Smart Grid

Definition
Smart Grid is an Electrical Grid with Automation, Communication and IT systems that can
monitor power flows from points of generation to points of consumption (even down to appliances
level) and control the power flow or curtail the load to match generation in real time or near real time.
Smart Grids can be achieved by implementing efficient transmission & distribution systems, system
operations, consumer integration and renewable integration. Smart grid solutions helps to monitor,
measure and control power flows in real time that can contribute to identification of losses and
thereby appropriate technical and managerial actions can be taken to arrest the losses.

Features of Smart Grid

Smart grid has several positive features that give direct benefit to consumers:

 Real time monitoring.

 Automated outage management and faster restoration.
 Dynamic pricing mechanisms.
 Incentivize consumers to alter usage during different times of day based on pricing signals.
 Better energy management.
 In-house displays.
 Web portals and mobile apps.
 Track and manage energy usage.
 Opportunities to reduce and conserve electricity etc.

Smart Grid will also facilitate distributed generation, especially the roof top solar generation, by
allowing movement and measurement of energy in both directions using control systems and net
metering that will help “prosumers” i.e. the consumers who both produce and consume electricity, to
safely connect to the grid.

Benefits of Smart Grid Deployments

Several groups of the society are provided with multiple benefits through the Smart Grid
implementations. Such include utility, customers and the regulators while some of the benefits
include:

 Reduction of T&D losses.

 Peak load management, improved QoS and reliability.
 Reduction in power purchase cost.
 Better asset management.
 Increased grid visibility and self-healing grids.
 Renewable integration and accessibility to electricity.
 Increased options such as ToU tariff, DR programs, net metering.
 Satisfied customers and financially sound utilities etc.

Overview of Smart Grid Technology

The smart grid can be defined as a smart electrical network that combines electrical network and
smart digital communication technology. A smart grid has capable of providing electrical power from
multiple and widely distributed sources, like from wind turbines, solar power systems, and perhaps
even plug-in hybrid electric vehicles.

Fig. Overview of Smart Grid Technology

Smart Grid Components

To achieve a modernized smart grid, a wide range of technologies should be developed and must be
implemented. These technologies generally grouped into following key technology areas as discussed
below.

Intelligent Appliances: Intelligent appliances have capable of deciding when to consume energy

based on customer pre-set preferences. This can lead to going away along toward reducing peak loads
which have an impact on electricity generation costs. For example, smart sensors, like temperature
sensor which is used in thermal stations to control the boiler temperature based on predefined
temperature levels.
Smart Power Meters: The smart meters provide two-way communication between power providers
and the end user consumers to automate billing data collections, detect device failures and dispatch
repair crews to the exact location much faster.

Fig. Smart Grid Components

Smart Substations: substations are included monitoring and control non-critical and critical
operational data such as power status, power factor performance, breaker, security, transformer status,
etc. substations are used to transform voltage at several times in many locations, that providing safe
and reliable delivery of energy. Smart substations are also necessary for splitting the path of
electricity flow into many directions. Substations require large and very expensive equipment to
operate, including transformers, switches, capacitor banks, circuit breakers, a network protected relays
and several others.
 Fig. Smart Substations

Super Conducting Cables: These are used to provide long distance power transmission, and
automated monitoring and analysis tools capable of detecting faults itself or even predicting cable and
failures based on real-time data weather, and the outage history.

Super
Fig. Conducting Cables

Integrated communications: The key to a smart grid technology is integrated communications. It

must be as fast as enough to real-time needs of the system. Depending upon the need, Many different
technologies are used in smart grid communication like Programmable Logic Controller (PLC),
wireless, cellular, SCADA (Supervisory Control and Data Acquisition), and BPL.Key Considerations
for Integrated Communication.
 Fig. SCADA
Key Considerations for Integrated Communication
 Ease of deployment
 Latency
 Standards
 Data carrying capacity
 Secure
 Network coverage capability

Fig. Key Considerations for Integrated Communication

Phasor Measurement Units (PMU):

  This is used to measure the electrical waves on an electricity grid using a common time
source for synchronization. The time synchronizer allows synchronized real-time measurements of
multiple remote measurement points on the grid.

