2012 3rd IEEE PES Innovative Smart Grid Technologies Europe (ISGT Europe), Berlin
Device-to-Device Communication for Smart Grid
Devices
Simon Fey, Pascal Benoit, Gregor Rohbogner, Andreas H. Christ, Christof Wittwer
Abstract—This paper analyzes the applicability of existing
communication technology on the Smart Grid. In particular it
evaluates how networks, e.g. Peer-to-Peer (P2P) and decentralized
Virtual Private Network (VPN) can help set up an agent-based
system. It is expected that applications on Smart Grid devices will
become more powerful and be able to operate without a central
control instance. We analyze which requirements agents and
Smart Grid devices place on communication systems and validate
promising approaches. The main focus is to create a logical
overlay network that provides direct communication between
network nodes. We provide a comparison of different approaches
of P2P networks and mesh-VPNs. Finally the advantages of mesh-
VPN for agent-based systems are worked out.
Index Terms—Communication networks, Network topology,
Smart grids
I. I NTRODUCTION
T HE share of fluctuating renewable energy generation has
significantly increased over the last years. The electrical
system requires generation and consumption to be equal at
any point in time. In conventional energy system power
plants control their generation depending on the demand of
the consumers and ensure the compliance of this physical
conditions. In contrast, renewable generators can only produce
power when natural resources are available. This makes the
balancing more challenging.
Enhanced consumers and generators are necessary, to be able
to react to local and global grid situations. These sophisticated
devices in combination with information technology is what
experts usually call the Smart Grid.
Many different approaches exist how this Smart Grid may be
realized. Such new approaches can be clustered with respect
to their realized “control structure“ or “control concept” [1].
Common to all Smart Grid applications is the need of a reliable
and secure underlying communication infrastructure.
For instance, a home energy management (HEM) system
might communicate via the Internet with the control center
of a Virtual Power Plant (VPP) in order to influence the
energy consumption of the building. In this case the two
devices which are communicating are the HEM and a server
in the control center. In this scenario the HEM will most
likely use the Asymmetric Digital Subscriber Line (ADSL) or
Cable Internet connection of the household. In another Smart
Grid application a charging station of an electric vehicle (EV)
receives energy tariffs via GSM to charge the battery with
respect to the electricity grid.
S. Fey, A. H. Christ are with Offenburg University of Applied Science,
Germany, e-mail: simon.fey@hs-offenburg.de
P. Benoit, G. Rohbogner and C. Wittwer are with the Department Smart
Grid, Fraunhofer Institute for Solar Energy Systems, Freiburg, Germany
978-1-4673-2597-4/12/$31.00 ©2012 IEEE
Many other applications are conceivable. Applications that
belong to different domains (e.g. transmission, distribution,
markets, customers) evince different communication and infor-
mation structures [2]. To merge these different communication
infrastructures, domain independent middleware that ensures a
fast, secure and stable communication and provides interfaces
for numerous plug and play feasible devices and applications
is required. This paper focuses on finding a solution to
reach “network interoperability” considering the GRIDWISE
Architecture Council (GWAC) Interoperability Stack [3]. In
particular, this paper examines several well-known techniques
for building up a logical network towards the applicability in
the Smart Grid solutions. We will discuss several problems
which we expect to occur when applying state of the art
communication techniques (e.g. VPN or P2P) to Smart Grid
applications.
This paper is organized as follows. Section II introduces
an agent-based control system for a Smart Grid and points
out the need for decentralized communication and direct
information exchange between devices. In Section III we
define our understanding of the term Device-to-Device (D2D)
and how logical overlay networks help in providing a virtual
network on top of a heterogeneous network. The required
features that a communication network has to provide to
fulfill the requirements of an agent-based control system are
pointed out in Section IV. Section V then compares VPN and
P2P as two different approaches to create an overlay network
and provides a comparison on several projects that implement
those concepts. In Section VI we conclude our results on
decentralized communication networks and their applicability
to the Smart Grid.
II. AGENT- BASED S MART G RID
This section will outline an application much discussed in
former and current times: agent-based energy management
structured in a fully distributed manner and following a grid-
oriented approach [1], [4], [5].
In an agent-based Electrical Power System (EPS) different
computer systems, distributed in the electric grid and each re-
sponsible for the control of an underlying physical system, are
interconnected via a heterogeneous communication network.
On every device one or more software agents are running.
Such systems are called Multiagent Systems (MASs). Figure 1
depicts a MAS following a fully distributed control structure.
Within this example the MAS is responsible for controlling
the voltage level in a low-voltage grid while trying to allow a
maximum of renewable energy generation.

