1 Introduction

The power grid is the infrastructure that transports electricity from where it is generated to the consumer [1]. Traditionally, the grid follows a top-down model where electricity is generated in bulk centralized units, then stepped up using a power transformer and a transmission substation. Then, through a distribution substation and power transmission lines, the power reaches the consumer in a one-way flow with no feedback from the consumer side [1–3]. Power utilities have to ensure a sufficient supply of electricity to cope with the demand [2]. In addition, power quality and reliability are managed by utility engineers using meter readings that are distributed in a few critical locations, which supply only limited information about the grid condition [2]. Recently, due to system aging, slow response time, and increased energy demand and load diversity, the rate of system interruptions and blackouts has largely increased [4,5]. Furthermore, the electrical network highly contributes to carbon emissions [4,5]. Therefore, the focus has been shifted toward demand side management, which aims to control demand by educating users to increase their use of energy-efficient products [2]. However, the current measurement procedures do not provide real-time energy consumption [2], which makes it impossible for the consumer to understand how and when they are saving money and energy [2]. Therefore, a new grid infrastructure became essential to overcome all these challenges. Hence, the concept of a smart grid was introduced to present various methods for overcoming those challenges.

2 Definition

Throughout the developed world, the electric utility sector is beginning a fundamental transformation of its infrastructure to overcome the present challenges faced by the sector [6]. These transformations are aiming to making the grid “smarter” and the resulting outcome is referred to as a “smart grid” [4]. Although there are no agreed-upon definitions for the term “smart grid” between organizations [4], there is a common understanding that smart grids should have an information communication structure [4]. Furthermore, the Energy Independence and Security Act of 2007 (EISA 2007) produced what can be considered as the first official definition of a smart grid. The policy states that a smart grid is “the modernization of the Nation's electricity transmission and distribution system to maintain a reliable and secure electricity infrastructure that can meet future demand growth” [7]. In addition, the EISA 2007 lists these 10 characteristics of a smart grid:

1. (1) Increased use of digital information and control technology to improve reliability, security, and efficiency of the electric grid.
2. (2) Dynamic optimization of grid operations and resources with full cybersecurity.
3. (3) Deployment and integration of distributed resources and generation, including renewable resources.
4. (4) Development and incorporation of demand response, demand-side resources, and energy-efficiency resources.
5. (5) Deployment of “smart” technologies (real-time, automated, interactive technologies that optimize the physical operation of appliances and consumer devices) for metering, communications concerning grid operations and status, and distribution automation.
6. (6) Integration of “smart” appliances and consumer devices.
7. (7) Deployment and integration of advanced electricity storage and peak-shaving technologies, including plug-in electric and hybrid electric vehicles as well as thermal-storage air conditioning.
8. (8) Providing consumers with timely information and control options.
9. (9) Development of standards for communication and interoperability of appliances and equipment connected to the electric grid, including the infrastructure serving the grid.
10. (10) Identification and lowering of unreasonable or unnecessary barriers to adoption of smart grid technologies, practices, and services.

The general purpose of a smart grid is to transmit energy in a controlled, smart way from generation units to consumers [8] using a modernized infrastructure that helps improve efficiency, reliability, quality, and safety [2,9]. In addition, smart grids aim to integrate renewable and alternative energy sources [9]. However, to do so requires the implementation of automated control and modern two-way communication technologies [9]. The communication scheme should be able to capture and analyze various data about generation, transmission, and consumption in nearly real time [4].

3 Components

• • Smart meters

In a smart grid, timely data is highly important for reliable delivery of electricity [9]. Therefore, smart meters are essential components, considered as the first building block for two-way communication [10]. Smart meters are digital meters with communication capabilities that allow utilities to collect the required information frequently and communicate with devices used by the consumer [2]. A smart meter system consists of the meter, communication capability, and a control device [11]. They are used to assess the health of the equipment and the integrity of the grid [4] as well as execute control commands remotely and locally [11]. In addition, they can be useful to support advanced protection relaying, eliminate meter estimation, and prevent energy theft [4]. Finally, they help relieve power congestion by controlling demand response [4].

Smart meters can distinguish between the energy supplied from the utility and the energy supplied by the distributed generation (DG) units owned by the user. Therefore, they only bill the energy consumed from the grid, which leads to reducing the energy cost for the consumer [11]. In addition, they can be used by the utility to advise the consumer on the most efficient use of their appliances to reduce the energy cost and the maximum load on the grid [11].

• • Transmission and distribution devices

Transmission and distribution devices can also be equipped with communication capabilities to allow the exchange of information as well as the ability to receive commands to modify settings for better grid control [2]. Transformers, voltage regulators, capacitors, and switches are used to enhance the reliability and availability of power to the consumer [2].

