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EXPERIMENT NO 3

AIM: Discuss about (a).Evolution of electric grid

(b).Concept of electric grid

(c).Definition of smart grid

(d).Needs of smart grid

(e).Smart grid drivers and function

(f).Opportunities, challenges and benefits of smart grid

(g).Difference between conventional and smart grid

THEORY:

History of Evolution of Electric Grid

In the early days of electricity, energy systems were small and localized. The Pearl Street

Station in New York City, launched in 1882, was the first of these complete systems, connecting

a 100-volt generator that burned coal to power a few hundred lamps in the neighborhood. Soon,

many similar self-contained, isolated systems were built across the country.

During this era, two major types of systems developed: the AC and DC grids. Thomas Edison,

who designed Pearl Street, was a proponent of direct current (DC). In a direct current, the

electrons flow in a complete circuit, from the generator, through wires and devices, and back to

the generator.

William Stanley, Jr. built the first generator that used alternating current (AC). Instead of

electricity flowing in one direction, the flow switches its direction, back and forth. AC current

is what is used almost exclusively worldwide today, but in the late 1800s it was nearly 10 years

behind DC systems. AC has a major advantage in that it is possible to transmit AC power as

high voltage and convert it to low voltage to serve individual users.

From the late 1800s onward, a patchwork of AC and DC grids cropped up across the country,

in direct competition with one another. Small systems were consolidated throughout the early

1900s, and local and state governments began cobbling together regulations and regulatory

groups. However, even with regulations, some businessmen found ways to create elaborate and

powerful monopolies. Public outrage at the subsequent costs came to a head during the Great

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Depression and sparked Federal regulations, as well as projects to provide electricity to rural

areas, through the Tennessee Valley Authority and others.

By the 1930s regulated electric utilities became well-established, providing all three major

aspects of electricity, the power plants, transmission lines, and distribution. This type of

electricity system, a regulated monopoly, is called a vertically- integrated utility. Bigger

transmission lines and more remote power plants were built, and transmission systems became

significantly larger, crossing many miles of land and even state lines.

As electricity became more widespread, larger plants were constructed to provide more

electricity, and bigger transmission lines were used to transmit electricity from farther away. In

1978 the Public Utilities Regulatory Policies Act was passed, making it possible for power

plants owned by non-utilities to sell electricity too, opening the door to privatization.

By the 1990s, the Federal government was completely in support of opening access to the

electricity grid to everyone, not only the vertically- integrated utilities. The vertically- integrated

utilities didn’t want competition and found ways to prevent outsiders from using their

transmission lines, so the government stepped in and created rules to force open access to the

lines, and set the stage for Independent System Operators, not-for-profit entities that managed

the transmission of electricity in different regions.

What is electric grid?

An electrical grid is an interconnected network for delivering electricity from suppliers to

consumers. It consists of generating stations that produce electrical power, high-voltage

transmission lines that carry power from distant sources to demand centers, and distribution

lines that connect individual customers.

Power stations may be located near a fuel source, at a dam site, or to take advantage of

renewable energy sources, and are often located away from heavily populated areas. They are

usually quite large to take advantage of the economies of scale. The electric power which is

generated is stepped up to a higher voltage at which it connects to the transmission network.

The transmission network will move the power long distances, sometimes across internationa l

boundaries, until it reaches its wholesale customer (usually the company that owns the local

distribution network).

On arrival at a substation, the power will be stepped down from a transmission level voltage to

a distribution level voltage. As it exits the substation, it enters the distribution wiring. Finally,

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upon arrival at the service location, the power is stepped down again from the distribution

voltage to the required service voltage(s).

Fig: - Existing Electricity Delivery System

The electric grid is made up of three components: generation, transmission and distribution

facilities. Generators produce electricity, transmission facilities step up the power to high

voltage to be carried by transmission lines to load centers, and distribution facilities step down

the voltage of the electricity to safely distribute to customers to use.