Since there is no central control unit for the voltage-grid,
energy agents (A, B and C in Figure 1) have to cooperate and
negotiate when, how and at what intensity each is allowed
to use the energy grid. Such an application requires an
appropriate D2D communication, which we will illustrate in
the following paragraph.
In our example, agents are located in the same low-voltage
grid, willing to cooperate for the purpose of voltage control.
The agents differ in the communication transmission mediums
they have at their disposal and in the underling physical
system for which they are responsible (e.g. a combination
of a Combined Heat and Power (CHP) and thermal storage).
Here agent A and agent B have a conventional ADSL con-
nection whereas agent C uses a Global System for Mobile
Communications (GSM) connection to the Internet.
GSM
GSM
WWW
ADSL
ADSL
Agent Agent GSM
A B C We define D2D communication as a direct communication
Agent
Fig. 1. Direct Communication Between Energyagents via a Heterogeneous
Communication Network
The first steps which are necessary before agent B is able
to negotiate with agent A and C after connecting to the ADSL
router are:
1) Figure out how to connect to other agents in the Internet:
At first, the system or agent needs to figure out information
about how to connect to other agents in the Internet. This
service can either be provided by a central server, or in a
peer-to-peer manner, as we propose in chapter V.
2) Find the appropriate communication partner: Since the
agent B is only interested in communicating with agents which
offer a certain service or/and are located in the same low-
voltage grid, the communication system must provide further
information about the offered service and the position of the
agents within the electric grid.
After finding the appropriate communication partner, the
agents need to synchronize their system times, e.g. to ensure
that they negotiate within the same time slots. Furthermore
it is necessary to ensure that third parties cannot listen to
the communication or manipulate the negotiation process.
For that reason an encrypted data transfer with a reliable
2
authentication is mandatory.
The initialization of communications between two agents
requires an overlay network which provides the following
functionality and offers an independent interface for any
application assigned to the Smart Grid:
1) Find other agents in the communication network after
first plug-in (Bootstrapping)
2) Provide information about where detected agents are
located in the electric grid and which services they offer
(Search methods)
3) Ensure fast and reliable communication between agents
(Self-healing, Connectivity)
4) Ensure secure data exchange and authentication (Secu-
rity)
III. D EVICE - TO -D EVICE C OMMUNICATION
Communication between two devices is a commonly used
technique occurring billions of times in every second [6].
Millions of switches and routers, providing the infrastructure
of the Internet, basically exchange data between two devices.
Radio transmitters were already able to communicate between
two devices one century ago. Cell phones communicate with
central stations. These stations are routing calls between the
two subscribers. Every single transmission takes place between
two devices.
This raises the issue about the term D2D in this paper. The
purpose of this section is to define D2D communication and
to distinguish it from the cases explained above.
A. Definition of Device-to-Device communication
between two applications, located in different nodes of a
dedicated logical network, distributed over a heterogeneous
underlying network.
Fig. 2. Heterogeneous Underlying Network
1) Underlying Network: Figure 2 points out the
heterogeneous underlying network. The term heterogeneous
refers to separated networks and that the technologies and
network protocols might be different. The underlying network
includes a complete protocol stack responsible for physical
transmission over the medium and routing of Protocol
Data Units (PDU) between two end-devices. It offers the
possibility for applications to establish connections to any
other application on any other node.

