applied

sciences
Review
Digitalization Processes in Distribution Grids: A Comprehensive
Review of Strategies and Challenges
Morteza Aghahadi 1, * , Alessandro Bosisio 2 , Marco Merlo 1 , Alberto Berizzi 1 , Andrea Pegoiani 3
and Samuele Forciniti 3

1 Energy Department, Politecnico di Milano, 20156 Milano, Italy; [email protected] (M.M.);

[email protected] (A.B.)
2 Department of Electrical, Computer and Biomedical Engineering, University of Pavia, 27100 Pavia, Italy;
[email protected]
3 A2A S.p.A., 20128 Milano, Italy; [email protected] (A.P.); [email protected] (S.F.)
* Correspondence: [email protected]; Tel.: +39-02-2399-8505

Abstract: This systematic review meticulously explores the transformative impact of digital tech-
nologies on the grid planning, grid operations, and energy market dynamics of power distribution
grids. Utilizing a robust methodological framework, over 54,000 scholarly articles were analyzed
to investigate the integration and effects of artificial intelligence, machine learning, optimization,
the Internet of Things, and advanced metering infrastructure within these key subsections. The
literature was categorized to show how these technologies contribute specifically to grid planning,
operation, and market mechanisms. It was found that digitalization significantly enhances grid
planning through improved forecasting accuracy and robust infrastructure design. In operations,
these technologies enable real-time management and advanced fault detection, thereby enhancing
reliability and operational efficiency. Moreover, in the market domain, they support more efficient en-
ergy trading and help in achieving regulatory compliance, thus fostering transparent and competitive
markets. However, challenges such as data complexity and system integration are identified as critical
hurdles that must be overcome to fully harness the potential of smart grid technologies. This review
not only highlights the comprehensive benefits but also maps out the interdependencies among the
planning, operation, and market strategies, underlining the critical role of digital technologies in
Citation: Aghahadi, M.; Bosisio, A.; advancing sustainable and resilient energy systems.
Merlo, M.; Berizzi, A.; Pegoiani, A.;
Forciniti, S. Digitalization Processes in Keywords: digitalization in distribution power systems; grid planning; grid operations; energy
Distribution Grids: A Comprehensive market; artificial intelligent; machine learning; optimization techniques
Review of Strategies and Challenges.
Appl. Sci. 2024, 14, 4528. https://
doi.org/10.3390/app14114528

Academic Editor: Andreas Sumper 1. Introduction

The shift towards digitalizing distribution power grids marks a pivotal step in modern-
Received: 3 May 2024
izing energy infrastructure, emphasizing decentralization and renewable energy adoption.
Revised: 22 May 2024
Accepted: 23 May 2024
As distribution grids encounter increased variability and the integration of distributed
Published: 25 May 2024
energy resources (DERs), the necessity for dynamic grid management escalates. Digital-
ization serves as a transformative force, revolutionizing grid planning, operations, and
market interactions.
The current infrastructure, supported by technologies like supervisory control and
Copyright: © 2024 by the authors. data acquisition (SCADA) systems and intelligent electronic devices (IEDs) in medium
Licensee MDPI, Basel, Switzerland. voltage (MV) networks, provides a solid base for adopting more advanced digital solutions
This article is an open access article by distribution system operators (DSOs). However, the challenge lies in handling the vast,
distributed under the terms and complex data generated by smart grid (SGs), which stretches the limits of traditional data
conditions of the Creative Commons processing methods.
Attribution (CC BY) license (https:// Artificial intelligence (AI) offers, for instance, breakthroughs in load forecasting, grid
creativecommons.org/licenses/by/ stability, fault detection, and security, as well as enhancing smart grid reliability and
4.0/).

Appl. Sci. 2024, 14, 4528. https://doi.org/10.3390/app14114528 https://www.mdpi.com/journal/applsci

Appl. Sci. 2024, 14, 4528 2 of 33

resilience. The potential of AI underscores the importance of further exploration and

implementation in developing fully optimized SG systems [1].
This transformation is underscored by multiple studies [2–5] and is driven by advance-
ments in the Internet of Things (IoT), artificial intelligence (AI), edge computing, advanced
metering infrastructure (AMI), and blockchain.
Moreover, the development of electric digital twins and service-oriented architec-
tures marks a shift towards more dynamic, automated, and resilient energy systems [2,3].
This indicates a future where energy systems are adaptable to changing demands and
environmental challenges [2,4,5].
The successful digital transformation of the power sector extends beyond technology
to strategic coordination [6]. As demonstrated by companies like Jibei Electric Power Com-
pany, this transformation needs to align digital efforts with broader organizational goals,
enhancing power transmission, distribution capabilities, and internal digitalization [6].
Recent scholarly works offer insights into the complex nature of SG technologies. They
illustrate the impact of digitalization and renewable energy integration on power systems
and consumers [5,7–12]. From decentralizing renewable energy generation to leveraging
broadband over power line infrastructure for unified data exchange, these technologies
balance supply and demand and enhance grid intelligence.
This systematic literature review explores the expansive terrain of digitalization in
power distribution grids, categorizing our analysis into three primary domains: grid
planning, grid operations, and the energy market. Utilizing a robust search methodology,
we identified a substantial corpus of literature from IEEE Xplore, encompassing both
conference papers and journal articles, totaling 13,700 articles in the planning domain,
31,859 in operations, and 9098 in the energy market from 2014 to January 2024.
To ensure transparency and reproducibility, this section details the procedure followed
in our study using Python version 3.10.13 scripting to manage and analyze data related to
digital technologies in power distribution grids.
The process begins with the initialization and importing of essential libraries, including
os for file operations, pandas for data manipulation, NumPy for numerical operations, and
matplotlib.pyplot and seaborn for data visualization.
Next, the directory containing the CSV files is defined, with the scholarly articles
obtained from an advanced IEEE Xplore search and listing all CSV files in this directory to
process them systematically. Then, we initialize empty lists to store dataframes categorized
by their relevance to planning, operations, and market.
Each CSV file is read and, based on the category inferred from the file name, the data
are appended to the respective list (planning, operation, or market). Once the files are read
and categorized, the dataframes in each category are concatenated into single dataframes
(one for each category). Duplicates are then removed to ensure data integrity.
A list of relevant keywords related to digital technologies is defined and the occur-
rences of these keywords in the articles’ titles, abstracts, keywords, and IEEE terms is
counted for each category. Following this, the percentage of articles containing each key-
word was calculated to understand the proportional emphasis on different technologies.
To visually represent the keyword counts and percentages, we plotted bar charts
across the three categories: planning, operation, and market. Additionally, a report was
generated to identify and count any duplicate entries in the ‘Document Title’ column for
each category.
Insights were derived based on the data analysis, and a detailed discussion on the
challenges and potential solutions related to data complexity and system integration was
provided. Finally, the procedure concludes after deriving insights and generating the
necessary visualizations and reports.
Our analysis employed a two-layered approach, enhanced by Python scripting for
precision and efficiency. Initially, we categorized articles based on keywords like ‘power
distribution grid’ and ‘distribution network’, supplemented with domain-specific terms:
‘planning’, ‘operation’, and ‘market’. To ensure the integrity and uniqueness of our dataset,
Appl. Sci. 2024, 14, 4528 3 of 35
Appl. Sci. 2024, 14, 4528 3 of 33

‘planning’, ‘operation’, and ‘market’. To ensure the integrity and uniqueness of our da-
taset,
we we rigorously
rigorously removedremoved duplicate
duplicate paperspapers that appeared
that appeared acrossacross categories.
categories. Following
Following the
keyword
the keywordanalysis, we we
analysis, examined
examined thethe
temporal
temporal distribution
distributionofofthese
thesearticles
articles to
to capture
capture
the evolving focus
focus onondigitalization
digitalizationover
overthethepast
pastdecade.
decade. This
This investigation
investigation highlights
highlights an
an increasing
increasing trend
trend for for research
research publications
publications on this
on this subject,
subject, indicative
indicative of theofescalating
the escalating
inte-
integration
gration and and significance
significance of digital
of digital technologies
technologies in thisinfield.
this Figure
field. Figure 1 illustrates
1 illustrates the
the annual
annual number of publications in this area from 2014 through to 2023,
number of publications in this area from 2014 through to 2023, revealing that research revealing that
research interest
interest has morehasthanmore than doubled
doubled over the over the past decade.
past decade.

Figure 1. Trends in Digitalization Research in Power Distribution (2014–2023).

Figure 1. Trends in Digitalization Research in Power Distribution (2014–2023).