Generation facilities, which comprise conventional power plants (e.g., natural gas, coal, oil etc.)

and renewable power plants (e.g., wind, solar, geothermal), produce electricity to serve loads.

India’s generation mix is currently thermal dominated with almost 65% of electricity produced

from coal‐, gas‐ and oil‐fired facilities. The remaining electricity is produced from hydro

facilities (25%), nuclear facilities (3%) and renewable resource facilities (7%).

Transmission facilities, which are comprised of substations and high‐voltage lines, carry

electricity from generation facilities to load centers. Substations step up the voltage of the

electricity generated at power plants so it can be transmitted over long distances with minimal

losses. High‐voltage transmission lines carry the electricity to load centers. India’s largest

transmission owner, POWERGRID, owns 79,556 circuit kilometers of transmission line and

132 substations which are found in one of the country’s five transmission regions: Northern

region, North Eastern region, Eastern region, Western region and Southern region

(POWERGRID). Each of these regions houses a Regional Load Dispatch Center (RLDC) that

coordinates the use of the transmission system within a region. Each state houses a State Load

Dispatch Center (SLDC) that coordinates transmission usage within the state and reports this

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data to its overseeing RLDC. This means multiple SLDCs report to a single RLDC (Pandey,

2007). Four of the five regions, excluding the southern region, operate in a synchronous mode,

which implies that power can flow seamlessly across these regions to maintain load and

generation balance. The southern region is asynchronously interconnected with the rest of the

India grid.

Distribution facilities in India serve close to 144 million customers. These facilities include step

down substations and lines to carry the electricity at lower voltage to electricity consumers.

What is the Smart Grid?

A Smart Grid is an electricity network that can intelligently integrate the actions of all users

connected to it – generators, consumers and those that do both – in order to efficiently deliver

sustainable, economic and secure electricity supplies.

In more technical consideration, A smart grid uses sensing, embedded processing and digital

communications to enable the electricity grid to be observable (able to be measured and

visualized), controllable (able to manipulated and optimized), automated (able to adapt and self-

heal), fully integrated (fully interoperable with existing systems and with the capacity to

incorporate a diverse set of energy sources).

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Why we need smart grid?

Electricity is the most versatile and widely used form of energy and global demand is growing

continuously. Generation of electrical energy, however, is currently the largest single source of

carbon dioxide emissions, making a significant contribution to climate change. To mitigate the

consequences of climate change, the current electrical system needs to undergo significant

adjustments.

Today’s electrical grid suffers from a number of problems, including that it is:

• Old (the average age of power plants is 35 years2)

• Dirty (more than half of our electricity is generated from coal)

• Inefficient (the delivered efficiency of electricity is only 35%3)

• Vulnerable (the 2003 blackout in the Northeast affected 55M people for up to two days)

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Functionalities of smart grid

There are following attributes of the Smart Grid-

1. It enables demand response and demand side management through the integration of smart

meters, smart appliances and consumer loads, micro-generation, and electricity storage (electric

vehicles) and by providing customers with information related to energy use and prices. It is

anticipated that customers will be provided with information and incentives to modify their

consumption pattern to overcome some of the constraints in the power system.

2. It accommodates and facilitates all renewable energy sources, distributed generation,

residential micro-generation, and storage options, thus reducing the environmental impact of

the whole electricity sector and also provides means of aggregation. It will provide simplified

interconnection similar to ‘plug-and-lay’.

3. It optimizes and efficiently operates assets by intelligent operation of the delivery system

(rerouting power, working autonomously) and pursuing efficient asset management. This

includes utilizing asserts depending on what is needed and when it is needed.

4. It assures and improves reliability and the security of supply by being resilient to

disturbances, attacks and natural disasters, anticipating and responding to system disturbances

(predictive maintenance and self-healing), and strengthening the security of supply through

enhanced transfer capabilities.