Benefits of Smart Grid

 Integrate isolated technologies: smart grid enables better energy management
 Protective management of electrical network during emergency situation
 Better demand, supply/ demand response
 Better power quality
 Reduce carbon emissions
 Increased demand for energy: Requires more complex and critical solutions with better
energy management
 Renewables Integration

Disadvantages of Smart Grid

Privacy Problems

The biggest concern is Security in a smart grid system. Grid system uses some smart meters,
which are automated and provides communication between power provider and customer. Here some
type of the smart meters can be easily hacked and they may control the power supply of a single
building or an entire neighborhood.

Grid Volatility

Smart Grid network has much intelligence at its edges; that is, at the entry point and at the end
user’s meter. But the grid has insufficient intelligence in the middle, governing the switching
functions. This lack of integrated development makes the grid a volatile network. Engineering
resources have been poured into power generation and consumer energy consumption, which are the
edges of the network. However, if too many nodes are added to the network before developing the
software intelligence to control it, the conditions will lead to a volatile smart grid.

Applications of Smart Grid

Smart grid plays an important role in modern smart technologies. Following are the most
common applications of smart grid technology.

    Future Applications and Services              Real Time Market

Business and customer care
Smart charging of PHEVs and V2G
Distributed generation and storage
Grid optimization
 
 
Application data flow to/ from end-user energy
management systems
Application data flow for PHEVs
Monitoring of distributed assets
Self-healing grid: fault protection, outage
management, dynamic control of voltage,
weather data integration, centralized capacitor
bank control, distribution and substation
automation, advanced sensing, automated feeder
reconfiguration.
Advanced demand maintenance and demand
response, load forecasting, and shifting.
Demand response

Provides remote meter reading, theft detection,

customer prepay, mobile workforce
AMI (Advanced metering infrastructure) management

Software Requirements

Keil compiler, Language: Embedded C or Assembly

Hardware Requirements

Pre-programed Microcontroller (AT89C51/S52), Energy Meter, Max232, Resistors, GSM

module, LCD (16×2), LED, Crystal Oscillator, Capacitors, Diodes, Transformer, Regulator, and
Load.

IOT  Based Electricity Energy Meter Reading Through Internet

The main objective of this project is to develop an IOT (internet of things) based energy
meter reading displayed for units consumed and cost for consumption, over the internet in the chart
and gauge format. In this project, we had taken a digital energy meter whose blinking LED signal is
interfaced to a microcontroller of 8051 families through an LDR. Per 1 unit, The blinking LED
flashes 3200 times. The LDR sensor gives an interrupt to the programmed microcontroller, at each
time of the meter LED flashes.
 Fig. Block Diagram of Smart Energy Meter IoT-based Energy Meter

The microcontroller takes this reading and displays it on an LCD duly interfaced to the
microcontroller. This reading of the energy meter is also sent to a GSM modem being fed by the
microcontroller via level shifter IC and RS232 link. A SIM used in the modem being internet enabled
transmits the data directly to a dedicated web page for display or to the customer mobile phone,
anywhere in the world in multi-level graphical format.
 Internet of Things IoT

What is an Internet of Things?

Sometimes, the term IoT (Internet of Things) referred to as the IoO (Internet of Objects), will
change everything including ourselves. This may look like a bold statement, but consider the effect
the Internet previously has had in different fields namely communications, education, science,
business, humanity, government. Clearly, the Internet is one of the most significant and powerful
creations in the history of humanity. Now consider that, it signifies the next development of the
Internet, taking a vast leap in its capacity to analyze, gather, and distribute data that we can go into
knowledge, information, and, eventually, wisdom.

