http://dx.doi.org/10.11142.jicems.2012.1.4.

425
Journal of International Conference on Electrical Machines and Systems vol. 1, no. 4, pp. 425~433 , 2012 425


Smart GridThe next Generation Electricity Grid with Power Flow
Optimization and High Power Quality


Jiefeng Hu*, Jianguo Zhu* and Glenn Platt**


Abstract As the demand for electric power increases rapidly and the amount of fossil fuels
decreases year by year, making use of renewable resources seem very necessary. However, due to
the discontinuous nature of renewable resources and the hierarchical topology of existing grids,
power quality and grid stability will deteriorate as more and more distributed generations (DGs)
are connected to the grids. It is a good idea to combine local utilization, local consumption, energy
storage and DGs to form a grid-friendly micro grid, these micro grids can then assembled into an
intelligent power system the smart Grid. It can optimize power flow and integrate power
generation and consumption effectively. Most importantly, the power quality and grid stability can
be improved greatly. This paper depicts how the smart grid addresses the current issues of a power
system. It also figures out the key technologies and expectations of the smart grid.


Keywords: Distributed generation, Renewable energy, Microgrid, Power quality, Smart grid



1. Introduction

The rapid depletion (hence, increase of cost) of fossil
fuels, a rising demand for electricity power, and a
government policy on the reduction of greenhouse gas
emissions are the key factors leading to a growth in the use
of distributed generation (DG) units, including both
renewable and non-renewable sources, such as photovoltaic
(PV), wind turbines, wave generators, fuel cells and
gas/steam powered Combined Heat and Power (CHP)
stations. However, due to the intermittent nature of these
DG units, the output power is not stable and may cause a
negative influence on electric appliances and impact
directly the quality of electricity when these DGs are
connected to a grid. For the spread of renewable energy to
meet the electricity power demand, they should be installed
with capabilities which mitigate the fluctuation.
On the other hand, the demand for electrical power has
been rising over the years, and existing electrical power
systems are undergoing a major transformation. Due to the
limitation of delivery capabilities and an increase in power
demand, they are getting more and more stressed. Generally,
the main drawbacks of the existing power systems can be
summarized as followings [1]:
A. Inefficiency: Almost 8% of the total power is lost along
transmission lines while only one-fifth of its generation
capacity exists to meet peak demands.
B. Domino-effect failures: It is a strictly hierarchical system
where power plants at the top of the chain ensure power
delivery to customers loads at the bottom of the chain. In
other words, the power flows in only one direction, which
leads to large-scaled blackouts triggered by power plant
intermittence or even transmission line problems. The most
well-known failure occurred in August 2003, when 50
million customers in the USA and Canada lost power for up
to two days due to cascading events.
C. Instability: The unprecedented fluctuation of demand for
electrical power, coupled with an increasing penetration
level of DGs and lagging investments in the electrical
power infrastructure, has decreased system stability.
In order to address the issues of the existing electricity
grids mentioned above and at the same time exploit
renewable energy sources effectively, a next generation
electricity grid called the Smart Grid was proposed
recently. At the generation level, it is expected to emerge as
a well-planned plug and play integration of smart
microgrids. At the distribution and transmission level, the
smart grid integrates small microgrids through dedicated
highways for command, data, and power exchanges.
Therefore, the efficiency, reliability, and security of the grid
can be improved greatly by dynamic optimization of
* School of Electrical, Mechanical and Mechatronic Systems,
University of Technology, Sydney, Australia(Jiefeng.Hu@uts.edu.au,
Jianguo.Zhu@uts.edu.au)
** Energy Technology, CSIRO, Australia.( Glenn.Platt@csiro.au )
Received 29 February 2012; Accepted 27 June 2012

426 Jiefeng Hu, Jianguo Zhu and Glenn Platt


426
electric-system operations, maintenance, and planning. The
smart grid can thus be thought of as a platform where both
sides of supply and demand meet [2]-[5].
Though the smart grid is still in the pilot stage, in the last
decade many countries have started the process of
liberalisation of their electric systems; which has been
accompanied by a rapidly growing presence of DG of
various technologies. Some countries have even established
R&D agendas that would effectively and efficiently
contribute to achieving a common vision of successful
smart grid implementation, and research groups and
experimental sites have been set up to take the first step [6]-
[8]. This paper aims to provide guidances for the
development of the next generation electricity grid by
comprehensive investigation into the state of art of smart
grid technology and its tendencies. First, a small microgrid
will be introduced and its control strategies will be studied.
Next the smart grid concept will be presented and its key
technologies and challenges will be illustrated. Finally, a
conclusion related to smart grid expectations and standards
will be drawn.