• • Network

The data collected by the smart meters and transmission and distribution devices require a network to exchange the information between different components or between the utility grid and the consumer [2], all in a timely fashion. In addition, the network can be used for studying the impact of equipment limitations and faults [9]. It also helps to avoid the natural accidents and catastrophes that limit its effect [9]. Furthermore, it helps to maintain the grid safety, reliability, and protection by developing online condition monitoring, diagnostics and protection [9].

• • Consumer devices

Currently, there is no way for the consumer to monitor their hourly use of power. This means they only rely on the monthly bill, which makes it difficult for them to understand or feel the effect of installing energy-efficient devices [2]. In addition, such devices can help consumers enhance their energy profiles by disconnecting some loads at peak energy demand times, therefore helping reduce the monthly bill [2]. Such devices can be, but are not limited to, an in-house display or a web portal provided by the utility [2]. Furthermore, installing in-house intelligent devices that can communicate with smart meters to determine the peak demand time and control the energy consumption accordingly [2].

Those components form the new grid infrastructure to achieve grid reliability, flexibility, efficiency, and sustainability. Those features are achieved by the integration of renewable resources, load management, and enhanced energy storage devices [12]. Each one of those methods is discussed next.

4 Renewable energy resources

The integration of renewable energy sources will enhance grid sustainability [10]. However, the high energy fluctuation resulting from the high integration of renewable energy sources might affect the grid's reliability and stability [10,13,14]. In addition, the increased number of DGs increases the complexity of the grid, making it difficult for the operators to handle the system [2]. Therefore, the enhanced communication capabilities of the smart grid can help eliminate those problems because information will be available for balancing supply and demand [2]. Also, because the communication system will be able to send automatic commands, it will respond to the energy fluctuation much faster [2]. Furthermore, the bidirectional energy flow feature of the smart grid will allow the user to supply the grid with energy [14].

Higher integration of renewable energy sources to the grid can represent a way to move toward DG [3]. DG uses small generation units distributed in several locations near the consumer instead of the traditionally bulk units that are usually located far away from cities [3]. Applying DG concepts enhances grid reliability and efficiency by eliminating the high transmission distances [3]. Furthermore, using renewable energy sources in DG reduces carbon emissions produced by the system [3]. However, this high integration of renewable energy sources will cause higher fluctuation in the system, affecting its stability [14]. Several solutions are presented in the literature such as combining the renewable energy sources with combined heat power (CHP) generation [14]; flexible demand such as boilers, heat pumps, and electric vehicles [12,14]; load management [2,10,13]; and energy storage [12,13]. The latter two methods are also viewed as ways for achieving smart grid features discussed in the previous section.

5 Load management

Load management techniques have been implemented since the 1980s as a tool for load shaping and producing a flat load profile [2,12,15]. The main concept of load management is to shift the load from the high demand periods to periods with lower demand [15]. Currently, the load is managed by rejecting loads at high demand periods, using protection relays in a process called “load shedding” to protect the overall grid [12]. However, with the implementation of communication technologies, the load management can be done smarter by responding to the load signal either automatically or manually [12]. The load managers allow the users to program their devices to turn on when the power demand is low and turn off when the grid is congested [13]. To encourage customer participation in load management, utilities have designed different pricing methods such as peak load pricing and adaptive pricing [12]. In the peak load pricing scheme, the utility divides the day into different periods, with each period having a different consumption price announced at the beginning of the day [12]. For, adaptive pricing, the energy price for each period is announced at the beginning of the period, depending on real-time data collected by the smart meters [12]. Consumer participation in load management is essential [15]. Hence, some utility companies offer in-home displays or web portals for their customers so they can access their hourly consumption, their contribution to CO₂ emissions, and the consumption prices [2,15]. This way, the consumer can identify when it is best to use energy devices and be informed about his or her effect on the environment [2]. Also, the consumer can feel the benefits of equal distribution of the load economically [2,15]. Furthermore, with variable pricing schemes, the user can use the time with low energy prices to charge their energy storage devices, then use that power later at high energy price periods [16]. This makes energy storage devices an important part of the smart grid [16]; hence, they are discussed in the next section.

6 Energy storage

Energy storage can play an important role in resolving the previously explained issues with renewable energy sources and load management because it can help balance the load, therefore enhancing the system performance and reliability [16]. Several countries, such as the United States, Germany, and Japan, are planning to expand their energy storage facilities [16]. Currently, most of the storage units exist as large pumped-hydro facilities, or compressed air energy storage (CAES) [16]. Both technologies use the low power demand periods to charge the system (pumping water for the pumped-hydro plants, and compressing air for the CAES), then use it again when the demand is at a critical level [16].

