SMART GRID

HANDBOOK
VOLUME 3

Editors-in-Chief

Chen-Ching Liu

Washington State University, USA

Stephen McArthur
University of Strathclyde, UK

Seung-Jae Lee
Myongji University, South Korea

Wiley
xxxiv Contents

Volume 3

List of Contributors xlvii

Preface lv

Part IV SMART METERS AND CUSTOMERS 1117

56 Smart Meters and Residential Customers 1119

Sarah J. Darby
Introduction 1119

Functional Specification 1120

Context for Smart Metering: Geographical, Social, Market, and Regulatory Conditions 1121

Geography 1121

Social Conditions and Expectations 1121

Market and Regulatory Conditions 1122
Potential Customer Benefits from Smart Metering 1123
Feedback and Energy Management 1124

Improved Energy Advice Services and New Business Models 1126

Support for Voluntary Demand Response and Remote Load Management 1126
Potential Risks and Disbenefits 1127

Summary 1127

Acknowledgment 1130
Related Articles 1130
References 1131

57 Meter Data Collection, Management, and Analysis 1133

Tim Wolf
The Smart Meter: A Foundational Element 1133

Grid Sensors 1134

Tamper Detection and Notification 1135

Remote Connect/Disconnect 1135

Home Area Network Communications 1135

Smart Meter Communication 1136

Evolution of Smart Meter Network Architecture and Topology 1136
Data Concentrator-Based Networks 1137

Distributed Data Concentrator Networks 1137

Data Router-Based Networks 1137

Communication Types 1138

Powerline Carrier (PLC) Communication 1138

Radio Frequency (RF) Communications 1139

Future of Data-Routed Networks 1140

Security Challenges and Solutions 1140

Multilayered Security Approach 1141

A Strong Security Foundation 1141
Contents XXXV

Managing all that Data 1142

Meter Data Management 1142

Smart Metering Rollout with Legacy CIS 1142

New CIS with Existing AMR/AMI 1143

Synchronizing Master Data 1144

Delivering Bill-Ready Meter Data 1144

Issuing Commands to the AMI System 1144

Key Meter Data-Management System Features 1145

Collection System Integration 1146

Interval Data Management 1146

Versioned Data Storage 1148

Two- Way Communications between AMI and CIS 1148

Platform to Enable Other AMI Applications 1148

Revenue Protection and Theft Analysis 1148

End Customer Usage Analysis and Data Presentment 1149

Load Curtailment and Demand Response 1149

Putting Smart Meters and the Data to Work 1149

Managing Peak Demand 1149

Demand Response and Dynamic Pricing 1150

Demand Response Components 1150

Design 1150

Forecasting 1151

Execution 1151

Settlement 1151

Evaluation 1152

Empowerment 1152

Dealing with the Data Explosion 1152

Distributed Generation 1153

Renewable Energy 1153

Distribution Automation 1154

Big Data 1154

Microgrids 1155

Consumer Engagement and Energy Efficiency 1155

Analytics and Action at the Edge 1156

From Smart Grid to Smart Cities to IOT 1156

The Opportunity 1157

Looking to the Future 1157

Related Articles 1157

References 1158

58 Utilization and Customer Behavior: Smart Choices for the Smart Grid 1159
Katrina Jessoe, David Rapson, and Jeremy B. Smith

Introduction 1159

A Methodological Primer 1161

xxx vi Contents

The Role of Price in ResidentialElectricity Choices 1163

Types of Time-
Varying Pricing 1163
Evidence on the Effectiveness of Time-Varying Pricing 1165
The Role of Behavioral Factors in Residential Electricity Choices 1166
Inattention as an Impediment to Customer Response 1166
Customer Response to Social Comparisons 1167

Comparing Behavioral Interventions and Price-Based Policies 1168

Summary 1170
Conclusions 1170
Related Articles 1171
References 1171

59 Cyber Security of Smart Meters 1175

Abel Sanchez,Depeng Li, Zeyar Aung, and John R. Williams

Introduction 1175

Background 1176
AMI Communication Model 1176

Security Assumption and Scope 1177

Selection of Authentication Schemes I 111

Cryptographic Primitives 1179

Authentication Solutions 1179

System Model 1179

Batch Verification 1179

Signature Amortization for Package Blocks 1181

MST-Based Signature Aggregation (MST-SA) 1183

Integrated Authentication Scheme 1185

Fault Diagnosis Algorithms 1186
Fault Diagnosis Algorithm for Batch Verification 1186
Fault Diagnosis A Igorithm for Signature Aggregation 1187