Fig. Internet of Things

Features of IOT

The important features of Internet of Things involve connectivity, artificial intelligence, active

engagement, sensors and the use of small devices. A brief review about the IoT features is discussed
below.
AI – Internet of things basically makes almost anything “smart”, meaning it improves every part of
life with the power of networks, data collection, and artificial intelligence algorithms.
Small Devices – Devices as projected have become reduced, inexpensive, and more powerful over
time. Internet of Things exploits purpose-constructed small devices to carry its precision, versatility
and scalability.
Sensors – Internet of Things drops its difference without sensors. They perform as major instruments
which change IoT from a standard passive n/w of devices into an active system accomplished by real-
world integration.
Connectivity – New empowering technologies for networking, and precisely Internet of Things
networking, mean netwroks are no longer completely tied to main providers. Networks can occur on a
much cheaper and smaller scale while still being practical. IoT creates these tiny networks between its
system devices.
Active Engagement –Nowadays communication with associated technology happens through passive
engagement. IoT presents a new model for active products, content, or service engagement.

Fig. Features of IOT

IOT Hardware

The hardware of the IoT mainly includes IoT-sensors, IoT- wearable electronics and standard devices
which are discussed below.
IoT − Sensors

The most significant part in Internet of Things might be a sensor. These devices comprise of RF
modules, energy modules, power management modules, and sensing modules. RF modules used to
accomplish communications through their signal processing, ZigBee, radio transceiver WiFi,
Bluetooth, BAW, etc.

The sensing element manages detecting through mixed, active and passive measurement devices.
Some of the measurement devices lists used in Internet of Things are

 Accelerometers-Temperature Sensors
 Gyroscopes-Image Sensors
 Acoustic Sensors-Light Sensors
 Pressure Sensors-Gas RFID Sensors
 Magnetometers-Proximity Sensors
 Humidity Sensors-Micro flow Sensors

Standard Devices of IoT

The cell phone, desktop and tablet remain essential parts of the Internet of Things as the command
center and remotes.

 The desktop offers the user with the maximum level of control over the system and its
settings.
 The tablet affords access to the key structures of the system in a way approaching the desktop,
and also performs as a remote.
 The cell phone permits some important settings alteration and also gives remote functionality.
 Other key linked devices comprise standard network devices such as switches and routers.

Wearable Devices of IoT

Wearable electronic devices are nothing but small devices worn on the neck, head, arms, torso, and
also the feet. Current smart wearable devices of IoT mainly include the following
 Fig. Wearable Devices of IoT
 Head – Helmets, glasses
 Neck – Jewelry, collars
 Arm – Watches, wristbands, rings
 Torso – Clothing, backpacks
 Feet – Socks, shoes

Advantages of Internet of Things

The advantages of IoT span across every area of lifestyle and business. Here is a list of some of the
advantages that IoT has to offer:

 Improved Customer Engagement

 Technology Optimization
 Reduced Waste
 Enhanced Data Collection

Disadvantages of Internet of Things

Though IoT offers an extraordinary set of benefits, it also presents an important set of challenges.
Here is a list of some its major disadvantages

 Security
 Privacy
 Complexity
 Flexibility
 Compliance
Internet of Things Applications

From home automation and building to wearables, the IoT (Internet of Things) traces every surface of
our lives. Unnecessary to say, that the current publicity around the Internet of Things is huge. It looks
like every day a new corporation announces some IoT supported devices. We have recognized some
applications for the IoT with potential for exponential growth.

Fig. IoT Applications

Building & Home Automation

From improving security to decreasing energy and maintenance costs, there are many companies
offers a wide range of advanced IoT technologies for controlling and monitoring of smart homes and
intelligent buildings

 Access control
 Light & temperature control
 Energy optimization
 Predictive maintenance
 Connected appliances.
Smart Cities

There are many industries, reducing the cost and resource consumption of IoT products for
surveillance, lighting, centralized and also integrated system control.

 Residential E-meters
 Smart street lights
 Pipeline leak detection
 Traffic control
 Surveillance cameras
 Centralized and integrated system control

Wearables

With the broadest range in the industry, that provides highly competent low power solutions for the
wearables market.

 Entertainment
 Fitness
 Smart Watch
 Location and Tracking

Health care

Many industries are shaping technology to enhance the accessibility and the quality of digital products
that are transforming the health and also fitness industries.