2. Microgrid

From the power distribution perspective, to mitigate the
negative influences on a grid and incorporate effectively
renewable generation, it is a good idea to combine local
utilization, energy storage, and distributed generation to
form a grid-friendly distributed generation system, namely
a microgrid. In addition, considering that most of the power
outages and disturbances take place in the distribtution
network, the first step towards the smart grid should start at
the bottom of the chain, in the distribution system [1].

2.1 Microgrid Topology

Compared to a single DG, a microgrid has more capacity
and control flexibilities to mitigate the system fluctuation
and to improve power quality. On the other hand, in order
to achieve the plug and play feature, the installation of
additional DGs will not cause a major impact on the power
quality and stability of the distributed generation system
and will not change the control strategies of DGs already in
the microgrid [9]. Generally a stable AC bus and a DC bus
will be developed to interconnect the energy sources.
Fig. 1 shows a typical microgrid system set-up. It
consists of three control levels. The first level is the DC
microgrid, including a small capacity wind turbine (WT), a
PV panel and a battery bank, which are connected to a DC
point of common coupling (PCC). At the second level,
single-phase inverters are used to interface PVs to the 240V
AC PCC while a WT and a gas microturbine (MT) supplies
power to this common AC bus through three-phase
converters. A load bank controlled in a binary system is
utilized to simulate the fluctuated profile of power
consumption. There are also wind turbines, PVs and gas
=
~
(
PV1
=
~
(
=
~
(
Load
Bank
=
~
(
=
= =
~
~
.
.
Site
Loads
Grid
~
~
~
(
i
1
P1 Q1 P3 Q3 P2 Q2 P4 Q4
i
2
i
4
i
v
i
L
PL QL
T1
T2
PV QV
AC PCC
DC PCC
i
g
Pg Qg
Phase A
Phase B Phase C
Battery
Bank
i
3
PV2 PV3 WT2 PV4 WT1
~
~
~
(
MT
i
5
P5 Q5
. . .

Fig. 1. Microgrid configuration.
Smart GridThe next Generation Electricity Grid with Power Flow Optimization and High Power Quality 427



MT with higher capacity at the third level, which is not
depicted in Fig. 2. In this distributed generation system, the
gas MT not only provide a voltage signal to which all other
inverters can synchronize to, but also control the voltage
and frequency of AC PCC. The control of the DGs and the
data acquisition are fulfilled through a supervisory control
and data acquisition (SCADA) system.
In such a system, the major part of the electricity
produced by DGs is consumed locally, and the excess will
be exported to the grid. If the load is greater than local
generation, more power can be obtained from the grid.
Besides, it can operate at an islanded mode in which
electricity power can continue to be supplied to the load
bank. The control centre will coordinate/dispatch the
generators and energy storage devices according to the
demands of local consumption. The main objectives of this
microgrid are to exploit the renewable energy effectively
and efficiently and at the same time to try to participate in
grid voltage support and stability improvement.

2.2 Main Issues of Microgrid

Due to the intermittent nature of the renewable sources
and fluctuation of the load profile, excess variations of the
grids voltage and frequency become issues, which cause
negative influences on the quality of electricity and affect
the performance of electric appliances.
Fig. 2 shows the total power output behavior of the PV
array from 6:00 am to 8:00 pm on a sunny day (21-10-2011)
and a cloudy day (23-10-2011). It can be seen that, on a
sunny day, the PV output power increased smoothly in the
morning, reaching a peak value of about 19 kW at around 2
pm and decreased gradually in the afternoon, hitting the
bottom of 0 kW at around 7 pm. However, the output power
features an obviously fluctuated characteristic on a cloudy
day.
Fig. 3 shows the response of voltage and frequency at AC
common bus to changing power generation and a fluctuated
load profile during the 24-hour period. It can be seen that
the voltage and frequency become unstable in the daytime,
experiencing obvious drops at 7:00, 8:30 and 17:00. In fact,
these variations of the voltage and frequency would cause
negative influences to the grid network and affect the
performance of electric appliances.

