IEEE Power & Energy Magazine - May/June 2014 - 38

after having served us for more than a century, existing
electricity grids have been found incapable of satisfying our
desire for greater system reliability and for increased usage
of renewable energy sources so as to reduce emissions of
the greenhouse gases that cause global warming. It has been
observed that the U.S. electricity grid has become increasingly unreliable over the past few decades, with sharp
increases in both the number of outages per year and the
severity of the consequences of those outages. and due to
the nature of electricity, the amount of generation and consumption should be exactly matched at any given instant
in time. otherwise, either the excess amount of electricity generated is wasted or power outages will occur due to
insufficient energy supply. In the existing electricity grid,
numerous schemes have been developed to balance generation and consumption. Because of the stochastic nature of
renewable energy generation, however, none of the existing
schemes will be adequate when there is a high percentage of
renewable energy generation in the grid. Studies have shown
that no more than 10% of renewable energy can be tolerated by most existing electricity grids. In addition, there is a
desire to involve customers in grid operations, for example
by letting them schedule their electricity consumption based
on differential pricing or even generate electricity and sell
excess generation to the grid. as a result, there is an urgent
need to upgrade the existing grid. the future electricity grid
that will result has been dubbed the "smart grid." this future
smart grid will be capable of:
✔ accommodating a high percentage of renewable
energy generation
✔ providing high-quality and highly reliable electricity
services to customers
✔ actively involving consumers in grid operations.

to successfully complete the upgrade to a smart grid,
advanced communication technologies are essential.
the benefits offered by these technologies include more
accurate and timely dissemination of state information
about the grid, which lets grid operation programs carry
out precise and efficient real-time scheduling to alleviate the

Operations

Bulk
Generation

Transmission

Markets

Distribution

Customers

Service
Providers

figure 1. The seven-entity smart grid framework proposed
in 2010 by NIST.
38

ieee power & energy magazine

problems brought about by the volatility of renewable generation and fluctuations in customer demand.
this article aims to give an introduction to the smart
grid from the perspective of a communication engineer; it
describes a communication-oriented smart grid framework
originally proposed by the authors in 2011. the article also
aims to provide readers with a comprehensive understanding of the communications issues surrounding the smart grid
so that they may use the framework discussed to properly
design a smart grid communication system.
after familiarizing readers with the fundamentals of
electricity grid and smart grid, we introduce a three-entity,
high-level, communication-oriented framework for the
smart grid. then we give readers a closer look at each entity
and discuss possible communication issues. Before concluding, we provide an illustration of how the framework can be
used to design smart grid communication systems.

A Smart Grid Framework
In January 2010, the U.S. national Institute of Standards and
technologies (nISt) issued a document that addresses the
interoperable framework for smart grid. as shown in Figure
1, the proposed framework consisted of seven entities: operations, bulk generation, transmission, distribution, customers,
markets, and service providers. the idea was that with the
help of properly designed communication networks, these
seven entities could communicate and interact with each
other. after careful investigation, however, we have concluded that although this framework serves as a good reference to help engineers with a background in power systems
understand numerous smart grid issues, it does not include
enough details about the communication aspects of the problem. We have therefore proposed a three-entity smart grid
communication framework.
as shown in Figure 2, the smart grid communication
framework consists of three entities: the operation network,
the business network, and the consumer network. each of the
three represents a different set of communication networks
serving different functions. the operation network is primarily used by power companies to help maintain grid functionality. the business network is used by participants in the
electricity market to efficiently regulate the market as well as
to provide electricity services to consumers. the consumer
network is used by each consumer for home energy management so as to enhance the electricity usage experience.
readers can interpret operation network to mean the
backbone network of the smart grid communication system. Its design requires a deep understanding of the existing power system and will very likely involve collaboration
with power system and communication engineers. the business network can be regarded as the connection between
the operation network and the consumer network; it aims to
maximize the efficiency of the electricity market. the business network's design requires knowledge of economics and
government policies. the consumer network can be seen as
may/june 2014



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