A Smart Grid Architecture for Supporting Open Access to Power Grids
H. W. Ngan
The Hong Kong Polytechnic University
Abstract -- Smart Grid is the application of modern
information, communication, and electronics technology
to the electricity delivery infrastructure. It has been shown
that traditional grid design for securing reliability and
trade-offs between lines and plants economically can no
longer satisfy new role of power grid in competitive
market environment. Following deregulation of the
electricity supply industry, the role of power grid has
changed profoundly including a need to provide open
access to all generators of large and small scale of which
the grid is simply not designed for. In the paper, some
key elements of smart grid and its architecture are
outlined so as to show how it allows for a multitude of
energy services to support open access to the grid in a
competitive power market environment.
under regulation. Not only that a new regulatory
paradigm for the grid is emerging, the way the grid
is designed and operated can no longer fulfill its new
role such as to allow open access and allocated
available capacity for all generators in a nondiscriminatory manner. The new role of the grid has
extensive implications for its design, operation and
management.
Keywords: Smart Grid, Power Market, Open Access
I. INTRODUCTION
Power Grid has long been regarded as the
backbone providing vital links between electricity
producers and consumers. In its traditional form, the
power grid by design is based on slow responding
mechanical switches and without sufficient
intelligence to monitor and control the substation
components fast enough to cope with the dynamic
changes ahead. Since the late 20th century, many
technological innovations are emerging paving the
ways to develop the power grids towards the end
that meets the future needs of different stake holders
smartly. The interactions among all parties
concerned are infused into the power grids under the
smart grid vision underpinned by the bold
programme of research and development taken place
in the U.S. and Europe. Power grid is expected to be
transformed into one with "smarter" capabilities that
can integrate a multitude of distributed energy
resources, uses solid state electronics to manage and
deliver power, and employs automated control
systems and so termed "smart grid" with typical
applications at all level as shown in Figure 1.
In an open competitive environment, the
structure and regulation of the electricity industry
has changed profoundly. The core of change
involves allowing competition in the construction
and operation of power generation and leaves the
transmission of that power over the grid remain
Figure 1 Smart Grid Application
(Source from EPRI)
In this paper, the basic problem due to changes
on the role of the grid and how smart grid helps to
solve the problem will be discussed. Architecture of
the smart grid and its strategic implementation are
outlined.
II. NEW ROLE OF TNANSMISSION GRID
Over the last 20 years, changes in the basic
structure of the electricity sector have created
challenges to the traditional operation of power
systems. Changes in the technology of electricity
generation have gradually led to the opening of
electricity generation to more competition. Open
access to the transmission grid for generation from
new technologies such as combined cycle
combustion turbines, cogeneration and wind power
becomes more urging in need.
When the power system is in vertical integration
mode, transmission system operators are primarily
responsible for maintaining the delicate balance of
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supply, demand, and transmission capability, second
by second. Transmission system operations are
organized into "control areas", whose control area
operators must continuously balance electricity
demands with electricity generation while keeping
power flows over individual transmission lines
within specific limits for system operating reliability.
Upon generator deregulation, the grid is required to
provide open access for all generators which are
smaller in capacity but more efficient and distributed.
However, the grid is really not designed to receive
power in small or large capacity at what the grid sees
as the user end of the system. Also, the consumer
devices are almost passive for they take as much
power as they need from the grid and do not
otherwise communicate with or change in response
to grid conditions.
III. SMART GRID ARCHITECTURE
To cope with the changes, the smart grid vision
for the market has evolved in recent years through
the work of various consortiums and early adopter
efforts at utilities. The essence of the smart grid lies
in digital control of the power delivery network and
two-way communication with customers and market
participants. The grid infrastructure as illustrated in
Figure 2 provides an overall view of the changes.
Smart Grid
Energy Management
Systems,
Smart Meters,
Automated Demand
Response
DER
Microgrids,
Ancillary Services (e.g.
