It is predicted that there will be between 20 billion of IoT‐connected devices [Gartner 2015]. The IoT is expected to grow to 50 billion connected devices in 2020 [Cisco 2011] and to provide valuable information to consumers, manufacturers, and utility providers. IoT is one of the platforms of today's Smart Grid, smart city, and smart energy management systems.
The most common and relevant IoT applications to Smart Grid and DER systems include energy management, distribution automation, building and home automation, and infrastructure management.
2.1.1.3.1 Energy Management
Integration of sensing and actuation systems, connected to the Internet, is likely to optimize energy consumption as a whole. It is expected that IoT devices will be integrated into all forms of energy‐consuming devices (switches, power outlets, bulbs, televisions, etc.) and be able to communicate with the utility supply company in order to effectively balance power generation and supply.
IoT technologies offer consumers, manufacturers, and utility providers new ways to manage devices and ultimately conserve resources and save money by using smart meters, home gateways, smart plugs, and connected appliances.
The introduction of electric smart plugs, in‐home displays, and smart thermostats has given consumers a choice of which household devices they want to monitor. Additionally, the IoT delivers more data for manufacturers and utility providers to reduce costs through diagnostics and neighborhood‐wide meter reading capabilities [Monnier 2013].
Besides home‐based energy management, the IoT is especially relevant to the Smart Grid since it provides systems to gather and act on energy and power‐related information in an automated fashion with the goal to improve the efficiency, reliability, economics, and sustainability of the production and distribution of electricity.
Another application is a city energy consumption service to monitor the energy consumption of the whole city [Zanella 2014]. This service enables authorities and citizens to get a clear and detailed view of the amount of energy required by different services (public lighting, transportation, traffic lights, control cameras, heating/cooling of public buildings, etc.). This service helps identify the main energy consumption sources and to set priorities in order to optimize their consumption behavior.
2.1.1.3.2 Distribution Automation
The Smart Grid provides systems to gather and act on energy and power‐related information in an automated fashion with the goal of improving the efficiency, reliability, economics, and sustainability of the production and distribution of electricity. Using advanced metering infrastructure (AMI) devices connected to the Internet backbone, electric utilities can not only collect data from end‐user connections but also manage other distribution automation devices like transformers and reclosers. Figure 2.2 shows an application involving a smart meter with capabilities as an intranet of things and a smart meter as part of the IoT.
Figure 2.2 A smart meter application in two scenarios.
Source: [Roman 2011]. © 2011, IEEE.
In the intranet‐of‐things scenario (left), the meter interacts only with SCADA system. In the IoT scenario (right), the meter interacts with the SCADA system, household members, other houses, and emergency personnel.
2.1.1.3.3 Building and Home Automation
IoT devices are being used to monitor and control the mechanical, electrical, and electronic systems used in various types of buildings (e.g. public and private, industrial, institutional, or residential). Home automation systems, like other building automation systems, are typically used to control lighting, heating, ventilation, air conditioning, appliances, communication systems, entertainment, and home security devices to improve convenience, comfort, energy efficiency, and security.
2.1.1.3.4 Infrastructure Management
Monitoring and controlling operations of offshore wind farms is a key application of the IoT [IoT 2015]. IoT applications have greater scope and flexibility, when they are able to interact not only with objects in other scenarios and domains but also with real and virtual entities.
2.1.1.4 IoT Security and Privacy
Several significant obstacles remain to fulfilling the IoT vision, chief among them security [Roman 2011]. One aspect is that IoT technology is being developed rapidly without appropriate consideration of the profound security challenges involved including the regulatory changes that might be necessary. In particular, as the IoT spreads widely, cyber attacks are likely to become an increasingly physical (rather than simply virtual) threat.
IoT developments point to future threat opportunities and risks that will arise when people can remotely control, locate, and monitor even the most mundane devices and articles to the extent that everyday objects become information security risks. Appliances such as refrigerator may be hacked and used to send spam messages [Starr 2014]. Although email application has not disturbed the power grid, it is wise to think about the danger of using a smart appliance as a platform for launching cyber attacks on Smart Grid systems.
The IoT technology is not only a human tool; instead it should be considered as an active agent because it already influences moral decision making, which in turn affects human agency, privacy, and autonomy. There are concerns regarding the impact of IoT on consumer privacy, because the Big Data focus on collecting everything and keep it around forever will have security impacts.
The IoT devices could distribute those risks far more widely than the Internet has to date. Massively parallel sensor fusion may undermine social cohesion if it proves to be fundamentally incompatible with Fourth Amendment guarantees against unreasonable search [SRI BI 2008].
The IoT and Smart Grid technologies will together be aggressively integrated into the developed world's socio‐economic fabric with little, if any public or governmental oversight [Tracy 2015]. Therefore, the technology needs to gain consumers' trust due to privacy concerns [Bachman 2015]. However, more regulations for the manufacturers may benefit the protection of the consumers.
Perceived as creepy new wave of the Internet [Halpern 2014] or as a disruptive technology [SRI BI 2008], in order to have a widespread adoption of any object identification system, there is a need to have a technically sound solution to guarantee privacy and the security of the customers among some other issues [Ishaq 2013]. The challenge is to prevent the growth of malicious models or at least to mitigate and limit their impact [Roman 2011].
IoT applications are impacted by the security features that should make attacks significantly more difficult or even impossible [EC‐EPoSS 2008]. The selection of security features and mechanisms will continue to be determined by the impact on business processes, and trade‐offs will be made between chip size, cost, functionality, interoperability, security, and privacy.
Some argue that is imperative that companies and governments need to capture these trends to ensure that the IoT is recognized as useful [EC‐EPoSS 2008]. In addition, education and information are critical for the success of the IoT technology because privacy concerns about the misuse of information are high and final users do not clearly see the advantages and disadvantages of the widespread adoption of this technology. IoT security is not only a spectrum of device vulnerability but also unique security and privacy concerns of systems using these devices.
Another recommendation is that effective and appropriate security solutions can be achieved only if the participants