The second
The second layer
layerofofanalysis
analysisinvolved
involved a deeper
a deeper dive intointo
dive keywords
keywords representing
representing var-
ious aspects of digitalization such as ‘Artificial Intelligence’, ‘Machine
various aspects of digitalization such as ‘Artificial Intelligence’, ‘Machine Learning’, andLearning’, and ‘Op-
timization’. ThisThis
‘Optimization’. phase waswas
phase critical for assessing
critical howhow
for assessing digital technologies
digital are specifically
technologies are specif-
ically addressed within the literature. The keywords were meticulously selectedonbased
addressed within the literature. The keywords were meticulously selected based their
relevance to digitalization, as determined by an extensive review of
on their relevance to digitalization, as determined by an extensive review of the literature the literature and
practical experience, ensuring that they closely align with the core aspects
and practical experience, ensuring that they closely align with the core aspects of digital of digital trans-
formation in power
transformation systems.
in power systems.
Figure 2 reveals the prominence of ‘Optimization’ across all categories categories in in our
our study,
study,
with 5870
with 5870mentions
mentionsininplanning
planningand andpeaking
peakingwithwith 9711
9711 inin operation,
operation, highlighting
highlighting its its cru-
crucial
cial role
role in enhancing
in enhancing gridgrid efficiency
efficiency andand management.
management. ‘Smart
‘Smart Grid’
Grid’ technologies
technologies alsoalso fea-
feature
ture prominently,
prominently, with with nearly
nearly 1959 1959 mentions
mentions in planning
in planning and and
52945294 in operation,
in operation, reflecting
reflecting the
the integral role of SGs in advancing grid intelligence. In the market
integral role of SGs in advancing grid intelligence. In the market category, ‘Optimization’category, ‘Optimiza-
tion’‘Smart
and and ‘Smart
Grid’ Grid’ are significant
are significant again,again, accompanied
accompanied by a notable
by a notable focusfocus on ‘Block-
on ‘Blockchain’
chain’
(617 (617 mentions),
mentions), underscoring
underscoring a shift towards
a shift towards secure,secure,
efficient efficient
energyenergy transactions.
transactions. These
Theseillustrate
data data illustrate the diverse
the diverse yet focused
yet focused digitalization
digitalization effortsefforts
withinwithin the power
the power distri-
distribution
grid,
bution showcasing a stronga trend
grid, showcasing strongtowards integrating
trend towards advanced
integrating technologies
advanced for improved
technologies for im-
grid
provedoperations and market
grid operations and interactions.
market interactions.
Figure 3 depicts the percentage distribution of these keywords within each category,
providing a relative measure of emphasis. Notably, ‘Optimization’ featured prominently,
constituting 27.69% of the planning category and an even more significant 22.35% of the op-
eration category, highlighting its critical role in enhancing efficiency and decision-making
processes. In the market category, ‘Optimization’ also stood out at 23.32% of the total
number of articles, demonstrating its pervasive influence across all sectors. ‘Smart Grid’
technologies followed closely in the market category, with 17.71%, underscoring their grow-
ing impact on market-driven energy innovations. It is crucial to note that these percentages
are relative to the total number of articles within each respective category and do not sum
to 100% due to the common occurrence of articles mentioning multiple keywords.
In the secondary analysis phase, we assessed the multidisciplinary nature of the articles
by calculating the percentage within each category that contained more than one specified
digitalization-related keyword. This analysis revealed significant thematic overlap: 38.35%
in planning, 35.47% in operation, and 46.10% in market. These percentages highlight a
strong trend for integrating multiple digital technologies within power distribution grid
research, underscoring the complexity and interconnectedness of this field.
Appl. Sci. 2024, 14, 4528 44of
of 35
33

Appl. Sci. 2024, 14, 4528 Figure 2.2.Distribution of Digitalization Keywords in theinPower Distribution Grid Literature 5 of
by 35
Cat-
Figure Distribution of Digitalization Keywords the Power Distribution Grid Literature
egory.
by Category.

Figure 3 depicts the percentage distribution of these keywords within each category,
providing a relative measure of emphasis. Notably, ‘Optimization’ featured prominently,
constituting 27.69% of the planning category and an even more significant 22.35% of the
operation category, highlighting its critical role in enhancing efficiency and decision-mak-
ing processes. In the market category, ‘Optimization’ also stood out at 23.32% of the total
number of articles, demonstrating its pervasive influence across all sectors. ‘Smart Grid’
technologies followed closely in the market category, with 17.71%, underscoring their
growing impact on market-driven energy innovations. It is crucial to note that these per-
centages are relative to the total number of articles within each respective category and do
not sum to 100% due to the common occurrence of articles mentioning multiple keywords.
In the secondary analysis phase, we assessed the multidisciplinary nature of the arti-
cles by calculating the percentage within each category that contained more than one spec-
ified digitalization-related keyword. This analysis revealed significant thematic overlap:
38.35% in planning, 35.47% in operation, and 46.10% in market. These percentages high-
light a strong trend for integrating multiple digital technologies within power distribution
grid research, underscoring the complexity and interconnectedness of this field.
Furthermore, a significance threshold of 2% (red dashed line) for keyword percent-
ages was set to focus on the most impactful terms within each category. Keywords sur-
passing3.this
Figure thresholdEmphasis
Proportional were further analyzed inKeywords
on Digitalization the context of the
Across existing
Power literature
Distribution to
Grid
evaluate
Categories.
Figure their prominence
3. Proportional Emphasis andonapplications,
Digitalizationas detailedAcross
Keywords in thePower
references. Table Grid
Distribution 1 collates
Cate-
specific references from this research, offering a detailed exploration of the role of each
gories.
Furthermore,
significant a significance
technology within thethreshold
respectiveofsectors.
2% (redThis
dashed line) fornot
approach keyword percentages
only highlights the
was set
mostThis to focus on
literature
influential the most impactful
review systematically
technologies terms
but also guides within
explores each category.
digitalization
future research Keywords
in power
directions surpassing
distribution
and practical im-
this
gridsthreshold
across three
plementations were further sections:
primary
by correlating analyzed in the
grid
our findings context
planning,
with of theoperations,
grid
documented existing literature
and energy
advancements to evaluate
and market
applica-
their prominence
implications.
tions in the power and applications,
Each section as
is subdivided
distribution detailed in the references. Table 1 collates
domain. based on an extensive review of the literature specific
and
references from this
industry insights, research, offering
highlighting a detailed
areas like exploration
grid expansion andofintegration
the role ofchallenges.
each significantThis
technology within theapproach
structured analytical respectivedissects
sectors.digital
This approach not only
technologies’ highlights
impacts acrossthe most
these influ-
pivotal
ential technologies but also guides future research directions and practical
areas and also aims to provide a detailed exploration of how digitalization reshapes each implementations
by correlating
aspect of power our findings with
distribution documented
systems. advancements
As we progress into theand applications
body in thewe
of the review, power
will
distribution domain.
link these technologies to their real-world applications, providing a comprehensive un-
This literature
derstanding review
of digital systematically
advancements explores power
in distribution digitalization
systems.in power distribution
grids across three primary sections: grid planning, grid operations, and energy market
implications. EachKey
Table 1. Significant section is subdivided
Digital Technologiesbased on an
Exceeding extensive
a 2% review ofin
Impact Threshold thetheliterature and
Power Distri-
industry insights, highlighting areas like grid expansion and integration challenges. This
bution Literature.
structured analytical approach dissects digital technologies’ impacts across these pivotal
References
Keywords
Operation/Planning Market
Artificial Intelligence [1,4,5,8,13–20] [21,22]
Automation [2,23–34] [35,36]
Big Data [4,5,26,37,38] [39]
Appl. Sci. 2024, 14, 4528 5 of 33

areas and also aims to provide a detailed exploration of how digitalization reshapes each
aspect of power distribution systems. As we progress into the body of the review, we
will link these technologies to their real-world applications, providing a comprehensive
understanding of digital advancements in distribution power systems.

Table 1. Significant Key Digital Technologies Exceeding a 2% Impact Threshold in the Power
Distribution Literature.

References
Keywords
Operation/Planning Market
Artificial Intelligence [1,4,5,8,13–20] [21,22]
Automation [2,23–34] [35,36]
Big Data [4,5,26,37,38] [39]
Blockchain [4,6] [21,22,35,40]
Cloud Computing [41] [42]
Clustering [9,13,30,43–49] -
Deep Learning [13,15,17,46,48,50–52] -
Demand Response [53–64] [21,42,65–74]
Forecasting [1,13–16,26,37,46–48,50–52,75–82] [70,83]
Game Theory [63] -
Genetic Algorithm [84–86] -
Internet of Things [4,19,87–90] [22,42,70]
Linear Programming [49,62,91–95] [96]
Machine Learning [2,13,15,16,18,26,51,52,77,81,97,98] [21,22]
Neural
Appl. Sci. 2024, Network
14, 4528 [13–15,46,76–78] - 6 of 35
Optimization [1,6,41,47,53,58,60,62,63,77–79,85,91,94,99–126] [21,68,96,127–131]
P2P - [40,132,133]
P2PSmart Grid -
[1,4,10,12,24–26,29,33,34,57,60,90,98,134–141] [40,132,133]
[21,73,142,143]
Smart Grid [1,4,10,12,24–26,29,33,34,57,60,90,98,134–141] [21,73,142,143]
Software [2,16,26,27,58,59,87,94,144–146] [42,83,127,147]
Software [2,16,26,27,58,59,87,94,144–146] [42,83,127,147]
Virtual Power Plant - [35,96,127]
Virtual Power Plant - [35,96,127]

2.
2. Grid
Grid Planning
Planning
The
Theplanning
planningsection
sectionexamines
examinesdigitalization’s
digitalization’simpact
impact onon
power
power gridgrid
planning, empha-
planning, em-
sizing the integration
phasizing of AI,ofIoT,
the integration AI,and
IoT,big
anddata
biganalytics. It highlights
data analytics. how these
It highlights how technologies
these tech-
transform traditionaltraditional
nologies transform planning, planning,
focusing on enhanced
focusing on load forecasting
enhanced accuracy, optimized
load forecasting accuracy,
network design, and improved reliability and efficiency. Figure 4 illustrates
optimized network design, and improved reliability and efficiency. Figure 4 illustrates the the planning
section’s
planningstructure
section’s and its interconnected
structure themes and
and its interconnected main points.
themes and main points.

Figure 4.
Figure 4. Framework
Framework of
of the
the grid
grid planning
planning subsections
subsections and
and key
key points.
points.

2.1. Load and Generation Forecasting in Planning

2.1.1. Load Forecasting
Digital technologies have revolutionized load forecasting (LF) in power system plan-
ning by integrating renewable sources and evolving consumption patterns. AI and ML
innovations have enhanced LF accuracy, as evidenced by the lower error metrics and set-
Appl. Sci. 2024, 14, 4528 6 of 33

2.1. Load and Generation Forecasting in Planning

2.1.1. Load Forecasting
Digital technologies have revolutionized load forecasting (LF) in power system plan-
ning by integrating renewable sources and evolving consumption patterns. AI and ML
innovations have enhanced LF accuracy, as evidenced by the lower error metrics and
setting new precision benchmarks [75]. Hybrid applications of AI and deep learning
(DL) can improve power distribution forecasting, demonstrating the potential of diverse
computational techniques for better reliability and efficiency [50]. This statement high-
lights the challenges of integrating advanced forecasting technologies into existing power
grids and managing the large volumes of data they produce. It emphasizes the need for
a balance between embracing innovation and ensuring practical, reliable grid operation.
This balance is crucial to maintain efficiency and effectiveness in power distribution as
we adopt new technologies [76]. Future research should focus on refining LF techniques
for dynamic power systems to enhance renewable integration and address energy policy
implications [13].