 Remote monitoring
 Ambulance telemetry
 Drug tracking
 Hospital asset tracking
 Access control
 Predictive maintenance

Smart Manufacturing

The benefits of many industrial IoT products comprise tools, hardware and software that ease and
accelerate design time for the resulting smart developed application.

 Flow Optimization
 Real Time Inventory
 Asset Tracking
 Employee Safety
 Predictive Maintenance
 Firmware Updates
Automotive

From headlights to the tail lights and all systems in between, many industries offers a wide range of
advanced technologies for the current automobile.

 Infotainment
 Wire Replacement
 Telemetry
 Predictive Maintenance
 Car to Car and Car to Infrastructure
 Locational Marginal Prices (LMPs)

 Introduction 

The Locational Marginal Pricing (LMP) mechanism is one of the most commonly employed
tools for market settlement in the deregulated power system environment. The Locational Marginal
Price (LMP) at a bus signifies the cost of supplying the next increment of load at that bus. The LMP is
the sum of supplying energy marginal cost, cost of losses due to the increment and transmission
congestion cost, if any, arising from the increment. and congestion, if any, arising from that
increment. The LMP is the true indicator of marginal pricing of energy. The calculation of LMPs
implicitly involves congestion management. Compared to other approaches of congestion
management, the LMP approach has found very wide acceptance throughout the world due to its
inherent efficiency in the network capacity allocation. Many of the successfully running power
markets like PJM, NYISO, ISO-NE, CAISO, ERCOT, MISO and NEMCO have already implemented
LMP mechanism in their systems, whereas other markets are now evolving towards locational
marginal pricing. The LMP mechanism was first invented by Dr. William Hogan in 1992 [1], and
introduced at Pennsylvania-New Jersey-Maryland (PJM) ISO. However, the basis of the LMP
mechanism is the theory of spot pricing proposed by Schweppe et al.[2]. The distinguished feature of
the LMP mechanism is that the entire course of power scheduling (pool as well as bilateral
transactions) is done centrally, recognizing system conditions and constraints arising thereof. The
underlying principle of locational marginal pricing is that the energy price varies from one location to
another location in the presence of congestion and loss in the system. 

 Fundamentals of Locational Marginal Pricing (LMP)

Locational marginal pricing is a centralized process of market clearing, where it is the
responsibility of the Independent System Operator (ISO) to determine the power dispatch schedules
as well as the energy prices. Unlike system uniform pricing (i.e., unconstrained bidding) approach,
network limits have to be considered while scheduling generators, loads and bilateral transactions.
Since network constraints are considered in the market clearing process, it is not possible to
determine the market equilibrium simply by the intersection of a cumulative supply curve and a
cumulative demand curve. Instead, the power dispatch schedules and energy prices are calculated
through an optimization approach consisting of network and power flow related constraints.
 
An LMP market may be a single settlement or two settlement market. In case of a single
settlement market, scheduling is done only in day-ahead, whereas both day-ahead and real-time
scheduling is done for a two settlement market. A real-time market is essentially within the hour
market. The real-time scheduling and settlement are further done in different time blocks. For
example, in PJM, real-time scheduling is done in 5- minute time blocks. The real-time scheduling
starts with the state-estimation solution at the beginning of each time block. The state-estimation
solution gives the actual injection by each generator and actual withdrawal by each load at the
current point of time. It should be noted that the above time frames of settlement are not strict and
change depending upon the market needs.
 
Apart from the offers from generators and bids from the loads, bids are also invited from the
bilateral transactions under locational marginal pricing. These bids are called up to network usage
charge bids. An up to network usage charge bid indicates the price that the concerned entity is ready
to pay at maximum for the scheduled quantity of its transaction. Similar to a load bid curve, a
transaction bid curve is also downward sloping. Apart from bids and offers, self-scheduling is also
allowed in some markets like PJM. Self-scheduling means showing price-unresponsiveness or price-
insensitivity. A self-scheduled generation, load or transaction is alternatively called as an inelastic
generation, load or transaction, respectively. The power dispatch schedules are obtained by
maximizing social welfare function within the network limits. The energy price at a location is
defined as the rate decrease of optimal social welfare with respect to the fixed load increase at that
location. These prices are the locational marginal prices. Generators are paid and loads have to pay
the LMPs at the corresponding locations. For a bilateral transaction, the market player has to pay a
network usage charge depending upon the LMP difference between its sink and source locations.
 
