The development of smart grid depends on increased deployment of two-way communication to improve its efficiency and reliability of power delivery. However, this additional dependency also expands the risk from pollution attacks, which consist of injecting malicious packets in the network. The pollution attacks are amplified by the network coding process, resulting in a greater damage to the state estimation and decision making. In this paper, we address this issue by designing an efficient authentication protocol, named EAPA, for the smart grid communication. The proposed scheme allows not only recipient nodes, but also intermediate nodes, to verify the integrity and origin of the packets received without having to decode, and thus detect and discard the malicious packets in transit that fail the verification. By this means, the pollution is canceled out before reaching the destinations. Security analysis demonstrates that the EAPA can be resilient to data/tag pollution attacks and replay attacks. Performance evaluation results show that our EAPA can reduce much more communication overhead than Wu’s scheme.