2.1.2. Generation Forecasting: Enhancing Predictive Accuracy Generation

Forecasting, particularly for renewable sources like solar and wind, employs advanced
modeling techniques to predict energy output. Techniques such as physics-constrained
long short-term memory (LSTM) models leverage domain knowledge and historical data
to forecast photovoltaic power generation with greater precision [14]. Hybrid models that
combine statistical approaches with machine learning, like combining wavelet transforms
with support vector machines, further refine forecasting accuracy, especially when handling
the variability and intermittency of renewable sources [51,77,78]. The integration of real-
time data and continuous model refinement are critical for optimizing the performance of
these forecasting systems [79].

2.1.3. Comprehensive Approaches to Forecasting

Clustering-based techniques streamline load forecasting by grouping similar load pat-
terns, which aids in managing the variability from different energy sources and consumer
behaviors. Techniques like K-means, hierarchical clustering, combined locally linear em-
bedding (LLE), principal component analysis (PCA), and multi-layer perceptrons (MLPs),
enhance accuracy, integrate renewable energy sources (RESs), aid demand-side manage-
ment (DSM), and bolster SG functions [15,43–46,80]. Time series load forecasting (TSLF)
methods utilize historical data, enhanced by advanced algorithms such as ARIMA and
neural networks, to predict future demand. These techniques are pivotal for incorporating
renewable energy sources effectively within the grid, supporting demand-side management
and facilitating SG functionalities [47,48,52,81].
By advancing both load and generation forecasting techniques, the energy sector can
achieve higher efficiency and sustainability, ensuring a reliable and balanced power system
capable of supporting diverse energy landscapes.

2.2. Network Design and Expansion Planning

Network design and expansion planning utilizes advanced models and algorithms to
adapt the electrical grid for future demands and integrate new technologies. Strategies such
as mixed-integer linear programming (MILP), decentralized optimization, and geographic
information system (GIS)-based methods are essential for efficient planning.
Enhancements in network reliability and the integration of renewable energy sources
(RESs) utilize MILP and GIS to optimize substation configurations and infrastruc-
ture [99,100]. The challenges of integrating EVs are addressed using a mixed-integer
non-linear programming (MINLP) model, which efficiently manages increasing EV de-
mands [91].
Multistage expansion planning incorporates reliability constraints within an MILP
framework to balance cost and reliability [92]. The optimization of energy storage sys-
Appl. Sci. 2024, 14, 4528 7 of 33

tems (ESS) in network expansions focuses on performance and cost minimization [148].
Decentralized stochastic planning merges with cost-efficient strategies for integrating dis-
tributed generation (DG) and ESS, employing advanced methods like second-order cone
programming (SOCP) and semidefinite programming (SDP) [53].
Network expansion strategies for demand response (DR) and renewable DG inte-
gration use analytical methods to ensure cost effectiveness [101,144]. Urban network
optimization, including feeder routes and substation placements, employs programming,
GIS, and particle swarm optimization (PSO) to reduce costs and losses [102,149].

2.3. Reliability and Resilience Planning

Reliability and resilience are central to network design and expansion planning, aiming
for steady performance and quick recovery from disruptions under normal conditions and
natural disasters. Modern planning employs GIS, MILP, Monte Carlo simulations, and ML
for a resilient infrastructure. SG integration, predictive maintenance, smart technology, and
cybersecurity can enhance reliability and resilience. Reference [150] illustrates how to use
these technologies to maintain stability and facilitate recovery.

2.3.1. Role of SGs to Enhance Reliability and Resilience

SGs are pivotal in enhancing power distribution and enabling resilient microgrid
development. The optimization of active distribution networks (ADNs) [103] significantly
boosts grid reliability and resilience, highlighting the efficiency and cost effectiveness
of DERs and adaptive load management. Strategies for optimizing DERs and power
lines [104] aim to reduce the costs associated with power interruptions, contributing to
stronger microgrid resilience. Additionally, integrating resilience estimation and cost–
benefit analysis into microgrid planning [151] showcases the role of SGs in optimizing
economic and operational performance in electricity distribution.

2.3.2. Role of Improving Predictive Maintenance to Enhance Reliability and Resilience

Integrating AI, ML, and GIS into predictive maintenance significantly enhances the
reliability and resilience of power systems. For resilience against natural disasters, models
that assess vulnerability rates aid in planning and reconfiguring networks [152]. Advances
in fault detection come from hybrid AI models that combine convolutional neural networks
(CNNs) and RNNs, offering quicker and more accurate diagnostics in active distribu-
tion networks (ADNs) [16]. Deep reinforcement learning (DRL) is employed to fine-tune
resilience strategies, such as upgrading infrastructure to withstand hurricanes [153]. Ad-
ditionally, tackling the impacts of heatwaves involves logistic regression and reliability
models aimed at strategic network renovations, which is exemplified by Milan’s grid [154].

2.3.3. Role of Smart Networks to Enhance Reliability and Resilience

Advanced control technologies in smart distribution networks significantly shorten
outage times and improve grid resilience, enabling quick responses to disruptions. This au-
tomation ensures reliable power distribution and reduces the impact of interruptions. Smart
distribution systems (SDSs) enhance grid reliability and resilience, leveraging technologies
like smart meters and remote-controlled switches for sophisticated outage management
and fault location, isolation, and service restoration (FLISR) techniques [23].

2.3.4. Cybersecurity Strategies for Enhancing Power System Resilience

Cybersecurity is crucial for digitalized power systems, especially as smart technology
and distributed energy resources (DERs) increase system vulnerability. Comprehensive
measures including technological solutions, strategic planning, and regulatory compliance
are necessary to mitigate these risks [155]. Strategies to combat false data injection (FDI)
attacks and the application of AI and ML enhance anomaly detection and system optimiza-
tion [17,134]. The holistic resilience cycle (HRC) promotes an integrated approach to cyber-
physical security, spanning prevention to recovery to comprehensively strengthen grid
Appl. Sci. 2024, 14, 4528 8 of 33

defenses [156]. Securing information and communication technology (ICT) components

like SCADA systems and DERs is vital and requires rigorous vulnerability assessments
and adherence to standards, such as those from the National Institute of Standards and
Technology (NIST) [157,158]. The challenges of DER integration highlight the need for
sophisticated modeling and risk assessment tools for effective defense strategies [54].

2.4. Regulatory and Compliance Planning

Digital technologies significantly influence grid operations; they align with regula-
tory, safety, and environmental guidelines while improving efficiency and supporting
sustainable management. The mixed-integer bilevel linear program (MIBLP) model [159]
addresses distribution system planning within regulatory constraints, highlighting the
impact of regulatory policies on utility operations and facilitating the adoption of
new technologies.
The integration of DG brings to light the need for revised regulatory frameworks to
accommodate its growth [160,161], with the strategic considerations for regulatory compli-
ance and environmental and safety impacts discussed in [105]. This reveals the intricate
relationship between DG strategies and regulatory standards, which is essential for the
evolving power distribution scene. Further discussions in [55,162] emphasize the necessity
for policies promoting network flexibility to manage DG investments. Digital technologies
stand out for their role in boosting system efficiency and ensuring the adaptability required
to meet ongoing and emerging challenges.

2.5. Economic, Financial, and Asset Management Planning

The economic and financial aspects are pivotal for the sustainable and equitable
progression of grid planning, highlighting the need to balance financial health with fair cost
allocation among stakeholders through cost–benefit analysis and strategic investments.

2.5.1. Economic and Financial Planning

The financial sustainability of grids emphasizes equitable cost sharing, using cost–
benefit approaches and strategic investments. Digital simulations that merge performance
with economic factors [56] utilize tools like sequential Monte Carlo simulation and three-
phase power flow to balance service quality with economic efficiency. A multi-level
planning strategy within clustered microgrids in Ref. [106] focuses on optimizing energy
coordination using advanced optimization and DR for efficient energy transaction man-
agement. The role of decentralized energy storage is explored in [163], which highlights
its importance in enhancing system reliability and cost efficiency, particularly with RES
variability. Additionally, an incentive-based model for smart distribution systems in [164]
employs MILP to manage uncertainties in system demand and distributed generation out-
put, showcasing how digital tools can support economic strategies in power distribution.

2.5.2. Asset Management Planning

In SG power distribution, effective asset management is key to addressing aging
infrastructure, fluctuating load demands, and the integration of renewables. Digitalization
increases complexity, so requires sophisticated management tactics and flexible operational
frameworks [18,165]. Predictive maintenance, enhanced by failure modes and effects analy-
sis (FMEA) and applications like fuzzy logic, improves system reliability by identifying
potential failures and facilitating preventive measures [18,24]. However, the growing com-
plexity of SGs, particularly regarding the intertwined nature of cyber and physical systems,
is challenging for traditional asset management methods. Future strategies will likely
leverage data analytics for improved decision making [166]. Previous research has empha-
sized the importance of real-time data in managing aging assets and integrating renewable
energy sources, underscoring strategies for efficient and reliable power provision [57].
As the sector develops, the role of digitalization in asset management, supported by
FMEA and machine learning enhancements, is vital for maintaining system reliability and
Appl. Sci. 2024, 14, 4528 9 of 33

operational efficiency. Upcoming asset management approaches in power distribution will

increasingly rely on advanced analytics and emerging technologies to meet the sector’s
dynamic requirements.

2.6. Sustainability and Environmental Planning

This section is an in-depth exploration of integrating RESs into grid planning, em-
phasizing a commitment to sustainability and environmental stewardship. It begins by
highlighting the alignment with broader sustainability objectives and compliance with
environmental regulations, showcasing a shift towards cleaner energy and a nuanced
understanding of renewable integration’s effects on grid dynamics.
Various studies [93,167] have focused on incorporating carbon emission trading and
DR in planning, underscoring the importance of environmental considerations in en-
ergy systems.
The narrative deepens when considering [107], which stresses the need for coordina-
tion between district developers and utilities, particularly in sustainable, smart districts.
This study explores the challenges and opportunities in managing energy across multi-
ple scales, emphasizing the role of digital tools in optimizing energy distribution and
handling complexities in urban multi-energy systems. Additionally, Ref. [108] introduces
a multi-criteria optimization strategy that accounts for economic, environmental, and
social factors. This approach highlights the benefits of decentralized generation in reduc-
ing CO2 emissions and increasing self-sufficiency, solidifying the role of sustainability in
energy planning.