2.3 Microgrid Control Strategy

In a microgrid system, The system control centers
monitor and control the system continuously to guarantee
the quality of the power, namely the frequency and
amplitude of the voltage at PCC. The key point is to control
the parallel inverters so that they can work well to achieve
high performances in the microgrid. Therefore, it is
essential to develop advantaged control methods for the
inverters to control the output voltage. From the perspective
of utility/grid, the converters should be controlled not only
to capture the maximum real power from the renewable
energy sources, but also to provide reactive power
according to the requirement of improving power quality
and enhancing grid stability. Generally speaking, during the
grid-connected mode, each DG is assigned to dispatch real

Fig. 2. Total PV output power measured in two days

0
10
20
30
4:48 9:36 14:24 19:12
P
o
w
e
r

(
k
W
)

Time (hour:minute)
Sunny day
Cloudy day

(a)

(b)
Fig.3. Response of voltage and frequency of the microgrid
during the 24-hour period strategy. (a) voltage, (b)
fre frequency


428 Jiefeng Hu, Jianguo Zhu and Glenn Platt


428
power and reactive power at a common frequency, which is
fixed by the grid. When changed to the islanded-mode, the
DGs will be required to raise their real power outputs with
specified characteristics to meet the total load demand.
In order to propose appropriate control methods for
inverter-interfaced DGs in a microgrid, it is necessary to
investigate the basic principle of power flow. The flow of
real power and reactive power between two nodes separated
by a line impedance can be expressed as [10]

1
1 2 2 2 2
( cos ) sin
V
P R V V XV
R X

(1)

1
2 1 2 2 2
sin ( cos )
V
Q RV X V V
R X

(2)
where, V
1
and V
2
are the magnitudes of the voltages at these
two nodes, is the angle between these two voltage vectors.
R and X are the resistance and reluctance of the connected
line, respectively. Considering is typically small and R
can be neglected, (1) and (2) can be simplified as
1 2
sin
VV
P
X
(3)
2
1 1 2
cos V VV
Q
X X

(4)
(3) and (4) indicate that P is predominately dependent on
while Q mostly depends on the voltage magnitude.
Therefore, the real power can be controlled by regulating
the voltage frequency while the reactive power can be
controlled by regulating the voltage magnitude.
In microgrid control, many solutions have been proposed,
such as centralized control, master-slave operation, average
load sharing (ALS), 3C, or the droop method. The most
common method is frequency and voltage droop control,
which was initially proposed in [11]. Based on power flow
analyzed previous, the magnitude and the frequency of each
DG output voltage are controlled with a droop
characteristics described as
* *
( )
i i i i
m P P (5)
* *
( )
i i i i
E E n Q Q (6)

where P
i
and Q
i
are the actual real and reactive power of
DG i,
i
and E
i
are the actual frequency and magnitude of
DG i output voltage, P
i
*
and Q
i
*
are the rated capacity of the
ith inverter, m
i
and n
i
are the droop slopes of DG i.
For better illustration of the droop method, the P- droop
characteristics are depicted in Fig. 4. In grid-connected
mode, the DGs supply their rated power at rated frequency
to the loads together with the grid. In islanded mode, the
output real power of DGs will increase from P
1
*
and P
2
*
to
P
1
and P
2
according to their individual droop characteristics
to meet the total load demand at a reduced frequency .
The output voltage magnitude of each DG can be regulated
using Q-E droop characteristics in a similar manner. In the
droop method, the control loop adjusts the output voltage
frequency and amplitude of the inverter automatically to
compensate the active and reactive power unbalances.
Therefore, the changes in load can be taken up by the
inverters in a predetermined manner and essentially utilizes
the system frequency as a communication link between the
DGs within a microgrid [12], [13]. However, the controller
based on the droop method should be designed carefully,
taking into account the tradeoff between the power sharing
accuracy and the amplitude and frequency deviation of the
output voltage.
To implement and validate the control strategy, a series
of experimental tests has been carried out. The
configuration of the microgrid is shown in Fig. 1. For the
sake of simplicity, only a 30 kW gas microturbine, a 20 kW
PV array and a programmable load bank are employed in
this test. Fig. 5 shows part of the REIF laboratory with the
control room in the foreground and PV inverters in the

max

min

P
1min
P
2min
P
2max
P
1max
P
1
P
2
P
1
*
P
2
*
Fig. 4. Active power and frequency droop characteristics.