VAR control)
Distribution
Distribution
Transmission
Central
Generation
Basic Data Exchange
Substation
Distributed Control
Customer
Loads
Enhanced Data Exchange
Little Data Exchange
DER
Centralised Control
Grid Infrastructure
Customer
Loads
Passive Operation
Today
Distribution Automation
Substation
Substation Automation
Transmission
Wide Area Monitoring
Systems
Central
Generation
Figure 2 Changes on Power Grids
The new infrastructure will allow for a multitude of
energy services, markets, integrated distributed
energy resource, and control functions. The basic
structure of a smart grid architecture consists of the
following elements:
A. Advanced Metering Infrastructure (AMI)
AMI systems support two-way communications with
customers while supporting secure, encrypted, and
reliable system wide communication for distribution
automation represent an enabling foundation for the
smart grid. Increasingly, utilities will engage
customers through two-way energy/information
portals and through other automated means. This
could, in the future, create a fully functioning
marketplace with automated computer agents tied to
home automation systems responding to price
signals.
B. Distribution Management System
The focus of achieving cost savings and improved
customer service lies in distribution management
systems (DMS) that provide real-time response to
adverse or unstable conditions. In a smart grid,
software programs must provide self-healing
functionality in order to instantly detect and react to
power disturbances with minimal customer impact.
C. Distribution and Substation Automation
The smart grid will require functionality such as
control center supervision, area-wide solutions and
visualization
with
centralized
modeling.
Implementations
should
leverage
installed
infrastructure and deploy a model-based, scalable
approach to automation, providing a more practical
and cost-effective solution that ensures that current
hardware isolated and disconnected restorative grid
technology gives way to true reactive, softwaredriven intelligence with central or distributed control.
D. Simulation and Optimization
Through advanced simulation and optimization
schemes, the utility of the future will reap cost
savings and operational performance benefits not
previously achievable. The ability to analyze
automation and budget scenarios will drive smart
grid planning and performance even further.
E. Enterprise Business Intelligence
Overlaying these intelligent distribution system
technologies is the enterprise business intelligence
derived from system data and analytics. This key
piece of smart grid operations provides the highlevel presentation and ability for interpretation of
grid data and decision support through real-time
dashboards and historical analysis. Data is
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transformed into actionable information and a bridge
is built between IT and operations.
The key attributes of the smart grid can be
summarized as listed below:
• The grid will be ‘self-healing’ in the sense that
sophisticated grid monitors and controls will
anticipate and instantly respond to system
problems in order to avoid or mitigate power
outages and power quality problems.
• The grid will be more secure from physical and
cyber threats. Deployment of new technology
will allow better identification and response to
manmade or natural disruptions.
• The grid will support widespread use of
distributed generation. Standardized power and
communications interfaces will allow customers
to interconnect fuel cells, renewable generation,
and other distributed generation on a simple
"plug and play" basis.
• The grid will enable customers to better control
the appliances and equipment in their homes and
businesses. The grid will interconnect with
energy management systems in smart buildings
to enable customers to manage their energy use
and reduce their energy costs.
IV. CASES ON POWER MARKET SUPPORT
In an open competitive power market, existing
power plants are allowed to change their output level
in a time frame of 10 minutes interval, often
dramatically altering the direction of power flows
over the course of hours. Power traders can agree to
sell power from a plant to a load far away. We have
to create a grid which has high interoperability with
rich support of information technology. It allows
multiple networks, systems, devices, applications or
components to exchange information and to use that
information effectively for action with little or no
human intervention. Figure 3 illustrates the
architecture of the power grid for supporting
applications at all levels, essentially a high
throughput of electricity, money and information as
required in a competitive market.
One example of illustration can be referred to the
Portland General Electric’s Dispatchable Standby
Program in which it networks on-site backup
generators in sites such as office buildings and
public facilities and make them as standby capacity
to meet peak power demands. The utility is
responsible to install communications, control and
switching equipment on customer owned generators,
and provide maintenance and fuel. In return
customers allow the utility to run generators up to
400 hours per year. The program aims to supply 100
megawatts of peaking capacity and now has 38 MW
on line or under construction.
Figure 3 Architecture Enables the Smart Grid
(Source: from EPRI)
Real-time monitoring – Sensors are embedded
throughout the grid from generators and power lines
through substations and feeders. The real time
information stream enables a multiplicity of
functions including rapid diagnosis and correction of
grid problems, and measurements of transmission
lines to determine when they are reaching capacity –
Lack of such information means transmission
operators must under-use wires to make sure they do
not overload. Real-time readings will allow fuller
utilization of transmission lines, improving grid
reliability and economics. For instant, Bonneville
Power Administration (BPA) has pioneered the
Wide-Area Measurement System (WAMS) a
network of sensors located at substations which
provide real-time updates on the Bonneville grid 30
times per second. Updates are coordinated through
global positioning satellites and sent to a central
computer that analyzes disturbances, provides
operators with solutions and monitors the results.