2.6.1. Renewable Energy Integration

Integrating renewable energy into power distribution is essential for advancing sus-
tainability and efficiency in grid operations, offering both economic benefits and posing
challenges. A model in [49] illustrates the cost reductions associated with increased DG
penetration, emphasizing economic incentives. Studies [109,110] aim to optimize invest-
ment and operational expenses, minimizing integration challenges through sophisticated
mathematical models.
The necessity of robust modeling to manage the variability of wind and solar power
is underscored in [84] and involves capacity credit assessments of RESs and stochastic
methods for precise planning. Addressing the variability of wind and solar energy requires
advanced stochastic and probabilistic modeling to maintain grid stability and efficiency.
The transition to a renewable-focused energy system faces hurdles like RES inter-
mittency. Solutions like energy storage and demand management become crucial [168],
introducing algorithms for the strategic integration of RESs and battery energy storage
systems (BESSs) based on the genetic algorithm (GA) to enhance grid reliability.
Digitalization plays a vital role in renewable integration, with studies highlighting
AI’s and big data’s impact on optimizing grid planning and operations [19], modernization
strategies for handling renewable influx [111], and analyses for economic and environmen-
tal sustainability [169].
Renewable integration, alongside predictive maintenance and analytics, prepares
distribution systems for the changing energy landscape. Despite initial investment and
intermittency challenges, the benefits include sustainability, a reduced environmental
footprint, and potential cost savings, highlighting the need for strategic planning and
digital technology deployment for a resilient and sustainable power system.

2.6.2. Battery Energy Storage Planning

BESSs are key to transitioning towards sustainable power systems, enhancing renew-
able energy use, and reducing CO2 emissions. They address the intermittent nature of solar
and wind power, ensuring a reliable energy supply, and are positioned as a cornerstone of
the green power revolution.
Appl. Sci. 2024, 14, 4528 10 of 33

Study [112] highlights the role of BESSs in mitigating renewable energy intermittency
and demand unpredictability, improving network performance and voltage regulation
and minimizing power losses. This positions BESSs as strategic solutions for managing
renewable energy variations, having benefits for both the economic and environmental
aspects of power systems.
The research in [113] introduces a two-stage optimization for integrating RESs and
BESSs within distribution networks, aiming to reduce investment costs and improve voltage
profiles and demonstrating the importance of coordinated planning and digital tools.
Further discussions in [170] explore BESSs’ contributions to generation capacity ex-
pansion and decarbonization, while [94] presents a planning method for a distributed BESS
that addresses uncertainties in load forecasts and renewable outputs, enhancing power
system efficiency. Additionally, Ref. [171] examines BESSs’ role in grid stability in the global
south and [114] investigates the simultaneous optimization of DG and BESSs for balanced
reliability, cost efficiency, and sustainability in network planning.
BESS integration marks a significant step in enhancing power system sustainability and
efficiency, stabilizing the grid, and optimizing network performance. Strategic planning and
advanced optimization make BESS investments more effective, significantly aiding voltage
regulation and decarbonization efforts. Despite initial cost and regulatory challenges,
BESSs are vital for a resilient and sustainable energy future.

2.6.3. Electric Vehicle Planning

EVs are pivotal in steering modern power distribution systems towards reduced
carbon emissions, supporting global sustainability initiatives. Their integration, particularly
through vehicle-to-grid (V2G) systems, enhances grid technologies, bolstering stability but
also introducing new challenges due to their increasing prevalence.
Optimizing the placement of EV charging stations is crucial, with study [114] employ-
ing PSO to determine the optimal locations, leading to decreased power losses and better
voltage profiles and highlighting the significant influence of infrastructure placement on
grid efficiency.
The advancements in optimization techniques for dynamic EV charging demand
prediction and voltage stability are explored in [85,115,116], showcasing the sophistication
of current methods in managing demand, ensuring system stability, and maintaining cost
efficiency and emphasizing digital technologies’ importance in EV infrastructure planning.
Further discussions in [86,117,172] delve into optimal operational planning and the
broader impacts of EV integration on distribution systems, providing comprehensive
insights into EV infrastructure development and operational strategies.
This narrative underscores EVs’ critical role in transforming power distribution, spot-
lighting advanced planning and digital innovations in enhancing EV infrastructure’s effi-
ciency and sustainability. It presents a thorough synthesis of research on EV integration,
from optimizing infrastructure to addressing grid stability and cost challenges, indicating
the need for sophisticated forecasting models and regulatory adjustments to support EV
integration’s expanding demands.

2.6.4. Energy Community Planning

The transition to sustainable, localized energy generation and consumption is in-
creasingly powered by grassroots energy communities, blending democratic participation
with renewable energy efforts, which is significantly aided by digital platforms for energy
sharing and management.
The research in [173] explores smart energy community development, spotlighting
the role of smart technologies like blockchain in optimizing community-based energy
systems. Another study [135], discusses the planning of a sustainable district in Sweden
and examines diverse stakeholder views on citizen energy communities (CECs) in decen-
tralized energy solutions through a sociotechnical perspective, highlighting the potential
for decentralized energy models.
Appl. Sci. 2024, 14, 4528 11 of 33

The critical function of ICT in supporting energy communities is the focus of [174],
which illustrates how digital tools aid energy management and market participation,
emphasizing ICT’s role in facilitating a sustainable and decentralized energy transition.
Additionally, Ref. [175] presents a digital platform with a one-stop-shop (OSS) ar-
chitecture aimed at enhancing community energy projects by simplifying stakeholder
interactions and project management, further advancing the energy transition agenda.
Together, these discussions spotlight the shift towards community-driven, decen-
tralized energy systems, stressing the merger of digital and renewable technologies for
improved energy management and distribution. Future directions will involve enhanc-
ing digital sharing platforms and community engagement strategies, navigating regu-
latory landscapes to support the global shift towards more sustainable decentralized
energy systems.

2.7. SG Integration in Planning

The transition to smarter power systems is driven by advancements in digital tech-
nologies, reshaping the planning of distribution systems. Key research highlights the use
of AI and ML, including artificial neural networks (ANNs), to enhance tasks like volt-
age monitoring, generation output forecasting, and grid failure mitigation across various
operational domains [25].

2.7.1. Economic Impact in SG Implementation

SG technology demonstrates economic benefits through DSM, energy efficiency, and
DG integration. For example, in Oman, SGs have reduced the peak energy demand,
showcasing the value of SG maturity models in strategic planning [136]. Additionally, they
provide innovative solutions for forecasting and enhancing operational reliability, which
has significantly improved the economic performance and system reliability in Boao Town,
Hainan [26].

2.7.2. Technoeconomic Analysis in SGs

Technoeconomic analysis in SG planning balances technical feasibility with economic
viability, optimizing grid and storage expansion investments to reduce costs, especially in
medium- and low-voltage grids [58].

2.7.3. Smart Network Impact and Planning Approaches in SGs

As smart distribution networks evolve, novel planning models are required to accom-
modate bi-directional flows and interconnected operations. Various reviews have highlight
a shift towards integrated multi-objective optimization models in SG planning [118,137].
The integration of EVs and new technologies necessitates sustainable operational strategies
that harmonize renewable integration with grid reliability, with technologies like digital
twins and agent-based simulation playing pivotal roles [138].
Furthermore, the integration of DERs into grid planning is aimed at optimizing opera-
tions and utilizing network capacity efficiently, impacting service reliability [139]. Overall,
SG development focuses on challenges and opportunities including interoperability, net-
work communications, and renewable energy integration, which is crucial for achieving
efficiency and environmental sustainability while managing cybersecurity challenges in
DR and grid operations.

3. Grid Operations
The operation of modern distribution grids, crucial for reliable and efficient electricity
delivery, has evolved with the integration of decentralized sources and RESs, transforming
them into dynamic networks. Key to this transformation are digital tools like smart
sensors, the IoT, AI, and big data analytics, which enable real-time monitoring, predictive
maintenance, and improved decision making. These technologies enhance grid reliability,
efficiency, and cybersecurity while facilitating renewable integration and boosting customer
 The operation of modern distribution grids, crucial for reliable and efficient electric-
ity delivery, has evolved with the integration of decentralized sources and RESs, trans-
forming them into dynamic networks. Key to this transformation are digital tools like
smart sensors, the IoT, AI, and big data analytics, which enable real-time monitoring, pre-
Appl. Sci. 2024, 14, 4528 dictive maintenance, and improved decision making. These technologies enhance grid 12 ofre-
33
liability, efficiency, and cybersecurity while facilitating renewable integration and boost-
ing customer engagement. Thus, digital tools are vital for achieving a resilient, sustaina-
engagement. Thus, digital tools
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Figure 5. Framework
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points.

3.1. Grid Monitoring and Control in Operation

Effective grid monitoring and control are crucial for the operational efficiency of
modern distribution grids. Utilizing advanced digital tools like smart sensors, the IoT, and
real-time data analytics enables grid operators to achieve precise control and real-time
oversight. This integration ensures a reliable electricity supply, an optimal response to
fluctuating demand, efficient resource management, the maintaining of grid stability, and
addressing challenges in the evolving energy landscape.

3.1.1. Real-Time Monitoring and Digital Platform Monitoring

Real-Time Monitoring
Modern distribution systems enhance operational efficiency through effective real-
time grid monitoring by utilizing digital technologies. One method uses low-voltage
measurements for medium-voltage waveform analysis to improve monitoring accuracy
and enhance fault detection and grid stability in the presence of DERs [176].
Further innovations include the development of AC/DC switching technology and
digital platforms that integrate intelligent power equipment into the power IoT ecosystem,
enhancing features like real-time temperature detection [87]. The IoT’s versatility extends
to systems aimed at preventing food spoilage through real-time anomaly detection [88]
and web-based tools for accessible power quality monitoring [177].
Edge computing is also employed to boost grid operation efficiency and reliabil-
ity [145], whereas continuous power quality monitoring in ADNs emphasizes quick fault
detection [178].
These advancements underscore the importance of real-time monitoring in improv-
ing smart grids’ reliability and security, addressing challenges like data complexity and
cybersecurity and fostering a more efficient energy landscape.

