**Privacy-Functionality Trade-O** ff**: A Privacy-Preserving Multi-Channel Smart Metering System**

#### **Xiao-Yu Zhang 1,\*, Stefanie Kuenzel 1,\*, José-Rodrigo Córdoba-Pachón 2 and Chris Watkins 3**


Received: 8 April 2020; Accepted: 18 June 2020; Published: 21 June 2020

**Abstract:** While smart meters can provide households with more autonomy regarding their energy consumption, they can also be a significant intrusion into the household's privacy. There is abundant research implementing protection methods for di fferent aspects (e.g., noise-adding and data aggregation, data down-sampling); while the private data are protected as sensitive information is hidden, some of the compulsory functions such as Time-of-use (TOU) billing or value-added services are sacrificed. Moreover, some methods, such as rechargeable batteries and homomorphic encryption, require an expensive energy storage system or central processor with high computation ability, which is unrealistic for mass roll-out. In this paper, we propose a privacy-preserving smart metering system which is a combination of existing data aggregation and data down-sampling mechanisms. The system takes an angle based on the ethical concerns about privacy and it implements a hybrid privacy-utility trade-o ff strategy, without sacrificing functionality. In the proposed system, the smart meter plays the role of assistant processor rather than information sender/receiver, and it enables three communication channels to transmit di fferent temporal resolution data to protect privacy and allow freedom of choice: high frequency feed-level/substation-level data are adopted for grid operation and managemen<sup>t</sup> purposes, low frequency household-level data are used for billing, and a privacy-preserving valued-add service channel to provide third party (TP) services. In the end of the paper, the privacy performance is evaluated to examine whether the proposed system satisfies the privacy and functionality requirements.

**Keywords:** smart grids; smart energy system; smart meter; GDPR; data privacy; ethics
