Cyber-Resilient Operation of IoT-Enabled Power Grid: A Nodal Local Energy Market Approach

The decentralization of the energy grid, coupled with advanced communication technologies (LoRaWan, LTE -4G/5G- etc.), improves its operation and enhances its cyber-physical characteristics, thereby increasing the need for cyber resilience. This paper reviews the benefits of an IoT-based Local Energy Market (LEM), located at the grid's edge, suitable to capitalize on the reduced energy costs and increased flexibility offered by the heavy penetration of Distributed Energy Resources (DERs). LEM utilizes IoT-enabled devices such as DERs, Electric Vehicles (EVs), and smart meters to optimize energy services within user preferences and grid constraints. However, the increase in IoT devices introduces vulnerabilities to cyber-attacks, potentially compromising the LEM's operation and financial stability. We analyze the effects of cyber-risks through three attack scenarios involving False Data Injection on smart meters, Behind The Meter appliances, and photovoltaics, demonstrating possible outcomes like voltage violations and increased operational costs. To improve cyber-resilience, we propose a nodal Distribution Locational Marginal Pricing (DLMP) market architecture that addresses voltage and congestion issues and uses abnormal nodal prices as early attack indicators for swift intrusion detection. The IoT-based nodal market approach secures a robust local energy market structure, highlighting the essential role of cyber-security in modern power grids, and offers uninterrupted operations and enhanced resilience in decentralized energy systems.