Advanced Digital Monitoring in Power Distribution: SCADA and IDMS Platforms

Advanced digital monitoring technologies like SCADA (supervisory control and data
acquisition) and integrated distribution management systems (IDMSs) are crucial for the
evolution of power distribution systems, driving improvements in grid efficiency and
reliability. SCADA systems facilitate real-time data collection, remote control, and network
communications, which are essential for the operation of modern grids.
The SCADA-based approach reported in [179] enhances real-time voltage stability
monitoring, streamlining grids for better renewable energy integration. Studies on the
health of SCADA infrastructure in power transmission [146,180] utilize SNMP for proactive
management and early fault detection.
IDMSs, which integrate outage management and smart meter data, modernize grid
management systems. A case study involving Unareti, the DSO for Milano and Brescia,
Appl. Sci. 2024, 14, 4528 13 of 33

showcases the retrofitting of substation monitoring with middleware to improve sensor

integration, highlighting challenges such as data exchange latency.
These advancements emphasize the vital impact of SCADA and IDMSs on mod-
ern grid management, addressing operational efficiencies and the challenges of integrat-
ing new technologies and marking significant steps towards a resilient and sustainable
power infrastructure.

3.1.2. Grid Control

With the increasing integration of DERs and digital advancements, grid control is
becoming more crucial in power distribution networks. The concept of grid-edge con-
trol is reported upon in [181], it proposes integrating traditional grid systems with the
autonomous control of DERs to effectively address integration challenges.
This approach encompasses various control architectures and operational layers,
including hierarchical coordinated control strategies for PV inverters, as detailed in [119].
Such multi-layer mechanisms enhance voltage quality and reactive power management,
illustrating the importance of SGs and digital tools like smart meters and vehicle-to-grid
systems in grid control and operation and improving data acquisition and connectivity.
Furthermore, Ref. [119] stresses the role of digital metering, communication technologies,
and cloud computing in real-time grid monitoring and management. An optimized power
control strategy for grid-connected PV inverters is introduced in [120], showcasing efficient
inverter design, while [182] explores real-time electrical energy monitoring in distribution
networks using modern metering devices and automated controls.
These discussions highlight the critical role of advanced control strategies and digital
technologies in enhancing grid efficiency, reliability, and renewable integration, propelling
power distribution towards more sophisticated, reliable, and efficient solutions.

3.2. DR and Load Management in Operation

In the modern power system landscape, DR and load management are pivotal in
making electricity consumption more adaptive and efficient. DR dynamically adjusts elec-
tricity use in response to grid conditions and pricing, helping balance supply and demand,
enhancing grid reliability, and offering potential economic benefits. Load management, on
the other hand, optimizes energy use for system stability and efficiency, which is crucial for
managing peak demands and renewable energy integration. Together, these strategies are
vital for achieving a sustainable, resilient energy framework.

3.2.1. Demand Response

DR strategies, enhanced by digital advancements, are increasingly recognized for their
ability to improve grid efficiency, manage peak loads, and reduce carbon emissions. Smart
meters and specialized software are crucial for addressing challenges such as reverse power
flow from distributed generators, which was highlighted by a successful DR initiative by
an Italian DSO [59,60].
The review in [59] evaluates residential DR as a cost-effective alternative to traditional
network upgrades, discussing activation strategies, challenges, and the future potential
of residential demand responsiveness. Another study [61], examines the impact of bidi-
rectional digital communication on DR management (DRM) programs, aiming to reduce
operational costs and emissions through optimized DR programs.
Further research, reported in [62], introduces risk-based planning tools to address
uncertainties brought by new technologies like DERs, using a robust linear programming
model for a DR that showcases the potential economic benefits. Additionally, a game
theoretic model [63] explores competition among demand response aggregators (DRAs) to
stabilize the grid amidst renewable energy fluctuations.
Despite the benefits of DRs, challenges such as consumer hesitancy and the need
for enhanced stakeholder collaboration persist. Future research will focus on evaluat-
ing the sector-specific efficacy of DR and the impact of advanced communication on
Appl. Sci. 2024, 14, 4528 14 of 33

market efficiency, particularly in developing countries. This underscores the need for
strategic engagement, technical advancements, and pricing strategies to make DR econom-
ically viable, highlighting the critical role of digital tools in enhancing grid performance
and sustainability.

3.2.2. Load Management

The evolution of digital tools has significantly enhanced load management in distribu-
tion power systems, as evidenced by recent studies. A power distribution network man-
agement system (DNMS), leveraging the Spring Boot + SSM framework and LSTM-based
load forecasting with big data technology, offers comprehensive power system analysis for
improved control and risk management, excelling in urban distribution complexities [37].
A cloud-based intelligent power management system is explored in [41] that utilizes
analytics for balancing control signals and integrating demand power management with re-
newable energy, resulting in decreased consumption and costs through cloud optimization.
A toolbox designed for incorporating RESs into distribution networks [121] employs
heuristic optimization to simulate energy storage and optimize power output, boosting
operational efficiency. Additionally, a load power and energy management system [27]
utilizes Proteus Visual Design software and Arduino Mega 2560 for advanced metering
and load control that is suitable for various applications.
These studies highlight the transformative impact of digital advancements on power
distribution load management, emphasizing the importance of innovative tools in system
management, control, and optimization, particularly with renewable integration.

3.2.3. Customer Participation in DR and Its Operational Challenges

Customer participation in DR contributes to grid stability, especially with the increas-
ing integration of RESs. It offers a two-fold benefit: helping to balance the electricity supply
and demand and providing economic incentives to consumers. The effectiveness of these
tools in promoting customer participation in DR is evident in their ability to manage reverse
power flow, as shown in the real-life DR campaign discussed in [59].
Challenges in customer DR participation include engagement and awareness is-
sues [60], technological integration complexities, unpredictability of response [63], data
security concerns, and ensuring equitable access. Overcoming these necessitates collabo-
ration among utilities, policymakers, and technology providers, with the development of
risk-based tools [62] and innovative engagement strategies being crucial. Addressing these
challenges is essential for leveraging DR’s full potential for a sustainable grid.

3.3. Renewable Energy Integration in Operation

As power systems globally transition towards RESs, the role of digital technologies is
becoming increasingly vital in addressing the operational complexities this shift entails.
This section explores the challenges and solutions related to the high penetration of re-
newables, emphasizing how digital tools and advanced technologies are key to effective
integration and management.

3.3.1. Operational Challenges Posed by High Penetration of Renewables

The integration of renewables, as discussed in [122], introduces challenges such as
variability, low inertia, and power quality issues, whereas the solutions involve various
technologies and strategies, including advanced control systems, optimization techniques,
and energy storage solutions. Digital technologies, particularly advanced data analytics
and predictive modeling, play a crucial role in forecasting and managing the variable
nature of RESs. Additionally, Ref. [183] highlights the need for sophisticated climate
modeling tools to anticipate and mitigate the effects of climatic variability on renewable
production. Methodologies from the reviewed studies include statistical analyses, power
spectrum density plots, and correlation assessments of climate variables and renewable
energy production.
Appl. Sci. 2024, 14, 4528 15 of 33

3.3.2. Management of Grid Stability and Power Quality with Intermittent

Renewable Sources
Addressing grid stability and power quality amidst fluctuating renewable energy
sources is critical. Study [184] illustrates the utility of ISS-theory-based digital simulation
tools for evaluating grid stability across diverse renewable penetration rates. The case study
in [28] demonstrates how digital control systems in energy storage that offer synthetic
inertia and fault current support can fortify grid stability in renewable-dense networks.
Additionally, Ref. [123] showcases the integration of advanced computational methods
with digital simulation tools and adaptive rat-swarm optimization (ARSO) for optimiz-
ing static VAR compensators (SVC) and power system stabilizers (PSSs). This synergy
between traditional digital tools and innovative optimization strategies is vital for ensuring
a stable, high-quality power supply in renewable-rich grids, paving the way for a resilient
energy future.

3.3.3. Advanced Control Systems for Managing Renewable Sources

Study [185] emphasizes the necessity for dynamic, adaptive control systems for the
renewable energy shift, presenting a complex dynamic optimization model as a multi-stage
decision framework. This model integrates solar energy and storage capacities, fossil fuel
use, and electricity consumption, aiming to maximize utility within carbon budget and
technological constraints. It addresses solar variability with probabilistic functions and
analyzes the impact of cloud coverage on solar generation, offering insights into optimizing
solar energy systems amidst environmental fluctuations.

3.4. Outage Management and Reliability in Operation

In the evolving landscape of power distribution systems, the integration of specific
digital tools such as smart meters, remote sensors, advanced data analytics, and automated
control systems is playing a pivotal role in enhancing operational efficiency and reliability.
This section delves into the recent advancements in outage management and reliability,
focusing on strategies for the quick detection and restoration of power outages and the
application of automated switchgear and reclosers. The referenced studies illustrate the
transformative impact of these specific digital technologies in optimizing power distribution
system operations.

3.4.1. Strategies for Quick Detection and Restoration of Power Outages

The shift in power distribution system operations increasingly focuses on rapid outage
detection and restoration by leveraging data-driven technologies. Smart meters and remote
fault indicators are pivotal for precise fault localization [95], utilizing digital tools for real-
time data analysis. Distribution automation plays a key role in service restoration [29],
which is crucial for quick network re-energization.
Studies [186,187] highlight the importance of fault diagnosis and prognosis through
data analytics, offering methods for pinpointing faults in networks with DGs. Further
research in [30,188] discusses advanced data analytics for fault diagnosis and a digital
approach for locating faults in DG-integrated networks, respectively. Together, these
studies underline the transformative impact of data-driven practices and automation in
improving outage detection and recovery in power distribution systems.

3.4.2. Automated Switchgear and Reclosers for Improving Outage Response

The deployment of automated switchgear and reclosers plays a crucial role in enhanc-
ing outage management within distribution networks. The research in [31] underscores a
digital strategy utilizing coordinated recloser–fusesaver systems, notably improving outage
management by minimizing the frequency, duration, and customer impact of outages.
Further analysis in [32] explores a model assessing the impact of automated fault
location, isolation, and service restoration on system resilience, particularly under disaster
conditions, leveraging digital simulations for performance metrics. Study [124] investigates
Appl. Sci. 2024, 14, 4528 16 of 33

the strategic allocation of protective devices, including digital reclosers, adopting an MILP
methodology to boost reliability in networks with DGs.
Additionally, Ref. [189] highlights the importance of strategically placing auto-reclosers
to improve system reliability and efficiency, which is especially pertinent in network re-
modeling, using network modeling and simulation for optimal placement decisions.
Together, these studies illustrate the significant benefits of incorporating automated
switchgear and reclosers in power distribution networks, underscoring a shift towards
more resilient and efficient outage management.

