Adequacy concerns introduced by the deploymentof variable generation technology can beaddressed by a number of flexibility mechanisms,such as direct trading of electricity betweenregions. One of the best examples of suchtrading is the Nordic electricity system, wheresignificant interconnection and well functioningmarkets between regions allow for high levels ofwind energy deployment (Figure 7). <strong>Smart</strong> gridtechnology can address the complex power flowproblems that result from wide-area wholesaletrading by allowing them to be managed withincreased efficiency and reliability.System securityAlthough a number of OECD countries haverecently experienced large-scale blackouts, theirelectricity systems are regarded as generallysecure, according to industry-specific indices thatmeasure the number and duration of outages.<strong>Smart</strong> grid technologies can maintain and improvesystem security in the face of challenges such asageing infrastructure, rising demand, variablegeneration and electric vehicle deployment. Byusing sensor technology across the electricitysystem, smart grids can monitor and anticipatesystem faults before they happen and takecorrective action. If outages do occur, smart gridscan reduce the spread of the outages and respondmore quickly through automated equipment.Cyber security<strong>Smart</strong> grids can improve electricity systemreliability and efficiency, but their use of new ICTscan also introduce vulnerabilities that jeopardisereliability, including the potential for cyber attacks.Cyber security is currently being addressed byseveral international collaborative organisations.One recent US study summarised the followingresults (GAO, 2011):zzzzAspects of the electricity system regulatoryenvironment may make it difficult to ensurethe cyber security of smart grid systems.Utilities are focusing on regulatory complianceinstead of comprehensive security.zzzzzzzzConsumers are not adequately informed aboutthe benefits, costs and risks associated withsmart grid systems.Insufficient security features are being builtinto certain smart grid systems.The electricity industry does not have aneffective mechanism for sharing informationon cyber security.The electricity industry does not have metricsfor evaluating cyber security.These findings confirm that cyber security mustbe considered as part of a larger smart griddeployment strategy. Lessons can be learnedfrom other industries that have addressed thesechallenges, such as banking, mobile phonesand retail, but in the context of infrastructurerelatedsystems, dedicated focus is needed.For example, the Joint Research Council of theEuropean Commission has initiated the Europeannetwork for the Security of Control and Real-TimeSystems (ESCoRTS). 11 ESCoRTS is a joint projectamong European Union industries, utilities,equipment manufacturers and research institutes,under the lead of the European Committeefor Standardisation (Comité européen denormalisation, or CEN), to foster progress towardscyber security of control and communicationequipment in Europe. The adoption of such modelsthat work to develop solutions for cyber security,while allowing data to be used for acceptablepurposes, is required for successful deployment ofsmart grid technologies.11 www.escortsproject.eu/16 Technology <strong>Roadmap</strong>s <strong>Smart</strong> grids© OECD/IEA, 2010
<strong>Smart</strong> grid deployment<strong>Smart</strong> grid technologiesThe many smart grid technology areas – eachconsisting of sets of individual technologies –span the entire grid, from generation throughtransmission and distribution to various types ofelectricity consumers. Some of the technologiesare actively being deployed and are consideredmature in both their development and application,while others require further development anddemonstration. A fully optimised electricity systemwill deploy all the technology areas in Figure 8.However, not all technology areas need to beinstalled to increase the “smartness” of the grid.Wide-area monitoringand controlReal-time monitoring and display of powersystemcomponents and performance, acrossinterconnections and over large geographic areas,help system operators to understand and optimisepower system components, behaviour andperformance. Advanced system operation toolsavoid blackouts and facilitate the integration ofvariable renewable energy resources. Monitoringand control technologies along with advancedsystem analytics – including wide-area situationalawareness (WASA), wide-area monitoring systems(WAMS), and wide-area adaptive protection,control and automation (WAAPCA) – generate datato inform decision making, mitigate wide-areadisturbances, and improve transmission capacityand reliability.Information and communicationstechnology integrationUnderlying communications infrastructure,whether using private utility communicationnetworks (radio networks, meter mesh networks)or public carriers and networks (Internet, cellular,Figure 8. <strong>Smart</strong> grid technology areasGeneration Transmission Distribution Industrial Service ResidentialTransmission linesDistribution linesPadmounttransformerTransmissionsubstationDistributionsubstationWide-area monitoring and controlInformation and communications technology (ICT) integrationInformation and communications technology integration (ICT)Transmissionenhancement applicationsRenewable and distributed generation integrationDistribution gridmanagementAdvanced metering infrastructure (AMI)EV charging infrastructureCustomer-side systems (CS)Source: Technology categories and descriptions adapted from NETL, 2010 and NIST, 2010.KEY POINT: <strong>Smart</strong> grids encompass a variety of technologies that span the electricity system.<strong>Smart</strong> grid deployment17© OECD/IEA, 2010