5. It maintains the power quality of the electricity supply to cater for sensitive equipment that

increases with the digital economy.

6. It opens access to the markets through increased transmission paths, aggregated supply and

demand response initiatives and ancillary service provisions.

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ROLES AND NECCESITY SMART GRID

1. Demand Management – predicting, monitoring and controlling real-time electrical

demands from the major infrastructure nodes to the businesses and residences of

individual consumers

2. Supply Management – adjusting and balancing utility energy production levels—

including peak loads—by accessing real-time electricity usage information and by

controlling demand through network automation controls

3. Multi-Tiered Energy Programs – these would enable utilities to facilitate a tiered-kW

structure, a fee-based system by charging more or less for energy depending on system

demands and load utilization rates at any given time of the day

4. Vehicle Integration – the ability for electric, fuel-cell, and plug-in hybrid vehicles to

feed back into the grid, to be charged as needed, or to be scheduled for charging by

taking advantage of cheaper energy prices per kilowatt when demand is lower and

energy availability is higher

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5. Offsite Power Integration – the ability for external energy sources (solar, wind, battery

technologies, etc.) to pump electricity back into the grid, thus allowing consumers to

profit from electricity production

6. Control Automation – by adding a control loop (something similar to adding a

programmable thermostat to the home), consumers and utilities can turn on and off

home appliances based on time of need, necessity, and the price of energy

7. Consumer Control Consoles – by replacing dated home metering systems, new

upgraded electricity meters will allow consumers to actively monitor real-time energy

use; consumers and utilities will therefore have the ability to set control automation

parameters to adjust the usage of appliances and other home devices when energy is

more expensive or peaking

8. Consumer Online Controls – with the addition of the Internet, consumers will be able

to modify, control and optimize home energy usage by analyzing usage patterns

9. Maintenance Pinpointing – with the addition of integrated sensors in the electrical

network, power failures and interruptions can be more easily identified and located

10. Power Plant Growth – by adopting a Smart Grid infrastructure, users and utilities can

better manage supply and demand loads, thus potentially reducing the need for

additional power plants

11. Peak Load Balancing – when loads are sporadically high in the summer months due

to high outside temperatures, utilities can interact with consumers to reduce demand on

an as-needed basis by optimizing distribution and lowering peak demand; in turn, this

would reduce load failures in the network

12. Smart Grid Networks – electric power companies can accurately monitor and control

real-time inputs and outputs from the grid. This affords the “dumb grid” some

intelligence at the micro-user level (vs. the macro-user city level)

13. Smart Grid – an automated, self-balancing and self-monitoring grid capable of

accepting multiple energy sources.

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BENEFITS OF SMART GRID TECHNOLOGY

1. It overhauls aging equipment-The current electrical system is decades old and dependent

upon equipment that is approaching the end of its usable life. Smart grid updates this

infrastructure, ensuring that safety standards continue to be met, that power is delivered

consistently, and that the system is managed efficiently.

2. It equips the grid to meet increasing demand- As Americans today use more electronic

devices than ever, the demand for power continues to grow rapidly. Without smart grid

improvements, the old system, already strained to near-capacity, will be unable to meet the

challenges of the future.

3. It decreases brownouts, blackouts, and surges-You don’t always know when a brownout

or power surge is happening, but they can leave damaged TVs, audio equipment, and

computers in their wake. Smart grid applications smooth the flow of power, and when

aberrations do occur, they are more quickly and easily dealt with.

4. Smart grid lowers energy costs-It gives you control over your power bill. Smart grid

makes it possible to monitor and adjust your energy use through smart meters and home

energy management systems that offer 24/7 rate and usage readings. That means no

surprises on your electric bill and even better, you can schedule your most energy-intens ive

tasks for low-demand periods when you pay less. Control of your electric usage is in your

hands and dollars stay in your wallet, month after month.