The bid and offer curves submitted by market participants may be piecewise or purely linear curves.
In case all the bid and offer curves are purely linear, the social welfare function W(P) can be
formulated as follows:

.................
..........................................................(1)
 
where,   .................................................................................................
(2)
 
ηd......................Number of load bids
ηg......................Number of generation offers
η.b.....................Number of transaction bids
Pd......................Column vector containing load bid variables
Pg......................Column vector containing generation offer variables
Pb......................Column vector containing transaction bid variables
 ........... Bid price as a function of quantity for the k th load bid
  ........... Offer price as a function of quantity for the k th generation offer
 ............ Bid price as a function of quantity for the kth transaction bid
 
For zero slope bid and offer curves, the expression of welfare function is simply reduced to the
following,
 

 .............................................................................(3)
 
In the absence of price-sensitive loads and transaction, the objective function can be alternatively
defined as minimization of generation cost C(Pg), where,
 

 .......................................................................................................(4)
 
As before, for zero slope offer curves, the expression of generation cost is reduced to the following:
 

………...............................................................................................................(5)
 
It should be noted that when the objective function of the market clearing problem is defined as
minimization of generation cost, the definition of LMP is also changed as the rate of increase of
optimal generation cost with respect to the fixed load increase at a location.
 
Now, consider the case that the generators, loads and transactions submit piecewise linear offer and
bid curves, respectively. Under such a situation, the social welfare function is to be formed by
considering each linear segment as a separate offer or bid. For example, consider the generation offer
curve shown in Fig. 1. This offer curve is equivalent to the set of three individual offers as following:
 
 
Fig: Generation offer curve
 
Offer 1: Offered amount = 70 MW,
Offer 2: Offered amount = 70 MW,
Offer 3: Offered amount = 50 MW,
 
It should be noted that from the point of view of scheduling, the social welfare function is nothing
more than a simple mathematical function that has been devised to reach efficient market
equilibrium. Market equilibrium is said to be efficient if the following conditions hold.
 
 Each selected generation is paid at least its offer price.
 The offer price associated with an unselected generation is higher than the energy price at
corresponding location.
 Each selected load or transaction has to pay at most its bid price.
 The bid price associated with an unselected load is lower than the energy price at
corresponding location.
 The bid price associated with an unselected transaction is lower than the LMP difference
between the corresponding locations.
 It is not possible to increase the output of a generator at a certain location, and
simultaneously increase the consumptions at some other location/s without causing fall of at
least one load node energy price below the gener¬ation node energy price or creating
network infeasibility, and vice versa.
 It is not possible to increase the quantity of a transaction without causing network
 infeasibility or making its network usage charge negative.

Zonal and Nodal LMP

 
Locational marginal pricing is done either on nodal basis or zonal basis [3]. For a nodal
market, a location is defined by a node or a load zone or a generation hub and the impact of each
nodal injection on line flows is individually considered in the power dispatch problem. The dispatch
solution has to respect the flow limit of each line. As far as the definitions of load zone and
generation hub are concerned, they are fundamentally similar. A load zone or a generation hub is
basically defined by a set of nodes and a load or generation distribution vector, respectively. In order
to calculate the line flows, the total load on a load zone is distributed over its constituent nodes by
means of the distribution vector assigned to it. The total generation over a hub is distributed in the
same fashion. However, for a load zone, the total load on it is also same as the sum of the total load
on each of its constituent nodes. This is not true for a generation hub. Additionally, the scheduling
and metering for a load zone is always done in the aggregation level by assuming that the total load
on this load zone naturally remains distributed in a fixed ratio. In case of a generation hub, the
scheduling and metering, in the end, is always done at the nodal level. It is the responsibility of the
entity, requesting a transaction from this hub, to maintain the injection pattern specified by the
generation distribution vector. Each individual load within a load zone has to pay the load zone price
only, whereas each individual generation within a hub is paid the LMP of the corresponding node.
The objectives behind defining load zones are to reduce the spatial price variation and to ease the
financial settlement. On the contrary, the objective behind defining hubs is to maintain consistency
with the previous (i.e., before nodal pricing) bilateral contractual agreements.
 