Fig. 5. Control centre
Smart GridThe next Generation Electricity Grid with Power Flow Optimization and High Power Quality 429



background.
In grid connected-mode, PV and load bank are connected
to a common AC bus and the microgrid is connected to the
utility grid. The PV operated at maximum power points
(MPPs) with unit power factor, the total power output of PV
at this time of the current experiment is about 4.5 kW. The
load bank is set to zero at the beginning, then rises up to 3
kW and 10 kW at 2.2 s and 5.3 s, respectively. As shown in
Fig. 6, the PV and the utility grid supply power to the load
together. It can be seen that the major part of the electricity
produced by DGs is consumed locally, and the excess can
be exported to the grid. If the load is greater than local
generation, more power can be obtained from the grid. On
the other hand, the amplitude and frequency are quite stable,
presenting only 0.6 V voltage and 0.02 Hz frequency
variation, which is expected because of the connection to
the utility grid, as shown in Fig. 7.
In the islanded mode, the microgrid was isolated from
the utility grid, the PV and microturbine together supplied
power to the load bank. The MT regulated its output
voltage instantaneously so the change in the power demand
could be picked up quickly. The total active PV output
power at this time of the current experiment was about 2.8
kW. The load profile was set in such a pattern that there was
constant 5 kW resistive load throughout this test while 5
kVar inductive load was added and removed at 1.9 s and 3.5
s, respectively. It can be seen that the MT could be
controlled to regulate its power output by regulating its
voltage and frequency based on a droop characteristic to
take up the load changes, which can be observed in Fig. 8
and Fig. 9. It is noted that the output power of MT
experienced an obvious surge at 1.9 s, leading to sudden
drops of voltage and frequency, which in return caused PV
shunt reduction. The reason for this phenomena is that an
unwanted value of the programmable load bank appeared
momentarily because the load is controlled in a binary
fashion.
Derived from the conventional droop principle, many
improved droop methods have been developed in the last
few years [9], [12]-[24]. For example, an improvement in
transient response is achieved by introducing power
derivative-integral terms in [12],[14]. Accurate power
sharing and voltage harmonics mitigation are obtained by
introducing a virtual impedance [9], [15]. In [16], an angle
controller is proposed to obtain better load sharing by
drooping the converter output voltage angle instead of
frequency.
In addition to power sharing, there are also control
strategies that focus on other aspects of microgrid
performance. In [17], a compensator is designed for a
microgrid with unbalanced and nonlinear loads with the
purpose of improving power quality. As well, an enhanced

Fig. 6. Power sharing in grid-connected mode.


Fig. 7. Response of voltage and frequency in grid-.
connected mode
-6000
4000
0 2 4 6
P
o
w
e
r

(
W
)

Time (sec)
P_PV P_LB P_Grid
49.95
50
50.05
239
239.2
239.4
239.6
239.8
240
0 1 2 3 4 5 6
V
o
l
t
a
g
e

(
V
)

Time (sec)
Frequency
Voltage
F
r
e
q
u
e
n
c
y

(
H
z
)


Fig. 8. Power sharing in islanded mode.


Fig. 9. Response of voltage and frequency in islanded
mode.
-5000
0
5000
10000
0 2 4 6
P
o
w
e
r

(
W
,

V
a
r
)

Time (sec)
Q_MT P_MT P_PV
P_PV
P_MT
Q_MT
48.5
50.5
220
240
260
0 1 2 3 4 5
V
o
l
t
a
g
e

(
V
)

Time (sec)
F
r
e
q
u
e
n
c
y

(
H
z
)

Voltage
Freq
430 Jiefeng Hu, Jianguo Zhu and Glenn Platt


430
frequency droop controller is also proposed for better
dynamic response and smooth transition between the grid-
connected and islanded modes. [18] proposed an improved
droop control method for a PV shunt connected converter to
support the reactive power required by the grid when
voltage sag is presented into the grid. More recently, an
internal voltage loop with a variable structure control
element and an outer droop-based power-sharing loop are
proposed to achieve seamless mode transfer in [19].

