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As the power system is upgraded with more flexibility, integrated communications, and advanced controls, it will enable large-scale integration and interoperability of a greater diversity of technologies and end-use applications.<ref name="3o"/> This will generate data in vast quantities. To manage, store, and effectively use this data, the power system, communications, and information technologies should be coordinated using a '''system of systems''' approach; that is, achieve interoperable communications across smart grid technologies.<ref name="3o"/>
To transition legacy networks into more intelligent and secure electric power infrastructure, smart grid objectives should address the needs of all stakeholders, including customers and communities, and develop the standards-based smart grid approach based on interoperable solutions and flexible business processes.<ref name="3o"/>
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The deployment of the [smart grid] will be a continuing evolution and not a single event; therefore, there is a need to adapt legacy protocols to new ICT capabilities. Interoperability in ICT has generally been improved by use of a functionally layered protocol in accordance with the International Organization for Standardization (ISO) Open Systems Interconnect (OSI) reference model.<ref name="3o"/>
''Privacy'' is generally associated with collection, ownership, access control, integrity control, distribution, modifications, repurposing, reconstruction, and disposition of personally identifiable information (PII), relating to both individuals and organizations. Definitions of privacy vary across jurisdictions. New smart grid technologies and applications like smart meters, smart appliances, or customer energy management systems (EMSs) will create new privacy risks and concerns in unexpected ways. ''Recognising electric signatures'' of smart appliances and ''developing detailed, time-stamped activity reports'' by utilities or third-party service providers for efficiency analysis also reveals lifestyle details that could be legitimately characterized as PII in most jurisdictions. <ref name="3o"/>
<br/>Thus, many concerns have been raised over the ability of commercial actors to identify customer patterns of energy usage and as the successful roll-out of smart grids will also depend on public acceptance, adequate protection is crucial.
<br/>At the same time, as new capabilities are added [smart grid]s, potential new privacy concerns will emerge for which no legal mitigation currently exists. Hence, measures like privacy impact assessments need to be carried out for various smart grid use cases.
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Security programs typically focus on protection of human life, safety, and tangible and intangible assets. With a system that handles power generation, transmission, and distribution, security responsibility extends beyond the traditional walls of the data center. Two major components of smart grid security are cyber security and physical security. Physical security mechanisms protect people, data, equipment, systems, facilities, and many other assets. <ref name="3o"/>
<br/>Another concern is the susceptibility of smart grids to cyber-hacking, as highlighted by several cases in the USA where hackers were able to access smart grids through appliances such as smart meters. The European Network for Information and Security Agency (ENISA) has outlined appropriate security measures to minimise this kind of risk in a detailed report<ref> Recommended read: ENISA [https://www.enisa.europa.eu/publications/appropriate-security-measures-for-smart-grids Appropriate security measures for smart grids]</ref>. The European Commission and its Smart Grids Task Force, which includes industry representatives, take the view that data privacy and security issues can be adequately addressed through existing legislation. <ref>European Parliament Briefing, December 2015 [http://www.europarl.europa.eu/RegData/etudes/BRIE/2015/568318/EPRS_BRI(2015)568318_EN.pdf Smart electricity grids and meters in the EU Member States</ref>
Some of the main issues on the regulatory front on an EU level are:
* the liberalisation of the electricity sector, still ongoing
* the need redesign electricity market rules and integrate Renewable Energy Sources
The main obstacle here is that investments for smart grids projects deployment are rather low.
It is still rather unclear what the costs and benefits for consumers will be. As at the moment the costs tend to outweigh the benefits, there is much hostility preventing from widespread public acceptance.
Reliability is the ability of a component or system to perform required functions under stated conditions for a stated period of time [IEEE Std 493-2007]. The extent and complexity of the smart grid architecture will introduce challenges to the reliability of the grid to a magnitude that may not exist today. Equally, the magnitude and geographical extent to which disruption of the grid can be affected will no doubt increase as complex architectures and communications facilities pervade into operations of the EPS at every level. <ref name="3o" />