Abstract
During the late 19th and early 20th centuries, electric power had replaced steam power as the driving force of the second industrial revolution. Critical inventions such as electric lighting and electric motors had significantly improved the production rate, transportation efficiency, and people's living standard. As named by the National Academy of Engineering (NAE), electrification is "the most important engineering achievement of the 20th century." As we enter the 21st century, the focus is on the green economy. Therefore, some of the basic assumptions and/or concepts of the original power grids gradually become obsolete and need to be updated. One obvious example comes from the fast growing deployment of distributed generation (DG) of electricity all over the world. According to the International Energy Agency (IEA), solar power can contribute 2.3 percent to the world's power by 2020, rising to 8.8 percent by 2030. Based on the forecast of BTM Consult, wind power market penetration is expected to reach 3.35 percent by 2013 and 8 percent by 2018. Coming along with the potential economic and environmental benefits of DG are the increased concerns about power system stability and reliability. Specifically, traditional electricity consumers are being gradually transformed into electricity "prosumers" who not only consume energy but also produce energy and send it back to the power grid. As a result, the basic assumption of unidirectional electricity delivery (from centralized generators to electricity customers) in traditional power grids is no longer suitable. Advanced power system operation mechanisms should be developed to address specific characteristics of the DG, such as the sunlight-dependent power generation of solar plants. Similar problems exist in traditional power grids as more and more electric vehicles (EVs) are integrated for transportation efficiency improvement, while more and more smart-meters are installed for household demand response purposes. All these surging demands require a transition of the current electric power grid toward a new generation of power grid, commonly referred to as the "smart grid."
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