Fig. 3. Direct Communication Between Logic Nodes Over a Hybrid
Underlying Network
The small red circles and connections added in Figure 3
illustrate D2D communication based on this heterogeneous
underlying network. It forms a new logical network of a
subset of nodes (Figure 4).
Fig. 4. Logical D2D Network
2) Dedicated Logical Network: According to the require-
ments identified in Chapter II, Smart Grid applications, first of
all, need to reach other devices suitable for their application
over the underlying heterogeneous communication network.
Thereby the number of nodes in the underlying heterogeneous
network might exceed the number of Smart Grid devices
by several orders of magnitude. Hence, it is reasonable to
concentrate on this subset of nodes in further considerations.
This subset forms a new dedicated logical network between
those nodes hosting Smart Grid applications. It is an overlay
network spread over an underlying heterogeneous commu-
nication network. The logical network might be established
directly between applications like, for instance, P2P networks
do. Or it can be based on virtual network links like VPNs
work. In this definition the dedicated logical network includes
both. It contains all subscribers of one Smart Grid application.
IV. R EQUIRED COMMUNICATION FEATURES
The requirements that decentralized operating devices place
on communication systems have already been mentioned in
Section II. In this chapter they are pointed out in more detail
and defined as options to check the evaluated systems for. For
this purpose we are assuming the as-is situation in today’s
Internet. The Internet is a heterogeneous network with lots
of nodes with static and dynamic network addresses. Most of
the devices that use the Internet actually are hidden behind a
router or firewall which translates local network addresses to
public addresses and back. This proceeding is generally known
3
as Network Address Translation (NAT). By default, routers do
not allow incomming connections if they haven’t been initiated
by a device from the internal, local network.
A. Self-Healing
In the area of small-scale decentralized energy systems it
is expected to have high fluctuations of devices. Since most
of today’s available monitoring and control systems rely on
GSM/GPRS or other telecommunications links such as ADSL
or Cable the link quality may change over time. Aside from
that, systems may not be supplied by power all-day and might
switch off when their service is not needed. Therefore the
network has to provide self-healing mechanisms that automat-
ically reconfigure the network to achieve scalability and handle
disappearing and appearing nodes.
B. Bootstrapping
When a new device or agent is powered on and plugged
to the Internet it will need to gather information about other
network nodes. This process is known from P2P networks and
in the following sections will be defined as bootstrapping. This
process includes steps that a new or existing node is taking to
find network nodes and connect to the network.
C. Security
In general, communication in Smart Grid requires user man-
agement to add and remove devices from the communication
network and prevent unauthorized access. Hence, security in
this perspective is defined as authentication/authorization and
traffic encryption.
D. Connectivity
Connectivity in the following defines the ability to set up
a connection between two applications. Because the Internet
is separated in local networks and public domain, it is a key
requirement for a communication system to connect devices
from all kind of networks together. First of all it is checked
if the examined communication solution can make devices to
connect at all by, for instance, using a relay in the overlay.
Secondly it is checked if a direct communication link can be
established using NAT traversal.
E. Storage and search of information
In a decentralized network the organization of information
is challenging as it gets lost with disappearing nodes.
Searching information is a key feature that a decentralized
network will have to provide for agent systems to find data or
services from other agents. A lot of effort has been invested in,
for instance, filesharing systems to ensure the availability of
information and their retrieval in highly flexible environments.