5. It facilitates real-time troubleshooting-When something goes wrong in today’s electrical

system, a utility worker must drive to the location of the problem to collect data before a

solution can be devised. Smart grid improvements convert system events into instant ly-

retrievable digital information, so that problem solving can begin immediately. With such

improved efficiency comes reduced producer costs — savings that will be passed on to you.

6. It reduces expenses to energy producers-To meet spikes in energy consumption, today’s

system relies on the building and maintenance of expensive standby plants which sit idle

except during rare critical demand periods. Smart grid allows direct communication with

end-user equipment to reduce consumption during these peak periods, lowering the need

for costly standby power plants.

7. Smart grid secures America’s energy independence-It facilitates broad-scale electric

vehicle charging, like many Americans, you may be contemplating replacing your gas

guzzler with an efficient electric vehicle. Once you do make the switch, you’ll need a

reliable, low-cost way to recharge it anytime, anywhere. When you and millions of other

owners plug in to charge your electric vehicles, smart grid will be ready to handle the new

demand.

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8. It makes renewable power feasible- Sophisticated smart grid systems are needed in order

to strategically manage the diverse and geographically scattered renewable power sources

like wind farms, solar plants, and hydro stations. Smart grid will ensure that this energy can

be stored safely and distributed where and when it’s needed.

9. It maintains our global competitiveness-Today, even developing countries are building

their energy infrastructure on faster, more modern technologies. Our electric grid once gave

us a competitive advantage, but now it’s causing us to fall behind. Smart grid safeguards

our nation’s position at the forefront of the world’s transition toward a clean energy future.

APPLICATIONS OF SMART GRID

Economic, political, environmental, social and technical factors have prompted the emergence

of the smart grid concept. Distribution systems are arguably the element of power delivery

infrastructures where smart grid technologies are likely to have the most significant impacts.

The smart grid concept has driven the coordinated and integrated application of existing power,

communications, control, and information technologies at distribution system level...

1. Advanced distribution automation :-(ADA) is a term coined by the IntelliGrid project

in North America to describe the extension of intelligent control over electrical power grid

functions to the distribution level and beyond. It is related to distribution automation that

can be enabled via the smart grid. The electrical power grid is typically separated logica lly

into transmission systems and distribution systems. Electric power transmission systems

typically operate above 110kV, whereas Electricity distribution systems operate at lower

voltages. Normally, electric utilities with SCADA systems have extensive control over

transmission- level equipment, and increasing control over distribution- level equipment via

distribution automation. However, they often are unable to control smaller entities such

as Distributed energy resources (DERs), buildings, and homes. It may be advantageous to

extend control networks to these systems for a number of reasons:

Distributed generation is increasingly important in power grids around the world. This

generation can help to support local power grids in the presence of blackouts, and ease the load

on long-distance transmission lines, but it can also destabilize the grid if not managed

correctly”. Usually, utility control centers are unable to manage distributed generators directly,

and this may be a valuable capability in the future.

Industrial and residential loads are increasingly controlled through demand response.

For example, during periods of peak electrical demand in the summer, the utility control centers

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may be able to raise the thermostats of houses enrolled in a load reduction program, to

temporarily decrease electrical demand from a large number of customers without significantly

affecting their comfort. Customers are usually compensated for their participation in such

programs.

To enable demand side management, where homes, businesses, and even electric

vehicles may be able to receive real-time pricing (RTP) signals from their distribution

companies and dynamically adjust their own energy consumption profiles to minimize costs.

This would also preserve customer autonomy and mitigate privacy issues.

To further the penetration and quality of self-healing, which reduces or eliminates

outage time through the use of sensor and control systems embedded in the distribution system.

The goal of Advanced Distribution Automation is real-time adjustment to changing loads,

generation, and failure conditions of the distribution system, usually without operator

intervention. This necessitates control of field devices, which implies enough information

technology (IT) development to enable automated decision making in the field and relaying of

critical information to the utility control center. Automated control of devices in distribution

systems is closed-loop control of switching devices, voltage controllers, and capacitors based

on recommendations of the distribution optimization algorithms.