In case of a zonal market, the system is divided into multiple transmission zones and each of
these transmission zones defines a particular location. A transmission zone is basically a set of nodes
and lines that is modeled like a single node in the dispatch problem. Only the inter-zonal line flow
limits are considered during the power scheduling. The inter-zonal line flows are determined by the
zonal sensitivity factors. The main technical challenge with zonal pricing is to appropriately divide
the system into transmission zones so that zonal sensitivity factors may exist. For this, the branch-
node sensitivity factors relating any inter-zonal line should be almost same for all the nodes
constituting a transmission zone.
 

Additional Aspects of LMP Mechanism

 
The advantage of locational marginal pricing is multi kinds. First, this kind of energy pricing
can generate useful price signals to identify suitable locations for building new generators, load
centers and transmission facilities. For example, if the LMP at a certain location continuously shows
a higher value, it gives an initial indication that this location may be a suitable place for building new
generators. At the same time, penalizing each bilateral contract with a location dependent network
usage charge applies a strong financial force on it, making it implicitly care for the congestion in the
transmission network. The pool prices also recognize the system limits. Unlike system pricing
approach, the possibility of administrative transmission load relief (TLR) thus becomes very small.
The need for TLR arises only during very rare occasions when the self-scheduled generations, loads
and transactions load the system beyond its capacity such that no solution of the dispatch problem
exists. Moreover, due to a joint optimization based dispatch calculation, trans¬mission capacities are
allocated in optimal way to the energy market participants as per their needs. The less the bid price
of a generation bid the more the amount of it would get selected. Similarly, the more the bid price of
a load or transaction bid the more the amount of it would get selected. The capacity allocation occurs
in optimal way due to measuring the relative needs of all the market part at the same time by a single
and non-profit making entity. However, this feature is not available in the physical transmission right
methodology.

LMP Formulation and Implementation

Calculation of LMP in a market environment involves solving an optimization problem. LMP
is the by-product of the solution to this optimization problem. In this section, we shall discuss
various models existing in literature to calculate LMP.
 
The LMP models existing in literature can be broadly categorized into two classes, namely,
the ACOPF model and the DCOPF model. The ACOPF model uses the AC formulation to represent
power flow and thus can accurately represent the line flows and loss. On the contrary, the DCOPF
models are based upon DC power flow approximation and, therefore, are less accurate. The DCOPF
model can be lossless or loss compensated. In case of a lossless model, the network loss is ignored at
the time of LMP calculation. Even though ACOPF provides the most accurate LMP, it is quite
complex to model its constraints, and cannot be used for real time applications. Sometimes,
obtaining converged solution for very large systems becomes difficult. However, DCOPF is not
plagued by the convergence problem due to its simplicity. Solution of DCOPF can be obtained with
a single run of Linear Programming (LP) because of the linearity assumption. However, due to these
assumptions, the LMP obtained is not very accurate. The choice between ACOPF and DCOPF is a
trade-off between accuracy and speed of convergence. Some advantages of DCOPF over ACOPF are
as follows:
 
1. Simplicity
2. Speed of convergence
3. Availability of LMP components

 
Among the two major classes of LMP models, the ACOPF model is prone to lack financial
consistency in general. On the contrary, financial consistency can be obtained in a DCOPF model.
Moreover, without significant loss of accuracy, the DCOPF models are much simpler that the
ACOPF models. As a result most of the LMP markets employ DCOPF models for the purpose of
market clearing. Currently, NYISO is the only market that employs an ACOPF model for calculating
locational marginal prices.