Chapter 1
An Overview of the Smart Grid

1.1 Introduction

The world population has been increased rapidly ever since the industrial revolution in the eighteenth century. Toward building a more affluent society, the development of many industries has led to significant increase in energy demand on a global scale. As a result, the increase in CO2 (carbon dioxide) emissions has threatened the global environment and traditional fossil energy sources have reached their limits on the Earth. Compared to traditional fossil energy, nuclear energy began to be regarded as clean, safe, and reliable. However, in March 2011, this belief was shaken due to the Fukushima Daiichi Nuclear Power Plant accident in Japan. As a result, many countries and international bodies are now showing overwhelming interest in the use of renewable technologies for the production of clean and safe energy. However, maintaining a balance between the demand and supply of energy, fulfilling the national energy requirements through renewable energy, and abandoning energy production from fossil fuels pose many challenges. For example, energy supply which is based on the natural solar power, wind power, and hydroelectric power is unstable and cannot meet the strict requirements of electric systems. In order to make renewable energy into a stable energy resource, it is necessary to monitor power supply and demand in real time and to obtain a balance between supply and demand by integrating conventional electric grid with up-to-date information and communication technologies.

In December 2009, the United Nations organized the fifteenth session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) (COP 15) and the fifth session of the Meeting of the Parties to the Kyoto Protocol (COP15/MOP5) in Copenhagen, Denmark. The industrial world reached an agreement with the long-term goal of preventing the global average temperature from rising more than 2 °C, that is, 3.6 °F, above preindustrial levels [1]. The first European Union (EU) Electricity Directive issued was Directive 96/62/EC whose primary objective was to liberalize the electric market in 1996 and this was then extended to the gas market in 1998. The Directive was repealed and replaced by Directive 2003/54/EC as the second EU Electricity Directive in 2003, and was transposed by the EU Cogeneration Directive 2004/08/EC in 2004 [2]. In September 2007, the European Commission issued the third package of legislative proposals, which was then approved as Directive 2009/72/EC by the European Parliament and European Council in July 2009 [3]. Since March 2011, the Gas and Electricity Directives of the third package for an internal EU gas and electricity market have been transposed into a national law to introduce smart meters to the extent of around 80% by 2020 [4]. The European Parliament and European Council also established the Agency for the Cooperation of Energy Regulators (ACER) to promote the internal energy market for both electricity and natural gas in Europe [5].

The United States (US) has conducted a restructuring of electric power networks by issuing the American Recovery and Reinvestment Act (ARRA) in 2009 to enforce upgradation of the obsolete electric power networks. In January 2010, the National Institute of Standards Technology (NIST) of the US issued the NIST Framework and Roadmap for Smart Grid Interoperability Standards Release 1.0. NIST has initiated the Smart Grid Interoperability Panel (SGIP) under the Energy Independence and Security Act of 2007 (EISA 2007) to coordinate standards development for the Smart Grid with various organizations such as the Open Smart Grid User Group (OpenSG User Group), Institute of Electrical and Electronics Engineering (IEEE), Internet Engineering Task Force (IETF), Telecommunications Industry Association (TIA), and ZigBee Alliance.

Japan, an advanced industrial country, built a stable electric power network with nuclear power being considered as the main and stable source of power supply. However, this consideration underwent a total change after the accident at the Fukushima Daiichi nuclear power plant on March 11, 2011. After this accident, interest in promoting the research and development in setting out a policy for renewable energy technologies for the Smart Grid has grown rapidly.

The Smart Gird requires maintaining a balance between energy supply and demand through real-time monitoring enabled by bi-directional ICT. Since the cost of electricity generation varies depending on not only the method of generating electric power but also the consumption time, location, and quantity, the purchased electricity price accordingly changes due to different situations of customers. Therefore, it is important for utilities and customers to exchange information about electricity supply and demand with each other. Furthermore, it is important to ensure not only the reliability of power generation, storage, and transmission systems but also the reliability of the information and communication systems. For example, many users use e-mail, Short Messaging Service (SMS), or Internet web pages through either a Computer or Personal Computer/Laptop or mobile phone for energy monitoring and management at home. However, transmitting critical data of electricity usage and customer privacy information through the Internet cannot meet the strict requirements of electricity systems such as latency and security. In particular, cyber security technologies will play an important role in the Smart Grid for ensuring reliable operations.

The challenges for realizing the next generation Smart Grid lies in the gaps between market needs and existing standards, and the lack of interoperability among standards. In order to bridge the gaps between future requirements and existing standards, various Standards Developing Organizations (SDOs) have been trying to promote a standardization process of the Smart Grid. The critical role of standards for the Smart Grid has already been realized worldwide by governments and industrial organizations, which advocates the development and adoption of standards to ensure that today's investments in the Smart Grid remain valuable in the future; to ensure products from multiple manufacturers to interoperate seamlessly; to catalyze innovations; to support consumer choice; to create economies of scale to reduce costs; and to open global markets for Smart Grid devices and systems. As pointed out by the International Electrotechnical Commission (IEC), which is one of the major international standardization organizations for issuing standards related to the Smart Grid, a higher level of syntactic and semantic interoperability is required for the various products, solutions, technologies, and systems which build up the Smart Grid system [6]. Interoperability is necessary to ensure the smooth exchange and use of information between different systems or components. Two major domains of interoperability are syntactic interoperability and semantic interoperability. Syntactic interoperability ensures the ability of communication and exchange of information between different systems through standardized data formats and protocols, a typical domain where much of the work of IEC and other SDOs has focused on. Semantic interoperability is the next step of syntactic interoperability, which ensures the ability of different systems to interpret the exchanged information through standardized information exchange reference models. Besides SDOs, there are also many technical consortia, forums, and panels, which are actively involved in promoting the standardization process of the Smart Grid. This chapter will provide an overview of the current status of the Smart Grid in both developed and developing countries. The organization of this chapter is as follows: Section 1.2 provides an overview of major Smart Grid-related organizations, including SDOs, regulatory organizations, technical consortia, forums, and panels, and marketing/advocacy organizations; Section 1.3 introduces the development of the Smart Grid in the United States; Section 1.4 introduces the development of the Smart Grid in the European Union; Section 1.5 introduces the development of the Smart Grid in Japan; Section 1.6 introduces the development of the Smart Grid in South Korea; Section 1.7 introduces the development of the Smart Grid in China; and Section 1.8 gives the conclusion.

1.2 An Overview of Smart Grid-Related Organizations

In this subsection, we provide an overview of major Smart Grid-related organizations, including SDOs, regulatory organizations, technical consortia, forums and panels, and marketing/advocacy organizations [7]. In general, SDOs are the organizations that develop, revise, coordinate, and amend technical standards. SDOs not only deal with different types of standards to address applications or sets of applications but also deal with specifications that lead to formal standards which are approved by law. Some of the standards are informal or voluntary as they are adopted by industries but not formally approved by law. Besides SDOs, there are various technical consortia, forums and panels, regulatory organizations, and marketing/advocacy organizations, which are also actively involved in developing or evaluating Smart Grid-related technical specifications and cooperating with SDOs in promoting the standardization process. It is noted that the classification of organizations in Figure 1 is just for illustration purpose as some organizations are active in a broad scope and it would been difficult to classify them into a single category.

1.2.1 SDOs Dealing with the Smart Grid

SDOs are classified according to...