Distribution System Reliability: Distribution Automation currently increased system reliabil ity,

and new technology such as solid state transformers.

Increasing Utilization of Existing Infrastructure: As a component of ADA infrastructure, the

new system concepts will enable more efficient operation of the power system, allowing closer

control of voltage profiles (e.g. conservation voltage reduction, closely related to voltage

optimization) and maximization of energy throughput.

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Fig:-Advanced distribution automation

2. Plug in electric vehicles:-

Plug-in electric vehicles offer users the opportunity to sell electricity stored in their batteries

back to the power grid, thereby helping utilities to operate more efficiently in the management

of their demand peaks. A vehicle-to-grid (V2G) system would take advantage of the fact that

most vehicles are parked an average of 95 percent of the time. During such idle times the

electricity stored in the batteries could be transferred from the PEV to the power lines and back

to the grid. In the U.S this transfer back to the grid have an estimated value to the utilities of up

to $4,000 per year per car. In a V2G system it would also be expected that battery

electric (BEVs) and plug-in hybrids (PHEVs) would have the capability to communicate

automatically with the power grid to sell demand response services by either delivering

electricity into the grid or by throttling their charging rate. A plug-in electric vehicle (PEV) is

any motor vehicle that can be recharged from an external source of electricity, such as wall, and

the electricity stored in the rechargeable battery packs drives or contributes to drive the wheels.

PEV is a superset of electric vehicles that includes all-electric or battery electric

vehicles (BEVs), plug-in hybrid vehicles (PHEVs), and electric of hybrid electric vehicles and

conventional internal combustion engine vehicles.

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Plug-in cars have several benefits compared to conventional internal combustion

engine vehicles. They have lower operating and maintenance costs, and produce little or no

local air pollution. They reduce dependence on petroleum and may reduce

greenhouse emissions from the onboard source of power, depending on the fuel and technology

used for electricity generation to charge the batteries. Plug-in hybrids capture most of these

benefits when they are operating in all-electric mode. Several national and local governments

have established tax credits, subsidies, and other incentives to promote the introduction and

adoption in the mass market of plug-in electric vehicles depending on their battery size and all-

electric range.

Fig:-plug in electric vehicles

3. Integration of distributed energy resources:-

Unfortunately, today's infrastructure is unable to maximize the benefits of significantly more

renewable resources. Wind and solar resources are connected to the grid as "one-off" solutions

that are generally not integrated with other generation nor optimized as a reliable first- tier

energy source.

Additionally, when renewable resources are producing electricity, the possibility of congestion

on transmission lines can create a barrier to their full utilization. The variability of renewable

sources can also cause challenges. And when renewables are offline—when the wind doesn't

blow or it's a cloudy day other power generation will be needed to fill in the gaps. In some parts

of the country, overburdened power lines make it difficult to move electricity from wind farms

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into the grid for consumption. There have been cases when wind farms are forced to shut down

even when the wind is blowing because there is no capacity available in the lines for the

electricity they create. While building new infrastructure would certainly help, smart grid

technologies can also help utilities alleviate grid congestion and maximize the potential of our

current infrastructure. Smart grid technologies can help provide real-time readings of the power

line, enabling utilities to maximize flow through the power lines and smart grid technologies

will help the alleviate congestion.

Fig: - Integration of distributed energy resources

POSSIBLE SITES FOR SMART GRID IMPLEMENTATION

1. Focus on consumers (and utilities), their needs, and think bottom up -Smart Grids work

when you get the design right. They fail when consumers don’t want them. Consumers need

carrots (e.g., no more load-shedding) and not just sticks (e.g., theft detection). Engaging

consumers need to require the Internet or even a fancy in-home display – one could use mobile

phones and text messages (SMSes), which are ubiquitous in India.

