  Security has become a main concern for the smart grid to move from research
and development to industry. The concept of security has usually referred to
resistance to threats by an active or passive attacker. However, since smart
meters (SMs) are often placed in unprotected areas, physical security has
become one of the important security goals in the smart grid. Physical
unclonable functions (PUFs) have been largely utilized for ensuring physical
security in recent years, though their reliability has remained a major problem
to be practically used in cryptographic applications. Although fuzzy extractors
have been considered as a solution to solve the reliability problem of PUFs,
they put a considerable computational cost to the resource-constrained SMs. To
that end, we first propose an on-chip-error-correcting (OCEC) PUF that
efficiently generates stable digits for the authentication process. Afterward,
we introduce a lightweight authentication protocol between the SMs and
neighborhood gateway (NG) based on the proposed PUF. The provable security
analysis shows that not only the proposed protocol can stand secure in the
Canetti-Krawczyk (CK) adversary model but also provides additional security
features. Also, the performance evaluation demonstrates the significant
improvement of the proposed scheme in comparison with the state-of-the-art.