WAMS systems now operate throughout the western
U.S. Similar monitoring networks are being installed
in the Northeast in order to avoid a repeat of the
August 2003 blackout.
Demand Response – Two-way communications
between power providers and customers opens the
way to flexibly adjust power to grid conditions. This
“demand response” contrasts with the traditional
utility system in which supply adjusts to meet all
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demands. Customers receive financial incentives for
cutting power demand at times the grid is under
pressure. They can do this by dropping consumption
or replacing grid power with distributed generation.
Demand response holds power bills in check by
reducing the need for peak power generation and
wires infrastructure, the most costly pieces of the
power grid because they are used the fewest hours. It
could also be employed to help prevent blackouts
and brownouts. For example, BPA operates a
Demand Exchange system which uses wireless and
web technologies to alert participating customers
when the power system is expected to be under
stress, for example, when arrival of a cold front is
forecast. Customers respond with bids for demand
reductions and receive financial compensation in
return. Demand Exchange is being employed on the
Olympic Peninsula to shave peaks in an effort to
defer the need for expanded transmission capacity.
BPA is also signing up local backup generators to
offset peak demands.
Smart meters – Smart meters record power usage
digitally by time of day and report it by
telecommunications. This enables pricing that varies
between high and low demand periods, providing
economic incentives to shift power use out of peaks.
Northwest utilities including Puget Sound Energy
and Avista have made large smart meter
deployments. Following the 2000-2001 West Coast
power crisis California instituted a Dynamic Pricing
Pilot to test the effects of time-based pricing on
peaks. Starting in July 2003 smart meters were
installed at 2,500 customer locations and several rate
structures were tested. Peak reductions on hot
summer days when the grid was most stressed
reached 13%. With a large majority of participants
expressing a desire to continue, the program remains
ongoing.
V. CONCLUSION
The smart grid, as outlined in this paper, is
developed towards the architecture with high
interoperability based on application of digital
information, communication and power electronic
technologies. It assumes the new role of fulfilling
the power flow requirement by allowing open access
and facilitating competitive market activities to be
carried out effectively. Applications of the smart
grid infrastructure to meet the needs of the future
power market and to support its development are
presented in the paper as well.
VI. REFERENCES
[1] Moore D. and McDonnel D. "Smart Grid Vision
Meets Distribution Utility Reality", Report of
McDonnel Group, March 2007.
[2] Fox-Penner, P., "Rethinking the Grid: Avoiding
More Blackouts and Modernizing the Power
Grid will be Harder than You Think", The
Electricity Journal, 205, pp. 28-42
[3] Ngan, HW "Smart Grid Technology for Power
Market Development", Proceedings of the 6th
Annual Power Symposium 2007", Power and
Energy Section of the IET Hong Kong, June
2007, Invited Paper No. 1, pages 1-5.
[4] Potocnik, J., "European SmartGrids Technology
Platform, - Vision and Strategy for European’s
Electricity Networks of the Future" EUR 22040,
2006
[5] Mazza, P., "Powering up the Smart Grid: a
Northwest Initiative for Job Creation, Energy
Security and clean, Affordable Electricity," July
2005.
[6] Hakvoort, R., "Technology and Restructuring
the
Electricity
Market",
International
Conference on Electric Utility Deregulation and
Restructuring and Power Technologies, 2000, 47 April, 2000, pp. 390-395
VII. BIOGRAPHIES
H.W. Ngan received his M.Sc in 1979,
MBA in 1985 and PhD in 1993 from the
University of Aston, University of Hong
Kong and University of Strathclyde
respectively. He has been elected as Fellow of the
Institution of Engineering and Technology (FIET),
and Senior Member of the Institute of Electrical and
Electronic Engineers (SrMIEEE). He served as
Chairman of the IEEE Hong Kong Section in 2003
and 2004. He is now the Associate Professor in the
Department of Electrical Engineering, the Hong
Kong Polytechnic University. His current research
interests include Power Market Reform and
Simulation, Smart Grid Modeling and Control,
Sustainable Energy Development and Energy Policy
Planning.
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