challenges in operating the grid, mainly due to the
uncertainty involved in the renewable energy prediction. Transmission
optimization had been dealt with in detail in Chapter 5.
Shared Services and Applications
Substation Grid Adjacent
Management Management Technology
Interoperability Framework
Figure 7.8 Transmission optimization.
Chapter seven: Smart grid concepts 261
Shared Services and Applications
T&D Workforce and Comms
Mobile
Infrastructure Work order Infrastructure
Computing
Management Management Management
Interoperability Framework
Figure 7.9 Workforce and engineering optimization.
7.5.6 Workforce and engineering optimization [4]
A rapidly evolving workforce is reshaping the risk pro les of power and
utilities organizations, posing challenges to their traditional control and
compliance capabilities. A more systematic approach to capturing and
keeping core know-how and new ways of transmitting that knowledge
to a younger generation are necessary. Approximately 40% of current
employees and 60% of current executives are eligible to retire in 5 years in
the USA for instance. Workforce-enabling technologies such as automated
workforce deployment and eld force automation have led to increased
workforce productivity and work satisfaction. As discussed in Chapter 6,
many utilities are engaged in updating and integrating the functional-
ities in a distribution control room such as DMS, OMS, GIS, AMI, and so
on, so that the dispatcher and other workforce get maximum information
and effective tools for data usage. Data warehousing to help the different
departments of the electric utility has already been discussed.
Engineering optimization involves improved modeling and system
design capabilities, so that cost-effective system design and modeling can
be done with ease. It is seen that workforce optimization can save up to
30% labor cost in a well-motivated, automated utility. Figure 7.9 gives the
workforce and engineering optimization architecture.
7.5.7 Smart grid road map
Figure 7.10 shows the smart grid road map with all the six solutions
depicted, which gives a clear understanding of the path ahead.
7.6 Smart distribution
Governmental policies covering reduction in pollution emissions, cli-
mate change, and incentives for renewable generation are providing elec-
tric utilities enough reasons to be involved in major revamping of the
262 Power system SCADA and smart grids
O ce Internet
Distributed Energy Resource Manager
Security BIZ Design
FDIR IVVC OFR DPA DR WAMS Asset Mgr Hist Tools
Services Apps
Operations Bus- Software Services Infrastructure Enterprise
EMS DMS OMS GIS FFA Mobile NMS Data Model Mobile
MDMS
Real-Time Communications
Backhaul Router
Comms
Consumers
Communications
Infrastructure Internet
Backhaul Substations Backhaul Smart Grid
Comms Comms Base
Smart Gateway
Substation Router
Controller Apps Devices
Smart
HAN
Protection Transformer Volt Reg, Meter Gen &
Local
HMI Relays M&D LTC, Caps Store
Residental, Commercial
Wired/Wireless Substation Communications & Industrial
Microgrid Generation Others IEDs
PMU
Controller & Storage & I/O
Switches & Volt/VAR Utility
Breakers Devices Owned
Optimized Solutions
Smart meter system Transmission Smart Smart Smart
Router Router Router
Distribution Software service infra
Demand Asset Reclosers Volt Reg Generation
& Switches & Caps & Storage
Workforce & engr design
Figure 7.10 (See color insert.) Smart grid road map.
distribution infrastructure. The needs and requirements of the customer
are also changing faster, and the utility has to provide innovative solu-
tions with quality power to the customers, both industrial and domestic.
The distribution system needs to be redesigned for high levels of distrib-
uted energy resources, creating a smarter and more exible system for
improved reliability, high penetration of renewable sources, dynamic
islanding, distributed control, and increased generation ef ciencies
through the use of waste heat. The following sections will elaborate the
smart distribution system building blocks. It may be noted that the smart
distribution system becomes a reality when systems are automated and
ready for smart operation.
7.6.1 Demand-side management and demand response [3,5]
Electric energy demand-supply balance is the basis of stable operation of a
power system. The large generation, bulk transmission and distribution sys-
tems work in unison to achieve this balance at all times, but bulk energy
storage remains a challenge. However, the inclusion of customers—the
demand side of the distribution system—is attracting a lot of attention
as this can help the utility to streamline the operations with a host of
Chapter seven: Smart grid concepts 263
advantages. Demand-side management attempts to improve energy ef -
ciency at the customer side of the electricity distribution.
Demand-side management is a solution to equip the power system to
meet the ever-increasing demand of electricity around the globe, where
the traditional generation and transmission systems are not able to han-
dle additional load requirements. Intelligent demand-side management
is made possible due to the development of two-way communication
facilities between the distribution utility and the customer, thus pav-
ing the way for customer involvement. Intelligent DSM helps utilities to
stretch the limits of the generation, transmission, and distribution, so as to
accommodate the demands of the customers, by managing the load on the
system. Distributed generation is an added advantage here, as the local
generation to supply the load is a way of decongesting the transmission
and primary distribution systems.
Figure 7.11 shows the load management scenarios used in different
time frames and the impacts on the process quality at the customer end.
Until recently, the entire activity was “utility driven”; however, in the
smart grid perspective, the shift is toward “customer driven.”
Hence, demand-side management can be divided into four categories
depending on the timing and impact of the measures used for load reduc-
tion, as given in Figure 7.11:
• Energy ef ciency (EE)
• Time of use (TOU)
• Demand response (DR)
• Spinning reserve (SR)
Impacts on
Process
Temporarily Quality
reduced SR
Physical
DR SR- Spinning Reserves
DR- Distributed resources
Market DR
TOU- Time of use
Optimized
Schedule TOU
Energy
Optimized E ciency Timings
Permanent Days Seconds
Figure 7.11 Demand-side management time frames [5].