V. C OMMUNICATION N ETWORKS
Two different communication network types are considered
for decentralized, direct D2D communication. First is solving
the problem of connectivity on the application layer with
P2P protocols and second is the use of VPN which maps
a heterogeneous to a homogeneous network. Both methods
provide their own advantages and disadvantages.
Application layer based solutions can be customized for a
certain use-case and are independent of underlying systems.
Skype, for instance, solves the challenge of connectivity
on the application layer and successfully establishes
an independent P2P network structure in heterogeneous
networks. Unfortunately, it is a closed system. This network
cannot be used for other purposes than those it has been
originally designed for.
Network layer solutions provide a higher flexibility than
application layer based methods, since network and appli-
cation are separated from each other. Although most VPN
solutions are static and require a lot of configuration, VPN
is widely spread and commonly used for communication
between nodes in heterogeneous networks. A major advantage
of VPN technologies is that, due to routing over a VPN server,
hosts transparently may connect to every other host. Also
authentication and encryption is shifted to the lower network
layer. The encapsulated application protocol is not responsible
for security and has not to be aware of threads from outside
the tunnel. Centralized VPN systems are state of the art for
remote monitoring and control of field devices, e.g., a VPP
[7]. Since we are focusing on decentralized applications a
centralized communication system is not intended. In [8] and
[9] several decentralized, so called mesh-VPNs are examined
concerning their design and automatic configuration. Hence, in
the following two subsections P2P networks and mesh-VPNs
are investigated in detail for agent-based systems.
A. P2P Networks
One possible technology that could be used for commu-
nication in Smart Grid are P2P networks. P2P networks for
Smart Grid have been considered in [10]–[13]. P2P networks
set up an overlay network on the application layer which
means that addressing, routing and network management are
handled by the application. Two famous representatives for
P2P networks are Gnutella and BitTorrent. Both networks
have been designed for file-sharing between peers without
having a client-server infrastructure. Although we know that
those protocols will not serve for setting up an agent-based
Smart Grid out of the box, they are mentioned because
they provide several interesting mechanisms for decentralized
communication. Concerning the requirements listed in Section
IV, it is examined which mechanisms P2P networks provide.
Recognizing those we can determine features that have to
be included in a communication network for future work. A
matrix matching the requirements of agent-based systems with
P2P capabilities is provided in Table I.
A major advantage of P2P is the ability to traverse NAT and
Firewalls. P2P networks are approved to deal with flexible
4
nodes and loosely coupled communication for a lot of appli-
cations. They also provide efficient mechanisms to store and
search data decentralized in, for instance, Distributed Hash
Tables (DHTs).
B. Mesh-Virtual Private Network
Mesh-VPN is characterized by more than one network node
that provides packet encapsulation and routing functionality
for any kind of application protocol. Mesh-VPN is abandoning
the typical client-server structure known from centralized
VPN by adopting mechanisms from P2P networks. Mesh-
VPNs create an overlay network with virtual topology
upon existing homogeneous or heterogeneous network. The
organization of an EPS with overlay networks has already
been proposed in [10]. In [9] it is examined, how P2P
overlays and mechanisms improve VPNs to easily create
and maintain groups. A high grade of self-organization and
automatic configuration is confessed for mesh-VPNs in [8].
In Table I mesh-VPN networks are analyzed in more detail.
1) tinc-VPN: tinc [14] is an open source project that allows
to create a full-mesh VPN across the Internet. According
to its feature to forward packets between nodes from the
entire network, tinc is ideal to set up site-to-site VPNs which
means linking several Local Area Networks (LANs) to an
even bigger network. Tinc requires every connection to be
manually configured and included to the network with private
and public keys on every node.
2) P2PVPN: P2PVPN [15] is an open source Java
implementation of a full-mesh VPN. It uses BitTorrent
trackers for bootstrapping and allows to dynamically integrate
or remove nodes. P2PVPN tries to directly connect with
every network node and supports relaying packets if nodes
are unreachable behind a NAT.
3) cloudVPN: cloudVPN is a very similar networking
approach to tinc. It also features NAT traversal but differs from
cloudVPN in packet forwarding and site-to-site functionality.
4) Hamachi: Hamachi [16] has become famous in the
field of online computer games as it is a very user friendly
tool to create a virtual LAN across the Internet. Hamachi is
based on a central service hosted by LogMeIn to bootstrap
the network. NAT traversal also allows to set up a direct
communication link in a virtual overlay network.
5) N2N: Network to Network (N2N) [17] spans up a
virtual layer 2 network across separated networks. Nodes
initially connect to a supernode and may set up direct links
to other edge nodes traversing NAT.
Table I points out, that tinc and cloudVPN meet the re-
quirements in connectivity and security. They provide routing
mechanisms to deal with nodes that disconnect from the over-
lay and implement NAT traversal mechanisms to set up direct
communication links between hosts. Although they initially
 5

