2. Smart grid backgroundToday, the electricity is generated and distributed in ahierarchical power grid that has three distinct subsystems:generation, transmission, and distribution. The powerplants generate electricity and then step-up transformersat the transmission substations convert it into high voltageelectricity for long-distance transmission on the grid. Atthe distribution substations, this high voltage electricityis converted into medium voltage and transported overthe distribution grid to the end users. Before entering theend user premises, the medium voltage is converted intolow voltage. This process is shown in Fig. 1. This basic flowof electric power in power grid has remained unchangedfor a little over a century. However, each electric powersubsystem has evolved over time with a different pace.Hence, the level of automation varies considerably at dif-ferent components of the SG.The electric grid has transformed from a set of isolatedof power plants into interconnected grids. The currentelectric transmission grids are interconnected into regionalor national electric grids to provide multiple redundantalternate routes for electric flow in case of unbalanced
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