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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 international
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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BENEFITSOF 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-intensive
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 instantly-
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 logically
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 reliability,
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 nationally
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 malicious
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