Several energy storage technologies such as flywheel, compressed gas, CHP, super capacitors, and batteries can also be used [14,16]. Due to their fast acting time, batteries, flywheels, and super capacitors have been the main focus for distributed storage systems [16]. However, when considering the growing demand variability imposed by the integration of wind and solar power systems and their economical advantages, batteries appear to be the technology with the highest potential to meet the industry requirement [12,13]. Battery systems have been developed and used for decades in Japan and the United States [16].

As the importance of energy storage is increased to meet the challenges imposed by integrating variable types of energy sources and loads, several concepts and ideas have emerged, such as community energy storage (CES) [16]. The concept is to install relatively small energy storage units at the distribution side to protect the supply at the consumer's side [16]. This is considered as a deviation from the traditional control philosophy [16]. The concept can help meet the customer demand as new electronics loads are added to the load profile [16]. In addition, as more users start installing photovoltaics (PV) panels on the roofs of their houses, CES can handle the energy flow back to the system when the supply exceeds the demand for consumers and use it again when the demand is increased [16]. Positioning the CES units near the consumer side will help capture the excess power and reuse it for the same consumers with minimal transmission losses [16]. Finally, the CES units can help guard against voltage fluctuations due to a cloud passing by Roberts and Sandberg [16]. When the clouds shade a huge number of PV panels, the voltage will rapidly drop, and as the sun reappears the voltage will increase [16]. The fast response of the electronic devices associated with the CES unit will be able to manage those fluctuations without affecting the continuity of supply [16].

Another concept is the utilization of plug-in electric vehicles (PEVs) to support the grid at high demand periods [2]. As the technology develops, the benefits of PEV will outweigh their cost, which will increase the share of PEVs in the market [2]. This increase can either cause an additional stress to the grid or can be useful in supporting the grid [12,16]. If the charging and discharging patterns are well managed, the PEV can be charged when the demand is low [2,12], and then supplied back to the system when the power demand is at peak value [2]. However, this concept needs further improvement on the power storage elements used for the car [16].

So far, the smart grid definition has been introduced and the different elements of a smart grid are explained. In the following sections, the characteristics of the smart grid are introduced and discussed.

7 Self-healing

The current grid philosophy only responds to limit the effect of any fault cascading through the grid and focus on protecting the assets [17]. In a smart grid, the system is expected to perform online assessments and respond to signals from its sensors [17]. The assessment is used to automatically restore the affected components or sectors [17]. The system will use its communication capabilities to analyze undesirable conditions and take the appropriate action [17]. The self-healing feature can help identify the issue before it escalates, therefore maintaining the system stability [17]. It can also help with handling problems too large or too fast-moving for human intervention [17]. To equip the system with self-healing capabilities, the system should be supported with technologies that help stabilize it, such as flexible alternating current transmission system and wide area measurement system [17]. In addition, new protections, communications, and control elements are required to sense the circuit parameters, isolate faults, and automatically restore the service [17]. Implementing the self-healing abilities will help not only with supporting the grid reliability, security, and power quality but it will also significantly reduce the average outage duration, saving costs for the industry and customers [17].

8 Customer active participation

Currently, the customers are uninformed about their hourly consumption trends [17] as the only information they receive is the monthly electricity bill [2]. As a month period is too long, it is almost impossible for the customer to understand how their consumption affects the grid conditions or the electricity cost [2]. Implementing real-time devices and information elements will help enhance the customer's understanding and participation [2,17]. An informed customer can use the information to modify their consumption pattern to minimize their cost and maximize their benefits [17]. In a smart grid, the customer's active participation will help relieve the grid from congestion and reduce the net cost to the customer [17]. As the utility uses the enhanced measurement equipment to provide real-time pricing algorithms, the customer can utilize this data to modify their consumption either manually or automatically by implementing computer programs to act accordingly [17]. The customer's response to the pricing signals can help provide a flatter energy consumption profile and hence reduce their cost along with their environmental impact [17]. Finally, the utility can benefit from the flat consumption profile to use its assets more efficiently [17].