2.4 Research Focus in Microgrid

As a systematic integration of a DG system, a microgrid
can offer technical advantages in terms of power quality
and reliability, as well as energy management control
flexibility. Considering the issues and challenges mentioned
above, more advantaged control techniques and more
improvement need to be achieved in the future. Generally,
the main research focus of microgrid research would be:
A. Power Sharing
The converter interfaced DGs in a microgrid should
pick up the load changes automatically and smooth the
voltage and frequency at the point of common coupling
(PCC), i.e. minimize the voltage and frequency fluctuation
the most.
B. Power Quality
Unstable output power from DGs, unbalanced and
nonlinear loads, and disturbances of the grid, would be a
challenge for stabilization of the frequency and voltage and
minimization of the total harmonic distortion of injecting
current.
C. Seamless Transfer Between Grid-connected and Islanded
Mode
The power flow between the grid and microgrid should
be bidirectional for the sake of effective utilization
ofrenewable energy. More importantly, the isolation of the
microgrid should not cause a major influence on local loads.
In contrast, re-synchronization of the microgrid to the
utility should be conducted smoothly and quickly.
D. System Stability and Reliability
Before being islanded from the utility, the microgrid
should be controlled to compensate for reactive power to
support grid voltage drops, i.e., low voltage ride through
(LVRT) ability is required.

3. Smart Grid

3.1 Smart Grid Technology

As was described in the previous section, a microgrid is
proposed to exploit the distributed generation units
efficiently and effectively, its plug and play feature
ensures power generation and consumption without a major
impact on either the grid or the customers. In order to
increase the power delivery capability of the grid, optimize
the power flow to a large area and improve the power
quality, it is essential to assemble small microgrids together
to form an intelligent network system, namely a smart grid.
A smart grid is proposed to address the issues of the
existing grid. It is a well-planned plug-and-play integration
of smart microgrids that will be interconnected through
dedicated highways for command, data, and power
exchange [1]. Fig. 10 shows a smart grid topology; it is
seen that there are two transmission lines throughout the
smart grid, i.e. a digital highway and a physical highway.
The information from the smart meters and fault diagnosis
monitors is corrected, and is then sent to a control center
through the digital highway, then the control center controls
the electronic device to optimize the power flow and heal
the grid faults on the physical highway. Since the smart grid
is an electricity network that can intelligently integrate the
actions of many microgrids, there is a distinct advantage
compared to the conventional power grid: that it can
efficiently deliver a sustainable, economic and secure
electricity supply.
At the condition monitor and data acquisition level of the
smart grid, the consumption records, alarms, and status
from every single customer can be read by the automated
meter reading (AMR) systems in the distribution network.
But the AMRs capability is restricted to reading meter data
due to its one-way communication system. Nowadays,
utilities move towards advanced metering infrastructure
(AMI) because it provides utilities with a two-way

Fig. 10. Smart grid topology

Smart GridThe next Generation Electricity Grid with Power Flow Optimization and High Power Quality 431



communication system to the meter, as well as the ability to
modify customers service-level parameters [1], [3], [6]-[8].

3.2 Smart City

We are experiencing unprecedented socioeconomic crises.
Urban growth and migration are putting significant stress
on city infrastructures, as demand outpaces supply for
energy, water, transportation, healthcare, education, and
safety. Therefore, there is an urgent need for smart cities
where infrastructure and resources can be managed
effectively to cater to the existing and future needs of their
citizenry [24]. A smart city is a system that incorporates
physical and information technology facilities, networks,
services and assets, among which a smart power system
plays an essential role in the daily operation.
From the point of view of the smart grid, Fig. 11
illustrates a smart city configuration in the future. The
large-scale of distributed generation units such as wind
turbines, PV arrays and CHP will supply electrical power to
the network together with conventional power plants. It is
noted that the smart grid would and should coexist with the
existing electrical grid, and it is required to be self-healing
and resilient to system anomalies. The intelligent
transmission and distribution system will then optimize the
power flow and balance the power generation and
consumption effectively according to the real-time data
from smart meters. On the power demand side, consumers
not only can enjoy high-quality power, but also supply the
surplus power back to the grid because small scale
renewable power generation units, such as PV panels, small
wind turbines, and Bio-heat generators will be installed in
the buildings. Smart meters are used to receive real-time
data on grid conditions, power consumption and pricing
from the market. Therefore, consumers can conduct
purchases and sale for electrical power based on practical
requirements and the electricity market.