3.5. Asset Management and Maintenance in Operation

The rapid digital evolution in power distribution necessitates integrating digital tools
for asset management and maintenance, addressing system complexity and demands for
efficiency, reliability, and sustainability. This section examines digitalization’s crucial role
in transforming asset management strategies, focusing on predictive maintenance, AI-
driven asset health monitoring, and strategic maintenance planning to reduce disruptions.
Highlighting research and practical examples, it shows the impact of digital methodologies
on power system management, from ML to advanced sensors, demonstrating how digital
innovations are tackling current challenges and future demands.

3.5.1. Predictive Maintenance Strategies for Grid Infrastructure

The advancement of predictive maintenance in power grid infrastructure utilizes
advanced data analytics, sensor technologies, and ML to pre-empt potential failures and
refine maintenance schedules. Study [190] explores statistical, ML, and AI methods for
time series data analysis, highlighting their effectiveness in pre-emptive maintenance
strategies to boost grid performance and cost efficiency. Simultaneously, Ref. [97] examines
advanced sensor technologies for monitoring switchgear, focusing on thermal, mechanical,
and discharge detections integrated with ML for accurate maintenance predictions.
Additionally, Ref. [98] tackles the challenges posed by DERs and rapid power electron-
ics, promoting real-time predictive maintenance and failure prediction using cyber physical
systems (CPSs) and digital twin models, which is essential for modern power distribution
complexities. Study [191] addresses the surge in EV charging demand, suggesting a deep
reinforcement learning approach for timely distribution transformer replacements to meet
operational demands and maintain grid reliability amid changing energy landscapes.
These discussions underline the pivotal role of predictive maintenance, driven by
digital innovations, in ensuring grid reliability and efficiency.

3.5.2. Analytics and AI in Asset Health Monitoring

The study in [89] underlines the significance of utilizing low-cost, non-intrusive sen-
sors combined with AI for asset health monitoring. These technologies provide continuous
monitoring and real-time analysis that is essential for predictive maintenance. The integra-
tion of AI algorithms can process large datasets from sensors, facilitating early detection
and proactive maintenance strategies. This approach not only ensures system reliabil-
ity but also significantly reduces maintenance costs by avoiding unplanned outages and
expensive repairs.

3.5.3. Planning of Maintenance Schedules to Minimize Operational Disruptions

In the study in [192], the importance of SG infrastructure and online monitoring de-
vices in maintenance planning is emphasized. These tools provide crucial real-time insights
for optimizing maintenance schedules. The review suggests that the integration of predic-
tive analytics and advanced optimization algorithms enables utilities to make informed
decisions, thereby effectively managing assets and optimizing maintenance activities.
Ref. [193] discusses the use of comprehensive digital tools, including remote moni-
toring systems, analytical software, and predictive algorithms. These tools enhance the
effectiveness of asset management plans, enabling the efficient tracking and monitoring
Appl. Sci. 2024, 14, 4528 17 of 33

of assets. The paper highlights how real-time automation technologies and big data pro-
cessing with predictive and prescriptive analytics play crucial roles in the decision-making
processes related to asset operation and maintenance.

3.6. Voltage and Reactive Power Control in Operation

In modern power distribution systems, managing voltage and reactive power is es-
sential for system stability, efficiency, and economic operations. Digital tools for voltage
and reactive power control are at the forefront of enhancing these aspects. A comprehen-
sive review in [20] discusses various control algorithms, including evolutionary, physical,
and swarm algorithms, and highlights the significance of intelligent data analysis and
sophisticated optimization tools in the renewable energy era.

3.6.1. Methods for Maintaining Optimal Voltage Levels in the Grid

For maintaining optimal voltage levels, Ref. [125] explores the integration of on-load
tap changers (OLTC), voltage regulators (VR), capacitor banks (CB), and DGs through a
mixed integer second-order cone programming (MISOCP) model with model predictive
control (MPC). This method aims to minimize operational losses and sustain optimal volt-
age, utilizing linear programming and machine learning for better stability and response.
Furthermore, Ref. [194] details a centralized control strategy for ADNs that merges
proportional integral and corrective control via MPC. This strategy benefits from real-time
data and forecasts to enhance system adjustments, demonstrating MPC’s role in digital
grid management to address voltage and quality issues proactively, thus ensuring stability
and efficiency.

3.6.2. Management of Reactive Power to Improve Efficiency and Reduce Losses

Managing reactive power is crucial for operational efficiency in power systems.
Study [195] introduces a coordinated volt-var controller (VVC) that employs a sensitivity
matrix-based method, enhancing voltage and reactive power management. This approach
leverages digital tools for sensitivity analysis and control optimization, simplifying complex
calculations and improving decision making. The research emphasizes the ability of digital
solutions to reduce computational complexity in traditional volt-var control, supporting
real-time applications in smart distribution networks.
Additionally, a digital approach to voltage regulation in ADNs using a distributed
control system with predictive analytics to anticipate renewable outputs and load shifts
that enables proactive voltage control has been established. It integrates OLTCs and a
distributed algorithm for coordinating reactive power from DERs by applying the ADMM
optimization method. This underscores digitalization’s critical role in bolstering grid stabil-
ity and efficiency, particularly in systems with high renewable energy penetration [126].

3.6.3. Automated Voltage Control Systems for Efficient Operation

Automated voltage control within low-voltage distribution networks can leverage
advanced digital techniques. It features a control algorithm embedded in a voltage source
converter (VSC) for effective regulation, utilizing both reactive and minimal active power
at the point of common coupling (PCC). This approach addresses traditional inefficiencies,
with a digital signal controller (DSC) underscoring the pivotal role of digital technology in
optimizing power flow and enhancing voltage stability and quality in the complex terrain
of low-voltage networks [196].
The integration of digital strategies, including MPC, volt-var controllers (VVCs),
OLTCs, and DGs, signifies substantial progress in voltage and reactive power management.
These developments indicate a transition from conventional to dynamic, real-time control
mechanisms that is supported by SG technologies. This evolution focuses on maintaining
grid stability and facilitating efficient RES integration.
Appl. Sci. 2024, 14, 4528 18 of 33

3.7. Metering, Billing, and Customer Service in Operation

The integration of digital technologies, especially smart meters, is reshaping metering,
billing, and customer service in distribution power systems, marking a shift towards more
efficient, reliable, and customer-oriented operations. Study [82] underlines the intricate
analysis enabled by smart meter data, from load forecasting to detecting non-technical
losses (NTLs), emphasizing the role of smart meters in enhancing power network opera-
tions. Additionally, Ref. [64] delves into direct load control features within smart meters,
improving demand management and customer engagement through remote connectiv-
ity services.
The research in [197] introduces an IoT-based framework for real-time power quality
measurement, advancing metering technology by providing immediate insights into power
metrics. Study [198] explores advanced metering infrastructures leveraging real-time
data for identifying technical losses and preventing unauthorized energy consumption,
showcasing the vast potential of digital tools for optimizing energy distribution.
Furthermore, Ref. [38] discusses the transformative impact of big data analytics on SGs,
linking operational enhancements in metering and billing to improvements in customer
service. This connection highlights the crucial role of digital innovations in driving more
streamlined, responsive, and sustainable power distribution systems.
The adoption of digital tools across metering, billing, and customer interactions signals
a significant move towards modernizing power grids, enhancing functionality from smart
metering to IoT-based monitoring and big data analytics. These advancements collectively
drive operational excellence and consumer satisfaction. Despite challenges like privacy
and cybersecurity, ongoing research is dedicated to addressing these issues, with the
goal of boosting consumer engagement and refining grid optimization for an automated,
customer-centric energy landscape.

3.8. Cybersecurity and Grid Security in Operation

Modern power grids, especially those transitioning to SG technologies, face significant
cybersecurity challenges. The integration of information and communications technologies,
as highlighted in [140], has transformed electricity distribution networks, necessitating
advanced security mechanisms for reliable operation. Similarly, Ref. [90] emphasizes the
vulnerabilities introduced by digital evolution, particularly the susceptibility to cyberat-
tacks like false data injection and distributed denial of service (DDoS).

3.8.1. Strategies for Protecting Grid Control Systems from Cyber Threats
The importance of a comprehensive approach for safeguarding grid control systems is
apparent, which can be achieved by merging traditional security practices like data encryp-
tion with sophisticated defense-in-depth strategies, as suggested in [140]. Furthermore,
Ref. [33] highlights the effectiveness of lightweight authentication in SGs, aimed at mini-
mizing the computational demands while preserving robust security. The integration of
advanced authentication protocols, the use of hash functions, and symmetric cryptography
are proposed as efficient methods to bolster SG communication security, ensuring high
operational performance without sacrificing security integrity.

3.8.2. Implications of Data Breaches and Security Incidents on Grid Operations

Data breaches and security incidents have severe implications for grid operations. As
noted in [199], cyberattacks can lead to overloaded transformers and equipment damage,
impacting the lifecycle of the equipment and the reliability of the grid. Ref. [34] elab-
orates on this, explaining how cyberattacks can disrupt normal operations and lead to
system blackouts.

3.8.3. Digital Tools and Operation Approaches

Studies have emphasized the critical role of digital tools, including intrusion detection
systems [141] and ML alongside digital twin technologies [200], in enhancing cybersecurity
 3.8.3. Digital Tools and Operation Approaches
Appl. Sci. 2024, 14, 4528 Studies have emphasized the critical role of digital tools, including intrusion 19 detec-
of 33
tion systems [141] and ML alongside digital twin technologies [200], in enhancing cyber-
security for power grids. The integration of advanced ML and AI methods is crucial for
detecting
for powerand mitigating
grids. dynamicofcyber
The integration threats,
advanced MLwhich advocates
and AI methodsfor a blendfor
is crucial of new tech-
detecting
nologies with traditional security measures to ensure the resilience of SG operations
and mitigating dynamic cyber threats, which advocates for a blend of new technologies
against
with evolvingsecurity
traditional cyber risks.
measures to ensure the resilience of SG operations against evolving
cyber risks.
4. Energy Market
4. Energy Marketanalysis section discusses how digitalization is revolutionizing power
The market
distribution markets
The market through
analysis innovative
section technologies
discusses and business
how digitalization models. It highlights
is revolutionizing power
the role of digital
distribution marketstools in enhancing
through market
innovative efficiency, and
technologies transparency, and competitiveness
business models. It highlights
the
androle of digital
considers thetools in enhancing
implications market efficiency,
of integrating renewabletransparency, and competitiveness
energy sources, DR initiatives,
and considers
changes intheregulatory
implications of integrating
frameworks. Therenewable
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and opportunities and
these integra-
changes in regulatory
tions present frameworks.
are explored, underliningThethe
challenges
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for markets these
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the to adapt
subsections andtokey
digital
pointstransforma-
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tion.
6. The section concludes by visualizing the subsections and key points in Figure 6.