9 Security

The electric grid should incorporate solutions to guard it against physical and cyber threats [17]. The current infrastructure is highly vulnerable to terror attacks and natural disasters [17]. For example, in 2008, severe damage was caused to the power system in China due to continuous snowfall. This resulted in the loss of the power supply to 170 cities, paralyzing 13 provinces and leaving 2018 substations dysfunctional [18]. Therefore, the smart grid design and operation should minimize the consequences of such disasters to speed up service restoration [17]. In addition, the increased integration of communication technologies has raised concerns about privacy, and cyber-security [19]. Such concerns include, but are not limited to, hackers attacking the network to either manipulate the consumption data and prices, fake consumption data and overload the grid, manipulate the electric devices of the consumer, or use the energy consumption data to learn the victim's daily activities [19]. To guard against natural disasters or terrorist attacks, designers should anticipate the system's weak points and study different scenarios during system planning [17]. In addition, cybersecurity can be enhanced by utilizing technologies such as authorization, authentication, encryption, and intrusion detection [17]. Ensuring the grid security enhances its reliability by reducing system vulnerability, and minimizes the consequences of any disturbance [17].

10 Power quality

The power quality is affected mainly by the harmonics, imbalance, sags, and spikes introduced by the distribution system [17]. Therefore, electronic devices connected to the system can highly damage the grid's power quality [17]. Low power quality severely damages equipment life expectancy and grid reliability [17]. It also causes financial distress to the utility companies by increasing the losses, which need to be compensated by increasing generation [17]. The current electric grid utilizes a great number of devices to maintain power quality, such as voltage regulators, capacitor banks, and transformers [2]. However, those devices are not equipped with two-way communication facilities, and hence act in an isolated manner [2]. By adding the communication capabilities to those devices, the operators can adjust the settings of the devices to enhance the power quality of the overall system [2]. Furthermore, the hourly information measured by the smart sensor can help route the electricity based on system conditions [2]. Enhancing the power quality will reduce the operation costs and system downtime, resulting in increased customer satisfaction [17].

11 DG and storage

The current power plants are bulk units located far from consumption points [3]. In addition, the distribution grid is designed for one-way power flow [2]. The smart grid aims to shift the generation philosophy to a more decentralized model by including a variety of small distribution sources closer to the consumer [17]. Integration of renewable energy sources in DG units offers an environmentally friendly alternative to fossil fuel-based generation units [3]. This integration along with the various energy storage units can be located almost anywhere [12]. The DG and storage units offer many benefits to the system, including cost reductions, increased system capacity, and increased tolerance to threats and attacks [17]. However, implementing the DG concept requires enhanced communication capabilities [13]. Therefore, the smart grid's two-way communication enables monitoring and controlling the energy flow in a timely manner [2].

12 Efficient operation

It has always been challenging to design and operate electricity networks capable of matching the supply and demand [20], due to the limited integration of operational data [17]. The current grid infrastructure is designed based on the peak load requirement [20]. Therefore, a considerable amount of the substation equipment is only used for a few hours [20]. Hence, the data obtained from the implemented smart meters in the smart grid can be utilized for better grid operation [17,20]. The obtained data along with demand-side management techniques will help balance the supply and demand [21]. Furthermore, the real-time data collected helps create a predictive maintenance program where the equipment is only maintained when needed, hence removing the extra cost of implementing a preventive maintenance strategy and reducing the cost [17]. Implementing software to manage the system and send alerts to the operators or commands to the different equipment to automatically modify its settings based on the network conditions will reduce the frequency of human errors and enhance the efficiency and decision-making process [17].

13 Summary

The increased energy demand and environmental concerns in addition to the aging grid infrastructure have been the driving force toward a new grid philosophy called “the smart grid” [9]. The new infrastructure needs to be efficient, reliable, economic, secure, and sustainable [17]. To achieve the mentioned goals, smart meters equipped with advanced two-way communication technology are essential for providing real-time data. The information received from the smart meters can be utilized to enhance the reliability and security of the grid by allowing the integration of renewable energy sources and distributed storage units into the system, forming a DG philosophy. Furthermore, several software programs can benefit from the gathered data either to automatically modify the settings of the grid equipment to meet the demand requirements or to identify weak points in the system. Furthermore, the equipment maintenance cost can be significantly reduced by developing a predictive maintenance program to reduce the routine maintenance frequency. Finally, by the implementation of demand-side management and pricing programs, the consumer can actively participate in producing a flat energy consumption profile to reduce his or her total electricity bill.

The customer's active participation in controlling the energy demand does not necessary mean they have to worry about when to use their electric appliances [10]. Instead, software programs can be implemented to receive the data and act accordingly. In addition, the grid hardware and software will be designed as plug-and-play devices [17]. In addition, Rahman [10] is suggesting a scenario where companies will offer a service to the consumer to sell and buy energy on their behalf, providing them with the benefits of smart grids without having to deal with the associated issues.