TABLE I
C OMPARISON OF DECENTRALIZED COMMUNICATION NETWORKS FOR S MART G RID

Bootstrapping Security Connectivity Self-Healing Storage and search of

information
Mesh-VPN
Tinc and cloudVPN The traffic between Any-to-any connectivity Automatic routing It is not intended to
• tinc require pre-configured network nodes is is supported by rout- mechanisms will have extra
• cloudVPN connections. encrypted by using ing traffic in the overlay route traffic across applications besides
SSL/TLS. network. Both tinc and other nodes if one of the virtual private
Nodes only accept cloudVPN provide NAT the nodes becomes network.
connections from traversal methods to set unavailable.
authorized nodes by up direct links between
using public and nodes.
private keys.
Edge nodes have to N2N uses symmetric Any-to-any connectivity
• N2N connect to a known encryption (Twofish) is given by packet
supernode first. between nodes. forwarding in the
A differentiation by overlay on layer 2.
user or single user re- Direct communication
vocation is not pos- between devices is
sible because every supported by traversing
node uses the same firewalls and NAT.
key.
For Hamachi Hamachi uses Any-to-any connectivity
• Hamachi networks there is SSL/TLS for by routing in the
a dedicated cloud encryption. overlay. Dynamic direct
service available that Authentication is links are supported by
every network client handled with public NAT traversal.
uses to find other and private keys.
nodes. Every client is
keeping a list of
authorized nodes.
P2PVPN is using a SSL/TLS encryption Any-to-any connectivity
• P2PVPN BitTorrent tracker for Optional hierarchical by routing in the over-
initially retrieving a PKI for Authentica- lay. Direct links are es-
list with active net- tion allowing users to tablished if peers are
work nodes. invite other users public. NAT is not sup-
ported.
Peer-to-Peer networks
Gnutella uses GWe- Several clients Gnutella supports the Gnutella is a highly Gnutella supports
• Gnutella bCache for caching provide an encryption dynamic setup of direct self-organizing and distributed search
and retrieving a num- of the traffic between connections between self-healing network routines based upon
ber of active Gnutella two Gnutella nodes. peers for file exchange that can handle high DHT.
on/from a webserver. Since Gnutella has using NAT traversal. fluctuations of nodes.
been designed to Relaying in the overlay
be an open network is only implemented
no authentication is for search and ping
supported. messages.
BitTorrent clients use Initially BitTorrent BitTorrent does not Since there is no Several BitTorrent
• BitTorrent a tracker to retrieve did not support any support relaying overlay network for clients provide
a list of active P2P security features. messages in the overlay. relaying messages distributed search
nodes. Later versions include It does provide direct BitTorrent does not methods based upon
encryption and user P2P connections using provide self-healing DHT to achieve a
authentication to keep NAT traversal mechanisms. fully-decentralized
file-transfers private. trackerless network.

were considered as suitable communication networks they
suffer in bootstrapping. Every connection has to be configured
manually. This will not work out for an agent-based system,
where including a new agent would require to adjust every
other agents configuration. Hence, more dynamic systems have
been considered, such as Hamachi, N2N and P2PVPN.
Hamachi is very suitable according to its self-organization and
connectivity features. New nodes can easily be added to the
network without manual configuration. The bootstrapping un-
fortunately uses the companies server application and Hamachi
therefore cannot be considered as an independent system.
N2N in our evaluation scores in terms of efficiency as the
application focuses on a very tiny implementation for devices
with low capability. The automatic management of the overlay
can deal with appearing and disappearing nodes. Unfortunately
it does not provide the ability to exclude a single network node
without changing the symmetric key on every other node and
therefor lacks in user management.
The idea of P2PVPN in general matches the requirements
of agent-based systems especially concerning bootstrapping.
It makes use of BitTorrent trackers and supports peer-
information exchange if at least one node is known. Direct
communication links are created between two nodes if it is
possible. If not, it communicates through other nodes which
act as a relay unit. Still it is not a sufficient communication
network for agents in heterogeneous networks as it lacks in