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Too much of Indian smart grids today are top-down driven, if not vendor/consultant

driven. Utilities have their hands full trying to implement the Flagship R-APDRP program,

which can be considered a pre-cursor to Smart Grids. Both efforts need to synergize to avoid

duplicated or wasted effort.

2. Improved if not innovative financing and accounting- Innovative doesn’t mean

convoluted Wall Street-type instruments, just improved granularity and accuracy. Instead of

average costs, one has to account for marginal costs and time of day costs.

Use societal cost benefit analyses (CBA) for proving the business case of Smart Grids, instead

of utility Return on Investment (ROI). If a Smart Grid ends load-shedding, as of now the utility

doesn’t benefit financially, but the consumer saves on back-up power. A ROI will not capture

this, but a CBA will.

Consumers today pay for electricity meters – can they pay for a smart meter? A modern digital

meter can cost about Rs. 1,000 (almost $20), so can they cover the incremental estimated Rs.

1,000 for a simple smart meter? This isn’t the full system cost, but the utility could cover shared

infrastructure, telecoms, data center, analytics, and more. This is akin to the telecom concept

of houses with tails, where the last hop optical fiber costs are borne by the household, in

exchange for a network this can simply plug in to.

Is this fair? First, if the utility buys the smart meter, ultimately it charges the consumer down

the road. Second, regarding affordability, in most urban areas, the most basic of homes costs

many hundreds of thousands of rupees (in Mumbai, there are single-room slums that builders

have paid Rs. 10,000,000 for). This cost is a small price to pay for improved electricity.

3. Learn, try, innovate- If anyone says they have a perfect, ready smart grid at the Indian price

point, with modularity, interoperability, security, and other important features, then either

they’re unaware, or trying to sell you something. Smart grids need effort, and the 14 nationa lly

supported Pilot Projects are a step toward rollouts. Better pilots would differentiate between

learning and deployment pilots. India also needs innovation to handle communications and

other challenges, not to mention usability and consumer engagement needs. An in-home display

is available, but too expensive (if not complex) today. The government is planning a Smart

Grid Mission, which can help drive both funding and policy. Importantly, the real challenge is

not at the center but with the states, which are resource-constrained, both in skilled manpower

and cash.

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The Uttar Gujarat Vij Company Ltd (UGVCL) will roll out India's first modernized electrical

grid, or the smart grid, in Naroda and Deesa in north Gujarat by April 2014.

VARIOUS CHALLENGING ISSUES

1. Policy and regulation

The current policy and regulatory frameworks were typically designed to deal with existing networks

and utilities. To some extent the existing model has encouraged competition in generation and supply

of power but is unable to promote clean energy supplies. With the move towards smart grids, the

prevailing policy and regulatory frameworks must evolve in order to encourage incentives for

investment. The new frameworks will need to match the interests of the consumers with the utilities and

suppliers to ensure that the societal goals are achieved at the lowest cost to the consumers.

Generally, governments set policy whereas regulators monitor the implementation in order to protect

the consumers and seeks to avoid market exploitation. Over the last two decades, the trend of liberalized

market structure in various parts of the world has focused the attention of policy makers on empowering

competition and consumer choice. The regulatory models have evolved to become more and more

effective to avoid market abuse and to regulate the rates of return.

Moving forward, the regulatory model will have to adopt the policy which focuses much on long term

carbon reduction and security of supply in the defined outcomes and they need to rebalance the

regulatory incentives to encourage privately finance utilities to invest at rates of return that are

commensurate to the risk. This may mean creating frameworks that allow risk to be shared between

customers and shareholders, so that risks and rewards are balanced providing least aggregate cost to the

customer.

2. Business Scenario

The majority of examples results in negative business cases, undermined by two fundamental

Challenges:

High capital and operating costs – Capital and operating costs include large fixed

costs linked to the chronic communications network. Hardware costs do not cause

insignificant growths in economies of scale and software integration possess a

significant delivery and integration risks.

