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1 Smart Grid Architecture Overview

      The electric power system is the largest and best engineering invention and achievement in human history. However, this grid paradigm faces serious challenges with regard to the increasing demand for electricity, the expanding penetration of intermittent renewable energies, and the need to respond to emerging needs such as wide usage of electric vehicles. The newly faced and expected challenges and expectations from the grid are forcing drivers to transform the current power system into a smarter grid. Smart grid (SG) is a new paradigm shift that combines the electricity, information, and communication infrastructures to create a more reliable, stable, accessible, flexible, clean, and efficient electric energy system. The SG comprises two main parts, SG infrastructure, and smart applications and operation. SG infrastructure entails a smart power system, information technology (IT), and communication system, while SG applications and operation are categorized into fundamental and emerging areas. The fundamental ones refer to energy management strategies, reliability models, security, privacy, and demand‐side management (DSM). Emerging applications include the wide deployment of electric vehicles and mobile charging and storage stations. All this indicates that SGs are characterized by automated energy generation, delivery, monitoring, and consumption with stakeholders from smart utilities, markets, and customers.

      Initially in this chapter, the principles of current electrical power systems will be briefly discussed. After that, the implications of the transformation trend toward SG architecture will be investigated. Following this, SGs are addressed in greater depth, covering fundamentally diverse concepts and classifications. Lastly, some SG architectures will be highlighted and the future challenges and directions will be addressed.

1.1 Introduction

Today, power grids are being challenged to meet the ever‐growing energy demands of the twenty‐first century. Energy usage is projected to rise by 50% by 2050, according to the Energy Information Administration [1]. Today's grid is an aging infrastructure, combined with the growth of distributed energy resources (DERs), it is therefore more prone to outages and disturbances leading to poor reliability and power quality. These factors present a significant challenge for distributed renewable energy integration to the grid with unidirectional power flow [2]. The current grid is characterized by one‐directional electricity flow, lack of information exchange, centralized bulk generation, lack of flexibility to directly trade in electricity markets, inefficient monitoring and control of the power distribution networks, lack of flexibility and accessibility to new innovative solutions such as flexible loads, accommodating large scale of fluctuating energy resources, electric vehicles wide usage, etc. The SG is designed to tackle all these challenges by integrating and smartly utilizing the electricity, information, and communication infrastructures.

      The SG is the solution to overcome the aforementioned challenges while also responding to the current and future humanity energy expectations. SG's implementation will not only have environmental benefits through high penetration of renewable sources, but will also have significant regional, national, and global impacts related to achieving a more reliable, efficient, and economic energy system. The SG paradigm integrates a variety of modern advanced technologies such as smart sensors and measurements, advanced communication and information, edge computing and control. This paradigm allows a flexible and reliable electricity system with bi‐directional power and information flows [3]. The structures of the SG anticipate and respond to electric system disturbances, optimize asset utilization, and operate efficiently. SG houses all generation and storage options, which hinders the dependency on peak demand back‐up power stations – thus, cutting significant costs related to the generation, transmission, and distribution. Furthermore, SG enables active participation of customers, new products, services, and markets – thus can support the uptake of new industries. SG functions resiliently against attacks and natural disasters, delivers power quality for the digital economy‐ thus, creating new jobs and regenerating the economy at a time of financial crisis. The SG is a power network that contains distributed nodes, which operate under the pervasive control of smart subsystems, so‐called smart microgrids. A microgrid is a small‐scale version of the electric grid, however possessing distributed generation and potentially energy storage (ES). Microgrids can operate in a grid‐connected mode, islanded mode, or in both modes which improve the grid's reliability, controllability, and efficiency. Widespread installations of microgrids enable a faster transformation to the SG paradigm from the current grid infrastructure [4].

1.2 Fundamentals of a Current Electric Power System

The two main characteristics of conventional electrical power systems are: centralized energy generation and unidirectional power delivery systems. This means that electric power is first produced by bulk power generation and then transmitted across the electricity grid to the distribution layer, and finally to the end users. The flow of electricity in the grid is from top (high‐voltage network) to bottom (low‐voltage network). Figure 1.1 shows the three main stages of generation, transmission, and distribution [5]. Those grid elements are briefly explained in the next sub‐sections.

      1.2.1 Electrical Power Generation

Traditional power plants burn the fossil fuel to generate electricity therefore they contribute in significant amount of greenhouse gas emission to the environment. The crucial need to adopt power‐generation approaches that have fewer environmental impacts is an essential requirement for modern power grids, which means moving toward more renewable energy systems. Among renewable energies, sunlight (photovoltaics) is converted into electricity, wind kinetic energy is converted into electricity, water gravitational and kinetic energy is converted to electricity (hydro) [6]. Continuous technology development is used to convert renewable energies into electricity at increased efficiency and lower cost. Therefore, it is essential for the current power grid to efficiently accommodate a constant increase of fluctuating renewable energy sources.

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