NAT traversal and scalability.
VI. C ONCLUSION
In this paper we described the need for decentralized
communication in the Smart Grid especially for agent systems.
The key functionalities of decentralized P2P communication
networks have been pointed out. P2P networks demonstrate
how robust decentralized networks should be built. They allow
fast communication with direct communication links between
nodes and demonstrate the handling of high node fluctuations.
These key functionalities should be implemented in mesh-
VPN to support an agent-based Smart Grid in the future.
Agent-based systems will require a middle layer offering basic
connectivity between applications. The underlying network
must help with finding agents, as well as storing and searching
for information. They therefore have to adopt methods from
P2P networks. As pure P2P networks limit the possibilities and
flexibility of the actual application, we conclude autonomic
mesh-VPN are the most suitable approach to create an ap-
plication independent plug-and-play communication network
in shared heterogeneous networks. Mesh-VPNs implement
NAT traversal and self-organization from P2P networks and
hence are more flexible regarding the encapsulated application
protocol. Several mesh-VPNs have been considered for an
agent-based Smart Grid, but it turns out more effort has
to be invested on bootstrapping, user management and the
overlay topology and application services such as searching
for near-by agents. Addressing those issues and improving the
state of the art mesh-VPNs would enable a variety of new
decentralized applications in the Smart Grid, not just agent-
based systems.
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VIII. B IOGRAPHIES
Simon Fey graduated in electrical engineering and
information technology at Offenburg University of
Applied Science. He worked at Fraunhofer Institute
for Solar Energy Systems (ISE) on acquisition and
storage of measurement data from power plants.
After several months as research assistant at the ISE
he gained a scholarship and is now member of the
graduate school Small Scale Renewable Energy Sys-
tems under the supervision of Prof. Dr. Andreas H.
Christ. He is currently writing his thesis on IT-based
communication structures and system architectures
for renewable energy systems.
Pascal Benoit graduated in electrical engineering
and information engineering at Karlsruhe Institute
of Technology (KIT). He specialized in renewable
energies and information technologies. He is work-
ing at Fraunhofer Institute for Solar Energy Systems
(ISE) in the department of Smart Grids. There he is
active in the field of smart integration of electric ve-
hicles, information an communication technologies
for energy systems and control systems of large-
scale concentrator photovoltaic (CPV) plants.
 7

Gregor Rohbogner received the Dipl.-Wirt.-Ing.

degree from the RWTH Aachen University in Juli
2011. Since 2010 he is a researcher within the
Fraunhofer Institute for Solar Energy Systems (ISE).
First he focused on topics of in-house and Smart
Grid communication for his diploma thesis. Since
mid of 2011 he works as research fellow on multi-
agent systems for Smart Grid applications. Further
interest include Peer-to-Peer networks, Smart Home
technologies, optimization of decentralized energy
resources and network control technologies.

Andreas H. Christ received the Doktor degree in

electrical engineering from Technische Universität
Darmstadt, Germany, in 1988.
He joined the Central Research and Development
Laboratories and later on the Public Communica-
tion Department of Siemens AG, Munich, Germany,
where he was engaged in microwaves, mobile com-
munications and fiber-to-the-home projects.
In 1993, he became a Professor at Offenburg Uni-
versity of Applied Sciences, Germany. In 1997,
he became Head of the Department ’Media and
Information’ and since 2007 he is Vice-President of Offenburg University of
Applied Sciences. Also, as Head of the Information Centre he is responsible
for the deployment of and support for e-learning and electronic media for
education and research purpose.
His professional interests include technologies for mobile Internet.

Christof Wittwer was born in 1967 and stud-

ied electrical engineering at the University Kaiser-
slautern. He has been working at the Fraunhofer
Institute for Solar Energy Systems ISE since 1992.
Between 1996 and 1999 he worked as a research
assistant in the fields of building services engineer-
ing and systems control receiving his promotion in
1999 at the University of Karlsruhe. Since 1999
Christof Wittwer has been working as a project man-
ager at Fraunhofer ISE concentrating on research
and development of networked control systems for
decentralized power generation systems. Since 2010 he is head of Department
Smart Grids at Fraunhofer ISE.