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Benefits are constrained by the regulatory framework – When calculating the

benefits, organizations tend to be conservative in what they can gather as cash benefits

to the shareholders. For example, in many cases, line losses are considered to be put on

to the customer and as a result any drop in losses would have no net impact on the utility

shareholder. The smart grid benefits case may begin on a positive note but, as

misaligned policy and regulatory incentives are factored in, the investment becomes less

attractive. Therefore regulators are required to place such policies and regulations in

place which could provide benefits both to the utilities and the consumers. Therefore

the first factor to be considered is to provide incentives to the utilities in order to remove

inefficiencies from the system. They should be aptly remunerated for the line losses on

their networks.

3. Technology maturity and delivery risk

Technology is one of the essential constituents of Smart Grid which include a broad range of

hardware, software, and communication technologies. In some cases, the technology is well-

developed; however, in many areas the technologies are still at a very initial stage of

development and are yet to be developed to a significant level. As the technologies advances,

it will reduce the delivery risk; but till then risk factor have to be included in the business

situation.

On the hardware side, speedy evolution of technology is seen from vendors all over the world.

Many recently evolved companies have become more skeptical to the communications solution

sand have focused on operating within a suite of hardware and software solutions. Moreover

the policy makers, regulators, and utilities look upon well-established hardware providers for

Smart Grid implementation. And this trend is expected to continue with increasing competition

from Asian manufacturers and, as a consequence, standards will naturally form and equipment

costs will drop as economies of scale arises and competition increases.

Many of these issues are currently being addressed in pilots such as Smart Grid task force and,

as a consequence, the delivery risk will reduce as standards will be set up.

4. Lack of awareness

Consumer’s level of understanding about how power is delivered to their homes is often low.

So before going forward and implementing Smart Grid concepts, they should be made aware

about what Smart Grids are? How Smart Grids can contribute to low carbon economy? What

benefits they can drive from Smart Grids? Therefore:

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a) Consumers should be made aware about their energy consumption pattern at home,

offices...etc.

b) Policy makers and regulators must be very clear about the future prospects of Smart

Grids.

c) Utilities need to focus on the overall capabilities of Smart Grids rather than mere

implementation of smart meters. They need to consider a more holistic view.

5. Access to affordable capital

Funds are one of the major roadblocks in implementation of Smart Grid. Policy makers and

regulators have to make more conducive rules and regulations in order to attract more and more

private players. Furthermore the risk associated with Smart Grid is more; but in long run it is

expected that risk-return profile will be closer to the current situation as new policy framework

will be in place and risk will be optimally shared across the value chain.

In addition to this, the hardware manufacturers are expected to invest more and more on mass

production and R&D activities so that technology obsolescence risk can be minimized and

access to the capital required for this transition is at reasonable cost.

6. Skills and knowledge

As the utilities will move towards Smart Grid, there will be a demand for a new skill sets to

bridge the gap and to have to develop new skills in analytics, data management and decision

support. To address this issue, a cadre of engineers and managers will need to be trained to

manage the transition. This transition will require investment of both time and money from both

government and private players to support education programs that will help in building

managers and engineers for tomorrow. To bring such a change utilities have to think hard about

how they can manage the transition in order to avoid over burdening of staff with change.

7. Cyber security and data privacy

With the transition from analogous to digital electricity infrastructure comes the challenge of

communication security and data management; as digital networks are more prone to malic ious

attacks from software hackers, security becomes the key issue to be addressed. In addition to

this; concerns on invasion of privacy and security of personal consumption data arises. The data

collected from the consumption information could provide a significant insight of consumer’s

behavior and preferences. This valuable information could be abused if correct protocols and

security measures are not adhered to. If above two issues are not addressed in a transparent

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manner, it may create a negative impact on customer’s perception and will prove to be a barrier

for adoption.

DIFFERENCE BETWEEN CONVENTIONAL AND SMART GRID