Integrated Fault Diagnosis Algorithm 1188

Performance Evaluation 1188
Fault Diagnosis Algorithm for Signature Aggregation 1188

Performance Evaluation for Fault Diagnosis Algorithm 1190

Experimental Results and Analyses 1191

Analysis 1191
Related Articles 1191
Conclusions 1192
References 1193
Further Reading 1194

60 Demand Response at Distribution Grids: Exploiting Flexible Power Electronics

Interfaces 1195

Zach Taylor, Hamed Mohsenian-Rad, and Ali Davoudi

Introduction 1195
Overview of Power Electronics Interfaces 1196

Controllability as a Resource for Power Electronics Interfaces 1198

Contents xxxvii

New Demand Response Potentials in Distribution Networks 1199

AC Distribution Networks 1199
DC Distribution Networks 1200
Case Study: Demand Response in DC Distribution Networks 1201

System Model 1202

Power Electronics Loads 1203
Optimal Demand Response 1204
Numerical Examples 1206
Conclusions 1208

Acknowledgment 1209
Related Articles 1209
References 1210

61 Operational Experience of Microgrids 1213

Young-Jun Choi, In-Sun Choi, Hak-Ju Lee, and Woo-Kyu Chae

Overview of the Microgrid System 1213
Structure and Components of Microgrid 1215
Structure of Microgrid 1215
Components of a Microgrid 1215
Core Technology of Microgrid 1218
Microgrid Engineering Technology 1219

Microgrid Operation Technology 1220

Reliability Technology 1220

Microgrid Configuration 1223

Classification by Configuration Method 1223

Microgrid System Case Studies 1225

Case Study of Grid- Connected Microgrid Systems 1225
Case Study on Off-Grid Microgrid System 1229
Conclusions 1232
Related Articles 1233

References 1233

62 Demand-Side Response/Home Energy Management 1235

Hideo Ishii, Wataru Hirohashi, Masataka Mitsuoka, and Yasuhiro Hayashi
Introduction 1235
General Aspects of HEMS 1236
HEMS Classification 1237

Classification by Control Purpose 1237

Classification of HEMS by Physical Form: Location of the Control Algorithm 1238
HEMS Elemental Technologies 1239
Electrical Power Measurement Devices 1239

HAN Communication Standards 1241

Typical In-home HDA, Distributed Energy Resources, and Storage Devices 1243
Practical Applications of HEMS 1244

Waseda EMS Center 1244

Fundamental Behavior of Common HEMS Applications 1245
Electric Energy Control 1246
xxxviii Contents

Instantaneous Power Control 1246

Renewable Energy Cooperative Management 1248

Islanding Operation Control 1249

Collaboration with External Services 1249

Future Prospects Beyond Energy Issues 1251
Related Articles 1251
References 1251
Further Reading 1252

63 Demand Response 1253

Robert G. Pratt and Jason C. Fuller

Introduction to Demand Response 1253

Value of Demand Response 1254

The Importance of Peak Demand as a Driver for Demand Response 1254

Reducing Wholesale Electricity Production or Purchase Costs 1254

Reducing the Needfor Generation Reserve to Supply Ancillary Services 1256

Mitigating Impacts from the Intermittency of Renewable Generation 1259

Analyzing Demand Response 1260

Loads 1261

Physics of Demand Response 1266

Analyzing Demand Response 1272

Demand Response Programs 1276
Historical Perspective 1276

Contracted Response Programs 1277

Price-Based and Incentive-Based Demand Response Programs 1281

Benefits and Infrastructure Requirements of Various Types of Demand Response

Programs 1289
Related Articles 1291
References 1291

64 Standards, Security, and Smart Meters 1293

Michael Stuber

Introduction 1293
B ackground 1293

The Generic Smart Meter 1293

Standards for the Generic Smart Meter 1294

Security 1296
The Standards Development Process 1298

Organizations of Note 1299

Standards Landscape 1300

Field Area Network/Neighborhood Area Network 1300

Home Area Network 1303

Summary and Questions 1305

Related Articles 1306
Further Reading 1306
Contents xxxix

65 Factors Influencing Adoption of Smart Meters 1307

Diana Moneta and Giuseppe Mauri
Introduction 1307
Drivers 1307
Benefits 1310
Functionalities 1312
Basic Functions 1312
Advanced and Optional Functions 1313
Architecture and Technology 1314
Architecture 1315
Technologies 1315
Summary of Technologies Field Experiences
-
1318
Cyber Security 1320
Privacy and Customer Involvement 1321
The "Big Data" Challenge 1321
Current Implementation and Perspectives 1321

