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This paper describes the experience from the world first installation of Smart High Voltage substation with IEC 61850 Process Bus where IEEE 1588 Time Synchronization and dynamic multicast filtering have been used. IEC 61850 is one the 30 standards identified by NIST as key elements for achieving interoperability in the Smart Grid. This paper describes the experience from a high voltage substation in China where Smart Grid had been made reality by replacing large number of copper wires by intelligent electronic devices and fiber optic communications and enabling robust protection, monitoring and control functions to enhance the grid reliability. The authors provide brief introduction to the concept of digital substation and process bus, then provide overview of IEEE 1588 standard for precise time synchronization and finally describe the details of network design and IEC 61850 engineering in a substation where the novel approach with process bus and IEEE 1588 has been implemented. Part of this 110/10kV substation had been equipped with electronic CTs and PTs and Merging Units devices that convert analog signals to IEC 61850-9-2 digital format. Time synchronization had been realized with IEEE 1588 version II, implemented features regarding this standard included Transparent Clocks, peer-to-peer path delay measurement and Best Master Clock selection algorithm for dynamic selection of the clock.