Figure 6. Framework of the market subsections and key points.

4.1. Structures and

4.1. Structures and Regulations
Regulations in
in the
the Electricity
Electricity Market
Market
The
The electricity market is rapidly evolving due
electricity market is rapidly evolving due to
to digitalization,
digitalization, which
which affects
affects market
market
structures and regulatory frameworks. This shift necessitates re-evaluation, as technologies
structures and regulatory frameworks. This shift necessitates re-evaluation, as technolo-
like smart grids and the IoT reshape how electricity is managed and consumed.
gies like smart grids and the IoT reshape how electricity is managed and consumed.
4.1.1. Impact of Digitalization on Market Models and Distribution Utilities
4.1.1. Impact of Digitalization on Market Models and Distribution Utilities
Digitalization transforms electricity distribution, integrating renewable sources and
Digitalization
prosumers transforms
and altering electricitydynamics
DSO–consumer distribution,
[142].integrating renewable
The associated sources
challenges and
include
prosumers and altering DSO–consumer dynamics [142]. The associated
resistance to new technologies and uncertainties about the impact of smart meters. Thechallenges in-
clude resistance to new technologies and uncertainties about the impact of smart
study in [39] highlights the necessity for the electric power sector to continually adapt by meters.
The study
using in [39]
digital toolshighlights themarket
to navigate necessity for the
reforms electric
and balancepower sector tointerests.
stakeholder continually adapt
by using digital tools to navigate market reforms and balance stakeholder interests.
4.1.2. Digital Tools and Regulatory Influence
4.1.2.Digital
Digitaltools
Tools and Regulatory
enhance Influenceand consumer relations, with studies like [42]
market operations
Digital analytical
supporting tools enhance market for
approaches operations and consumer
more dynamic markets.relations,
Meanwhile,with studies
Ref. [161] like
dis-
[42] supporting
cusses managinganalytical approaches
DERs’ challenges for more
through dynamic
digital markets. stressing
technologies, Meanwhile, theRef.
need [161]
for
discusses managing
regulatory DERs’
adaptations challenges
to keep pace with through digital technologies,
technological advancementsstressing the need
and support for
integra-
regulatory
tion adaptationsrisks.
while addressing to keep pace with technological advancements and support inte-
Digitalization
gration enhances
while addressing efficiency, sustainability, and customer interaction in the elec-
risks.
tricity market but challenges the existing
Digitalization enhances efficiency, structures and
sustainability, andregulations. A shift towards
customer interaction in the
dynamic,
electricityintegrated
market but management frameworks
challenges the is crucial toand
existing structures handle these complexities
regulations. [201].
A shift towards
This includes
dynamic, adjusting
integrated market models
management and updating
frameworks regulations
is crucial to fully
to handle embrace
these digital
complexities
technologies, addressing
[201]. This includes specific
adjusting issues
market like data
models andprivacy
updatingandregulations
cybersecurity for aembrace
to fully success-
ful transition.

4.2. DR in the Energy Market

DR is increasingly vital in modern power systems as it offers a dynamic approach
to managing electricity demand. Enhanced by digital advancements like AMI and bidi-
rectional communication, DR has seen substantial improvements in its effectiveness. The
Appl. Sci. 2024, 14, 4528 20 of 33

regulatory environment, crucial for DR adoption, varies across regions, with study [65]
analyzing Europe’s scene and identifying obstacles and enablers for DR.

4.2.1. Mechanisms and Technologies in DR

This section examines DR mechanisms, emphasizing the essential role of digital tech-
nologies in SGs. Digital tools enable strategic energy consumption decisions and leverage
optimization methods such as convex optimization, game theory, and dynamic program-
ming to enhance load management. Study [60] highlights the significance of bidirectional
digital communication and distributed energy management systems for sustainability and
cost reduction. Ref. [66] discusses integrating DR within capacity remuneration mech-
anisms, advocating for differentiated payments tailored to DR technologies’ roles and
emphasizing digital tools in DR activation and operation. It critiques traditional mech-
anisms while praising digital solutions for improving market responsiveness and DR’s
economic viability. Furthermore, Ref. [21] explores the integration of AI and ML in DR, dis-
cussing their role in user engagement, price optimization, and device control, and reviews
applications including blockchain to underscore its substantial influence on DR efficiency
and SG management.

4.2.2. Market Integration and Economic Models of DR

The integration of DR into electricity markets involves sophisticated economic models
and digital technologies to optimize operations and incentives. Study [67] introduces
a distributed DR market clearing algorithm using cloud computing for computational
efficiency, showcasing the ability of digital tools to handle market complexities. It also dis-
cusses a data-driven market strategy to coordinate dispatch between virtual power plants
(VPPs) and DR aggregators, utilizing digital data processing to boost market operation
efficiency. This approach employs a two-stage framework with noisy inverse optimization
to accurately estimate customer load response, facilitating economically viable and efficient
DR operations [68]. Additionally, Ref. [21] highlights AI’s role in managing aggregator
clustering problems and optimizing pricing and scheduling via multi-agent systems, which
significantly improves economic and operational performance by predicting market trends.
Future DR strategies may incorporate advanced ML models and game theory to navigate
energy supply and demand challenges, emphasizing the need for addressing data privacy,
system integration, and scalability to adapt to evolving energy and market demands.
This streamlined version focuses on categorizing DR’s impact through digital tools and
economic models, maintaining fluency and cohesion while highlighting the transformative
influence of AI and ML on DR strategies and market integration.

4.3. Distributed Energy Resource Integration in the Energy Market

This introduction sets the stage for understanding DERs, emphasizing their diversity,
as DERs include solar panels, wind turbines, and battery systems. Ref. [127] is crucial
here. It highlights the transformative role of DERs in modern energy systems and not
just their technological diversity. This section underscores the transformative role of
digitalization in enhancing the capabilities of DERs for real-time control and optimization
of energy networks.

4.3.1. Market Dynamics of DERs

Focusing on the market dynamics of DERs, this section delves into the role of VPPs in
aggregating DERs for effective market participation. Ref. [35] is pivotal in illustrating how
blockchain technology facilitates this aggregation and reshapes market structures beyond
energy trading and management. It explores how blockchain can automate and digitalize
the control of DERs. Additionally, Ref. [96] provides a foundational reference for future
VPP optimization strategies.
Appl. Sci. 2024, 14, 4528 21 of 33

4.3.2. The Role of Digital Tools in DER Integration

This section underscores the significance of digital tools, especially blockchain, in inte-
grating DERs into power systems. Ref. [40] showcases blockchain’s potential to enhance the
security, transparency, and efficiency of energy transactions within microgrids, presenting
a decentralized market model and a case study on its advantages for energy management
and community self-sufficiency through battery storage.
Furthermore, Ref. [83] discusses the integration of DERs using the transactive energy
models facilitated by blockchain. This approach addresses the challenges of the intermit-
tency of renewable energy sources and the need for a supply–demand balance. The paper
highlights the importance of intelligent agents in maintaining equilibrium in networks
with high DER penetration, showcasing the essential role of digital technologies in modern
energy management and market integration.

4.3.3. Impact of DER Integration on Energy Markets

This section delves into how the integration of DERs impacts power markets, with
Ref. [69] focusing on the transformation in consumer roles and market dynamics. It
examines the adoption of solar panels, micro-cogeneration units, EVs, and distributed
storage, illustrating how consumers are becoming active energy providers that affect
both the distribution network and wholesale market. The paper also touches on the
cybersecurity and resilience issues related to DER integration, advocating for policy reforms,
comprehensive pricing strategies, and reduced market participation barriers.
Additionally, Ref. [202] highlights the necessity for market-based solutions to foster
DER participation, emphasizing the significance of digital tools in adapting market frame-
works. It addresses the growing inclusion of renewables, consumer empowerment, and the
emergence of new entities like EVs within the market. The discussion extends to the poten-
tial of DERs in delivering flexibility services, challenging the traditional reliance on large
power plants, and the anticipated demand for such services, suggesting the establishment
of local energy markets to facilitate DER integration into the broader electricity markets.
Finally, addressing the challenges of integrating DERs, such as voltage optimiza-
tion and overcoming regulatory obstacles, digital solutions emerge as key facilitators.
Study [128] focuses on employing PV inverters for voltage control and leveraging optimal
power flow tools for enhancing network operations, showcasing effective methods for
integrating PV systems into distribution networks.
Ref. [70] introduces consumer digital twins (CDTs) for refining energy pricing within
local energy markets (LEMs), utilizing the Internet of Things (IoT) to enable flexible DR and
advocating for consumer-centric market models. This strategy enhances market efficiency
by aligning with renewable variability and consumer preferences. Additionally, Ref. [70]
delves into the development of DR, which is propelled by DERs and SG innovations,
examining how digital technologies, including the Internet of Energy and IoT, are shaping
DR strategies and their prospective roles in energy markets.

4.4. Customer Engagement and Retail Markets

Study [71] evaluates Spain’s retail electricity market’s digitalization, identifying gaps
in digital adoption among electricity retailers, particularly in online services and billing,
suggesting the need for a push for stronger digital engagement.

4.4.1. Digitalization as an Enabler for Sector Decarbonization and Decentralization

Digitalization is driving the power sector towards decarbonization and decentraliza-
tion [203] by enhancing data usage and system efficiency, promoting competitive markets,
and empowering consumers, while acknowledging new regulatory challenges.

4.4.2. Proposal for a Distribution-Level Retail Electricity Market

Ref. [204] suggests a new retail electricity market model managed by DSOs, incorporat-
ing DERs and employing advanced algorithms for real-time pricing and DER optimization,
Appl. Sci. 2024, 14, 4528 22 of 33

indicating the potential for lower electricity rates and improved market efficiency and
consumer participation.