Europe 1321
A Pioneering Rollout: Italy 1323
Other Countries 1324
Lessons Learned and Perspectives 1325
Related Articles 1326
References 1326

66 Smart Meter Health and Exposure Assessment Research 1329

Robert G. Olsen, Robert Kavet, and Richard A. Tell

Introduction 1329
Basics 1332
Radiofrequency Fields 1332
Decibels, dB 1336
Interaction ofRF with the Body 1336
RF Exposure Guidelines and Standards 1337
Time Averaging 1339
Smart Meters: General Description 1340
Smart Meter Studies 1341
RF Field Patterns 1341
RF Field Profiles 1342
Vertical Profile 1345
Duty Cycle 1346
Indoor Measurements 1348
Fine Structure of a Pulsed Signal 1348
Dosimetry: Calculation of Specific Absorption Rate (SAR) 1349
Interaction of Smart Meter Emissions with Cardiac Implantable Electronic Devices
(CIED) 1350
Summary: Combining Factors to Estimate Maximum Possible Exposures 1351

RF Health Research 1352

References 1355
xl Contents

Part V INFORMATION AND COMMUNICATIONS TECHNOLOGY 1357

67 New Approaches to Interoperability 1359

Ronald F. Ambrosio

Introduction 1359
The Interoperability Constitution 1360
What Is the Constitution? 1360

Framing the Debate and Establishing Consensus 1360

Constitution Scope 13 60
Attributes of the Statementsof Principle 1360
Constitution Statements of Principle 1361
The Interoperability Context-Setting Framework 1365
Setting the Stage for Development of Systems and Standards 1365

System Integration Philosophy 1369

High-Level Categorization 1372

Cross-Cutting Issues 1377

Conclusions 1383
Related Articles 1383
References 1384

68 Smart Grid Interoperability Standards 1385

Erich W. Gunther

What is a Standard? 1385

Specifications and Requirements 1385

Standards 1387
How to Go Beyond Standardization 1388

Key Smart Grid Standards 1389

IEC 61968/61870 Common Information Model (CIM) 1390
IEC 61850 1392
Green Button 1393

OpenFMB 1395
Conclusions 1398
Related Articles 1399

69 Application of Distributed Intelligence to Industrial Demand Response 1401

Chun S. Lai, Fangyuan Xu, Malcolm McCulloch, and Loi L. Lai

Introduction 1401

Multiagent Base Multimicrogrid System 1403

Case Study: Agent-Based Demand Response for Industrial Consumers 1404
Introduction 1404
Framework ofActive Time-Based (ATB) Demand Response 1406

Target Industry Modeling with Toll Timing Effect in ATB Demand Response 1409
Numerical Case Study of ATB Demand Response on Cement Manufacturing 1415
Conclusions 1421
Acknowledgments 1421
References 1421
Contents xli

70 Industry Practice and Operational Experience of ICT 1423

Charlie Arteaga

Introduction 1423
Challenges in Deploying Smart Grid Communications Networks 1424

Many Network Options 1424

Security Challenges 1427

Regulatory Drivers 1427

Siloed Approach to Smart Grid Communications Networks Deployments 1428
Massive Transformation of Telecom Networks 1429
Lessons Learned from Smart Grid Communications Networks Deployments 1429
Recommended Steps for a Successful Deployment of a Smart Grid Communications
Network 1430

Summary and Conclusions 1431

Related Articles 1431
References 1432

71 Transactive Energy Systems 1433

Mark Knight
Introduction 1433
Back to the Future 1435
Transformation Requires Flexibility 1436

Variability and Intermittent Resources 1436

GWAC Transactive Energy Definition 1437
Operating the Grid 1438

Economic/Market Context 1439

Grid Control Systems Context 1440
Choosing to Act 1441
Classification of Transactive Energy Systems 1441
Transactive Energy Principles 1441