4. Key Technologies and Challenges of Smart Grid

4.1 Power Electronics Control Technology

Control strategies of power electronics with excellent
steady-state and dynamic performance are very important in
active and reactive power regulations, current, voltage and
frequency control. Though some methods have been
proposed such as improved droop control (as mentioned in
Section 2), for larger microgrids with numerous inverters,
the depth of available literature is less comprehensive and
doubts remain as to the scalability of techniques proposed
for small-scale systems.

4.2 New Semiconductor Device


Fig. 11. Smart city

432 Jiefeng Hu, Jianguo Zhu and Glenn Platt


432
The silicon-based semiconductor device is reaching its
physical limits in power handling and switching frequency
capabilities. Seeking new material technology is very
exigent for a smart grid. As the need for renewable energy
technologies, energy storage technologies, and smart grid
technologies has grown in recent years, power
semiconductor devices with high-voltage, high-frequency,
and high temperature operation capability are required [2].

4.3 Information Technology (IT)

Increasing numbers of smart grid deployments are using
Internet technologies, broadband communication, and
nondeterministic communication environments. An
advanced technique for huge data processing is essential in
information collection and energy management within the
smart grid.

4.4 Security and Economic Issues

As the grid incorporates smart metering and load
management, user and corporate privacy has raise concern.
For example, will the utilities companies be able to control
the customer load without the customers prior permission?
Will private power consumption information be stolen by
cyber-hackers with illegal motivation? Will the electrical
power purchase and sale behavior from individuals bring
chaos to the grobal market? These are the security and
economic issues that need to be addressed before the
construction of the next generation smart grid.

5. Conclusion

The electrical power industry is undergoing rapid change
due to the rapid depletion of fossil fuels, climate change,
rising demand for electrical power, and the rising cost of
energy. The speed of such transformations is predicted to
increase in the near future. In smart grid development and
standard establishment, North America and Europe are
taking solid steps towards using smart grids. NIST
Framework and Roadmap for microgrid standards and the
European smartgrid technology platform have identified
priority areas for standardization and application. In
Australia, the Smart Grid Australia (SGA) research working
group, consisting of experts from CSIRO and some
universities, is making an effort to contribute towards
development of a smart grid. Some Asian countries, such as
Singapore, Japan, and China, are also beginning to budget
much investment on smart grid research. Fig. 12 illustrates
the current small microgrid installation locations around the
world. It can be seen that near half of the installations are
located in North America, followed by Europe with 16%,
Australia with 12%, and Asia with 8%.

Fig. 12. Locations of existing smart microgrid installations

Regardless of how quickly various utilities embrace
smart grid concepts, one thing that is certain is that more
and more attention will be paid to the exploitation of
renewable energy resources and the development of smart
grids, and that the technical exchange will extend from a
domestic pattern to global cooperation. Governments and
utilities around the world will work together to come up
with standards on power quality and an information
comunication network to integrate smart grid components.

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Jiefeng Hu received B.S. and M.S.
degrees from Beijing University of
Aeronautics & Astronautics, China,
in 2007 and 2009, respectively,
both in electrical engineering. He
is currently working toward the
Ph.D. degree at University of
Technology, Sydney, Australia. His
research interests include electric drives, control of power
converters, and renewable energy for distributed
generations.


Jianguo Zhu received his B.E. in
1982 from Jiangsu Institute of
Technology, China, his M.E. in 1987
from Shanghai University of
Technology, China, and his Ph.D in
1995 from University of Technology,
Sydney (UTS), Australia, all in
electrical engineering. He currently holds the positions of
Professor of Electrical Engineering and Head for School of
Electrical, Mechanical and Mechatronic Systems at UTS,
Australia. His research interests include electromagnetics,
magnetic properties of materials, electrical machines and
drives, power electronics, and green energy systems. He is a
senior member of IEEE, and he has served as chair and
committee member in many international conferences.


Glenn Platt received the Ph.D.
degree from the University of
Newcastle, Australia. He was a
research engineer with Nokia
Mobile Phones, Denmark.
Currently he is the theme leader of
Energy Technology of
Commonwealth Scientific and
Industrial Research Organisation (CSIRO), Australia,
investigating ways of improving world energy usage.