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applications for optimization.

      Energy management may be supported by distributed energy management technologies that include energy storage devices and various methods for reducing overall electrical load.

      The technology references as SCADA/EMS or EMS/SCADA are common. In [Weiss 2010], EMS is described as a SCADA system with additional applications.

      EMS may exclude the monitoring and control functions, more specifically referring to a suite of power applications. In other circumstances, EMS refers to a system of hardware and software components for an automated control and monitoring of the heating, ventilation, and lighting needs of a building or group of buildings such as university campuses, office buildings, or factories [Panke 2002]. Most of these EMS also provide facilities for the reading of electricity, gas, and water meters. The data obtained from these EMS systems can then be used to produce trend analysis and annual consumption forecasts.

      The increasing number of SCADA/EMS systems operating in the electric industry, the growing number of market participants, and the development of complex market models relying more on IT technologies contribute to raising the interdependency between the operation of the power grid and the operation of the wholesale electric market.

      1.7.4 Advanced Meter Systems

      The AMI enable measurement of detailed, time‐based information and frequent collection and transmittal of such information to various parties. Advanced metering systems are composed of hardware, software, communications, consumer energy displays and controllers, and applications (such as customer‐associated systems, meter data management, and supplier business systems).

      AMI typically refers to the full measurement and collection system that includes meters at the customer site; communication networks between the customer and a service provider, such as an electric, gas, or water utility; and data reception and management systems that make the information available to the service provider [EPRI 2007], [UCAIUG 2008].

      Smart Grid is defined as system of systems, implying also a network of information networks. Although some characteristics are similar to IT systems, AMI systems have characteristics that differ from traditional information systems. Many of these differences stem from the fact that AMI systems are integrated into the physical power grid. In some cases, adversely impacting an AMI system can pose significant risk to the health and safety of human lives and serious damage to the environment, as well as serious financial issues such as production losses.

      Unlike automatic meter reading, AMI enables two‐way communications with the meter. Smart meters enable two‐way communication between the meter and the central system. A smart meter is an electronic device that records consumption of electric energy, natural gas, or water in intervals of an hour or less and communicates that information at least daily back to the utility for monitoring and billing purposes. Each meter must be able to reliably and securely communicate the information collected to some central location.

      In addition to communication with the headend network, smart meters may need to be part of a home area network, which can include a customer display and a hub to interface one or more meters with the headend. Technologies for this network vary from country to country. Many security concerns center on the inherent hacking weakness of wireless technology, combined with the remotely controllable software incorporated into smart meters.

      Security of the devices and information and other issues associated with meter data transmission from the customer meters to the AMI host system need to be addressed to ensure that only authorized devices provide and receive meter data.

1.8 Standards, Guidelines, and Recommendations

      In the development of Smart Grid, requirements may be developed based on standards, guidelines, and recommendations defined as follows:

       Standards are documents, established by consensus, that provide rules, guidelines, or characteristics for products, activities, or their results; once adopted by an industry, they can be enforced, and an organization may comply.

       Guidelines are a set of recommended practices produced by a recognized authoritative source representing subject matter experts and community consensus or internally by an organization; the guidelines may be adopted, but there are no compliance requirements.

       Recommendations are a set of advices and good practices.

      1.8.1 Overview of Various Standards

      Standards are being talked about all over the world, and it is a confusing world full of new acronyms, players, consultants, and companies. While overwhelming at times and competitive at others, standards organizations are all working toward the same goal. The goal is for vendor interoperability and collaboration without the installation of custom systems. Standards help in maximizing safety, compatibility, and quality of processes and products.

      Technical standards are the result of a standardization process, and they can be classified as:

       De facto standards that are followed by informal convention or dominant usage.

       De jure standards that are part of legally binding contracts, laws, or regulations.

       Voluntary standards that are published and available for people to consider for use.

      A technical standard is a formal document of specifications that define the capabilities of a product for a particular use including the function and performance of a device or system. It is usually a document that establishes uniform engineering or technical criteria, methods, processes, and practices. A standard or a group of standards can be used to support a function.

      Standardization is greatly increased when companies release new products to market. Compatibility is important for products to be successful; this allows consumers to use their new items along with what they already own.

      Also, standards may include safety issues following these guidelines [ISO/IEC 51].

      The existence of a published standard does not necessarily imply that it is useful or correct. Just because an item is stamped with a standard number does not, by itself, indicate that the item is fit for any particular use. The people who use the item or service (engineers, trade unions, etc.) or specify it (building codes, government, industry, etc.) have the responsibility to consider the available standards, specify the correct one, enforce compliance, and use the item correctly. Therefore, key attributes need to be considered.

      1.8.2 Key Standard Attributes and Conformance

      Key standard attributes should include:

       Enable interoperability – Standards are critical to enabling interoperable systems and components; mature, robust standards are the foundation of mass markets for the millions of components that will have a role in the future Smart Grid.

       Enable innovation – Standards enable innovation where thousands of companies may construct individual components.

       Enable consistency – Standards also enable consistency in system management and maintenance over the life cycles of components.

      The electricity industry is facing multiple competing standards, guidelines, and recommendations. The Smart Grid is no exception.

      1.8.3 Smart Grid Standards

      Collaboration on standards for the Smart Grid is a must, and the power industry needs to embrace the work the standards organizations are doing. Participation is encouraged; but more important are the conversations that occur at appropriate levels of abstraction. It is also important for all standards organizations to work at the level that suits the application. For example, when specifying a protocol, the

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