Guiding Architectural Principles 1442

Transactive Energy System Attributes 1442

Layers of Transactive Energy 1444

Customer Evolution and Value Streams 1447

Adaptive Business Strategies 1449

Business Value Creation and Capture 1449
Business Models 1450

Multi Agent Coordination 1454

The Impact of Transactive Energy Systems 1454

Summary 1456
Acknowledgments 1457
Related Articles 1457
References 1458

72 Physical Hardware-in-the-Loop Modeling and Simulation 1459

Andrew Roscoe, Efren Guillo-Sansano, and Graeme Burt

Introduction -

Concepts and Benefits 1459

xlii Contents

Real-Time Simulation Platforms for HIL Testing 1463

®
The RTDS Simulator 1463
The OPAL-RT Environment 1464

Typhoon Simulators 1466

Secondary Hardware-in-the-Loop Testing 1466

Assessment of Protection Device Responses to Simulated or Captured Events 1467

Rapid Controller Prototyping 1467

Example Application: CHIL Testing of Drive System Controller 1469

Example Application: HVDC Controller Design and Verification 1470

Primary (or Power) Hardware-in-the-Loop (PHIL) Testing 1471

Dealing with Simulation and Interface Loop Delay 1473

Interface Algorithms for PHIL 1474

Interface Compensation 1475

Switched-Mode Voltage-Source Amplifiers 1476

Analog Voltage-Source Amplifiers 1478

Synchronous Generator Interface 1479

Example of a Modern PHIL Installation 1480

Solar Panel Emulation and Solar PV Converter Testing 1481

Systems-in-the-Loop Testing Capability 1482

Closing Remarks 1483

Acknowledgments 1484
List of Abbreviations 1484
Related Articles 1485
References 1485

73 Data Analytics for Transmission and Distribution 1487

Victoria M. Catterson and Stephen D. J. McArthur

Introduction 1487

Enhancing Transmission and Distribution Applications with Data Analytics 1488

Improved Diagnostics 1488

Dynamic Plant
Ratings 1490
Online Prognostics 1490
Network Management and Control 1491

Enabling Technologies for Analytics 1492

Data Science 1492

Intelligent Systems 1494

Big Data 1494

Case Studies of Analytics in Practice 1495
Data Analyticsfor SCADA and Protection Performance Analysis 1495
Data Analytics for Diagnostics of Pole-Mounted Autoreclosers 1496
Data Analyticsfor Circuit Breaker Diagnostics 1497

Data Analytics for Circuit Breaker Prognostics 1498

Data Analyticsfor Transformer Diagnostics 1498
Data Analytics for Transformer Prognostics 1501
Contents xliii

Conclusions 1503
Related Articles 1503

References 1504

74 System-Level Simulation for Future Smart Grids 1507

Jinjun Xiong
Introduction 1507

A Configurable and Scalable Multiscenario Multiagent Simulation Framework 1508

Characteristics of a System-Level Simulation Tool 1510

Key Technology Innovations Required 1512

Existing Simulation Frameworks Explained 1520

GridLab-D 1521

Mosaik 1522
Discussion and Conclusions 1523

Related Articles 1524

References 1524

Part VI SOCIO-ECONOMIC ISSUES 1527

75 The Socio-Economics of the Smart Grid An Introduction 1529

-
Michael G. Pollitt

General Public Policy Issues Raised by Smart Grids 1530

Smarter B2C Transactions Raise Additional Public Policy Questions 1530

Toward a Cost-Benefit of Smart Grid Investments 1531

Market Design in the Smart Grid 1532

Ownership and Regulation 1533

System Operators are the Real-Time Regulators of the System 1534

Conclusions 1534

Acknowledgment 1535

References 1535

76 Data Privacy and Social Acceptance of Smart Meters 1537

Marta Rocha

Introduction 1537

Background on Smart Meters 1538

Consumers: Social Acceptance and Privacy 1539

Market: Privacy Issues and Competition 1541

Regulation and Privacy Policy 1541

General Overview on Data Regulation 1542

Legal Framework on the Privacy of Smart Meter Data 1542

Conclusions 1544

References 1544
xliv Contents

77 Cost-Benefit Analysis of Smart Connections of Renewable Distributed Generation

Projects: A Guide 1547
Karim L. Anaya
Introduction 1547
About the Project Investment Evaluation and Local Context 1548