4.4.3. Digital Customer Relationship Management Systems for Customer Engagement

Advancements in CRM systems, highlighted in [72], show a shift towards engagement-
focused strategies, emphasizing the importance of social CRM (SCRM) for deepening
customer relationships and personalizing experiences in the electricity sector.

4.4.4. Digital Platforms and Tools for Better Energy Management

The transition to decentralized energy systems accentuates the role of digital platforms
in improving energy management and consumer engagement. Studies [36,205] discuss
integrating smart technologies and the FEEdBACk project, underscoring the importance of
advanced technologies and social science methods in promoting energy-efficient behaviors.
These studies focus on the pivotal role of digitalization in enhancing customer engage-
ment, market efficiency, and the integration of renewable energy sources and reflect on the
power sector’s evolution towards more sustainable and consumer-centric operations.

4.5. Grid Services and Ancillary Markets

This section delves into digitalization’s impact on electricity markets, focusing on the
integration of DRESs into ancillary services like frequency regulation and voltage control.
The increasing presence of DRESs challenges traditional grid management practices, driving
the need for new market mechanisms and models to ensure grid resilience and efficiency.

4.5.1. Market for Ancillary Services like Frequency Regulation and Voltage Control
The shift towards decentralized power systems, fueled by DRESs, is transforming
ancillary services in distribution networks. This necessitates novel market tools for energy
storage integration and SG advancements [73] to tackle renewables’ intermittency through
state-of-the-art energy storage and grid management solutions. The associated challenges
include regulatory barriers and the need for substantial investment in smarter grids capable
of handling a larger share of renewable energy.
The emergence of DG introduces competitive dynamics in ancillary service markets,
with studies [129,206,207] highlighting the need for flexible energy resources and future
market designs. These include developing pricing mechanisms for ancillary and reactive
power services and optimizing such services at the distribution level.
Research has identified barriers to integrating novel ancillary services at the distribu-
tion grid level, such as inertial response and voltage regulation [73]. The transition poses
stability and security challenges and requires effective market tools for service procurement
and addressing technical, regulatory, and financial challenges.
The future directions will require dynamic and flexible market designs that support
the quick dynamics of renewable resources and should aim to enhance system reliability
and efficiency through innovative regulations and market strategies.

4.5.2. Economic Models and Pricing for These Services

Integrating DERs into grids demands innovative pricing and economic models for
the ancillary services that are essential in renewable-heavy systems [207]. An optimization
model for distribution-level ancillary service pricing is proposed in [129], alongside P2P
market designs for grid support and prosumer incentives, particularly with BESSs [132,208].
These models aim to enhance grid operation and accommodate multi-market dynamics at
the distribution level, paving the way for efficient and sustainable energy management.

4.5.3. Software for Managing Participation in Ancillary Markets

The transition to renewable energy emphasizes the need for software that manages
flexible resources in ancillary service markets (ASMs). The research in [209] explores inte-
grating DRESs into ASMs, focusing on overcoming grid challenges through P2P market
Appl. Sci. 2024, 14, 4528 23 of 33

designs [132]. It stresses the importance of legislative adaptability, the technical readi-
ness of DERs, and advanced control strategies for effective ASM participation. This ap-
proach underscores software’s critical role in optimizing DER integration for grid stability
and efficiency.

4.6. Reimagining Pricing Strategies in the Energy Market

The evolution of the electricity market demands innovative pricing strategies and tariff
designs driven by digitalization and the integration of renewables. This section reviews how
digital tools and artificial intelligence are reshaping power distribution pricing, focusing
on the impact on consumer behavior, ensuring cost recovery, maintaining fairness, and
utilizing AI for dynamic pricing models. It aims to navigate the complexities of market
pricing, balancing efficiency, fairness, and innovation.

4.6.1. Impact of Pricing Mechanisms on Consumer Dynamics

Recent studies have highlighted the significant influence of pricing mechanisms on
consumer behavior and the overall energy ecosystem. The research in [133] explores these
effects, whereas Ref. [210] examines the optimal pricing designs for varying consumer
demographics, emphasizing customized strategies to boost engagement and efficient energy
use. The role of digital technologies like smart meters and comparison tools in promoting
consumer interaction with time-based tariffs and DR is discussed in [36], enhancing pricing
transparency and consumer understanding. Additionally, Ref. [143] proposes a dual-stage
pricing model optimizing social welfare and utility company benefits, illustrating the shift
towards socioeconomically mindful pricing strategies.

4.6.2. Navigating Cost Recovery and Fair Pricing

As digitalization intersects with evolving pricing strategies, the focus on sustainable
and equitable tariff designs intensifies. The research in [211] introduces a self-sustaining
dynamic tariff model that uses real-time data to reflect demand changes, ensuring financial
stability while accommodating consumption trends. Concurrently, Ref. [147] explores DR
strategies that integrate renewable energy, advancing towards environmentally friendly
energy solutions.
Highlighting the role of pricing in the transition to renewable-based grids, Ref. [133]
examines its influence on consumption and production patterns, indicating pricing’s piv-
otal role in steering the market towards sustainable energy practices. Additionally, the
exploration of innovative tariff tools in Ref. [211] tackles the efficiency and fairness balance,
suggesting that digital advancements offer promising avenues to address these challenges.
These discussions emphasize the essential contribution of digital tools to shaping
cost-effective, fair pricing strategies and tariff designs that align with the technological
progress and evolving consumer expectations in the energy sector.

4.6.3. Leveraging AI for Dynamic Pricing in Energy Markets

AI and analytics are pivotal in crafting dynamic pricing models for the energy sector,
bringing efficiency and adaptability to the forefront. Research has highlighted AI’s applica-
tion in setting retail electricity prices, enhancing DR mechanisms, and optimizing energy
storage operations.
A notable study [74], introduces a smart pricing model for EV charging, addressing
both static and dynamic considerations to accommodate the rising presence of EVs. Simi-
larly, Ref. [130] proposes a flexible pricing strategy for electricity retailers, factoring in user
demand and renewable energy contributions, reflecting the market’s growing complexity
and the shift towards more responsive models.
These insights showcase the significant potential of AI and analytics in refining power
system operations and pricing strategies, pointing towards a future where energy systems
are not only smarter but also more sustainable and user oriented.
Appl. Sci. 2024, 14, 4528 24 of 33

4.7. Regulatory Compliance and Market Reporting

The digital transformation of distribution power systems brings significant benefits
but also introduces new challenges, especially in terms of cybersecurity. The research
in [158] delves into these emerging vulnerabilities, with a focus on SCADA systems and
DERs, which are vital for grid integrity. It outlines the complexity of cyber threats and
suggests comprehensive strategies to bolster security measures, ensuring the resilience of
critical grid components against potential cyberattacks.

4.7.1. Cybersecurity in Market-Based Congestion Management

The research in [131] explores how cyberattacks can exploit market-based congestion
management, particularly targeting vulnerable aggregators. By manipulating load profiles,
attackers could induce congestion and inflate consumer costs. The study suggests securing
these aggregators to safeguard demand-side management against cyber threats.

4.7.2. Impact of Cyberattacks in Integrated T&D Power Systems

Study [212] evaluates the impacts of cyberattacks on integrated transmission and
distribution systems, focusing on systems with DER integration. Utilizing the OCTAVE
Allegro method, it assesses risks and identifies attack vectors, underscoring the need for
enhanced resilience against data integrity and control signal attacks.

4.7.3. AI and ML in Enhancing Cybersecurity

The research in [22] underscores AI’s and ML’s roles in strengthening cybersecurity
within power systems. It points out the dynamic nature of cyber threats and the importance
of continuous monitoring while also demonstrating AI’s capability for pre-empting and
mitigating cyber risks.
These studies collectively emphasize the critical need for robust cybersecurity mea-
sures in the face of digital transformation in power systems. With increased complexity
and connectivity, integrating traditional and advanced tools, including AI and ML, is vital
for ensuring the reliability and efficiency of power distribution in a digitally evolving
energy market.

5. Conclusions
This systematic review has delineated the critical role of emerging digital technologies
in transforming power distribution grids in grid planning, grid operations, and the energy
market. The integration of AI, the IoT, optimization, AMI, and blockchain was identified as
pivotal in enhancing the operational efficiency, reliability, and security of these systems.
Through the analysis of over 54,000 scholarly articles, our review demonstrates how these
technologies not only optimize individual aspects of grid management but also collectively
contribute to the overall resilience and sustainability of energy systems.
Significantly, the findings from this review underscore the necessity for a strategic ap-
proach to digitalization that embraces the complexity of modern power grids and addresses
their multifaceted challenges. Data complexity and system integration are among the
primary challenges identified. Data complexity arises from the vast volume, variety, and
velocity of data generated by digital technologies, necessitating advanced big data analytics,
machine learning algorithms, and robust data integration platforms. System integration
challenges stem from ensuring interoperability among various digital technologies and
legacy systems, which can be addressed through standard protocols, middleware solutions,
and robust cybersecurity measures.
Future research should focus on overcoming the challenges of data complexity and
system integration highlighted by this review. Additionally, further exploration into the
interoperability of different technologies and their combined impact on grid performance
will be crucial. As digital technologies continue to evolve, so must our strategies for their
implementation; this will ensure that the digital transformation of power distribution grids
effectively meets the demands of the next generation of energy consumers.
Appl. Sci. 2024, 14, 4528 25 of 33

Finally, the journey to the digitalization of power distribution grids is complex and
requires continuous innovation and strategic foresight. The insights provided by this
extensive literature review contribute to a deeper understanding of this dynamic field and
lay the groundwork for future advancements that will further enable the efficient, reliable,
and secure operation of power systems worldwide.
In conclusion, as the sector moves towards an increasingly digital future, the inte-
gration of these technologies promises to enhance the adaptability and intelligence of
grid systems, thereby supporting the broader goals of energy sustainability and economic
efficiency. By addressing the challenges and harnessing the potential of digital technologies,
we can build a more resilient, efficient, and sustainable energy infrastructure.

Funding: This research received no external funding.

Conflicts of Interest: Authors Andrea Pegoiani and Samuele Forciniti were employed by the company
A2A S.p.A. The remaining authors declare that the research was conducted in the absence of any
commercial or financial relationships that could be construed as a potential conflict of interest.

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