Regulatory Context 1548

Commercial Arrangements 1549
The Cost-Benefit Analysis Methodology 1550

Empirical Example 1550

Case Studies 1553

Overview of the Flexible Plug and Play (FPP) Project 1553

Case Study Description 1554
AdditionalAssumptions and Considerations 1554

Cost-BenefitAnalysis Results 1555

Final Remarks 1556

Acknowledgments 1556

Appendix 1: List of Variables and Formulas 1557

Related Articles 1558
References 1558

78 Impact on Electricity Markets 1561

Richard Green and Robert Webb

Introduction 1561

An Economic View of the Smart Grid 1562

Modeling the Benefits of Demand Response 1564

Impact on Markets for Ancillary Services 1568

Implications for Market Structure and Design 1569

Barriers to Implementation 1570
Conclusions 1571

Acknowledgments 1572
References 1572

79 Behavioral Aspects of Smart Meters 1575

Michelle Baddeley

Introduction 1575

Background and Trends 1576

What Can Smart Meters Do ? 1576
Constraints 1576
Trends in Smart Meter Uptake 1577
A Behavioral Economics Framework 1577
Smart Meters, Imperfect Information, and Transaction Costs 1578

Insightsfrom Behavioral Economics: Heuristics and Biases 1579

Insightsfrom Behavioral Economics: Social Influences and Social Psychology 1581

Behavioral Approaches to Time and Discounting: Smart Meters, Planning and Habits 1582
Behavioral Economics: Summary of Implicationsfor Smart Meter Design 1583
Contents xlv

Conclusions 1584
Related Articles 1584
References 1584

80 Market Design in the Smart Grid 1587

Thomas Greve

Introduction 1587
The Spot Market and Capacity Market 1588
Current Electricity Market 1589
Smart Grid 1592
The Next Step after the Smart Grid 1593
Conclusions 1594

Acknowledgments 15 94
Related Articles 1594
References 1594

81 Platform Markets and Energy Services 1597

Claire M. Weiller and Michael G. Pollitt

Introduction 1597
Platform Definition 1598
Market Actors and the Competitive Landscape for Electricity 1601
Retail Electricity as a Platform Market 1602
Cases 1603
Case 1 Balancing Services 1603
Case 2 Electric Vehicle (EV) Aggregator 1606
Conclusions from Cases 1607
Implications 1608
Platform Pricing 1608
Market Structure 1611
Consequences for Innovation 1614
Discussion: Electricity Platforms, a New Concept? 1614
Conclusions 1616
Acknowledgments 1617
Related Articles 1617
References 1618

82 Implications of Smart Grid Innovation for Organizational Models in Electricity

Distribution 1621
Lynne Kiesling
Introduction 1621
A Technological, Theoretical, and Regulatory History of Vertical Integration 1622
Smart Grid Innovation and the Economics of Vertical Integration 1627
Asset Ownership and the Future of the Regulated Electric Utility 1629
Conclusions 1633
Acknowledgments 1634
References 1634
xlvi Contents

83 Regulation of Smart Grids 1637

Leonardo Meeus, Samson Y. Hadush, and llan Momber

Introduction 1637
Innovative Smart Grid Cases 1638
Introduction of Active Distribution Grid Management in the Orkney Isles 1638

Deployment of Smart Meters in Italy 1639

Development of an Offshore HVDC Grid in Kriegers Flak 1640

Distributed System Platform in New York 1641

Main Shortcomings of the Conventional Regulatory Frameworks 1642

Bias Toward Cost Reductions at the Expense of Innovation 1642

Bias Toward Capex at the Expense ofOpex 1643
Coordination Issues between Power-Grid Companies 1644

Disincentives for Grid Users 1644

Role of Regulation in the Four Smart Grid Cases 1645

Role of Regulation in the Case of the Orkney Isles 1645

Role of Regulation in the Case

of Italy 1646

Role of Regulation in the Case of Kriegers Flak 1646

Role of Regulation in the Case of New York 1647

Other Pressing Global Issues Outside of the European Union and United States 1647

Conclusions 1647
Related Articles 1648
References 1648

Index 1651