  The smart grid is envisioned to significantly enhance the efficiency of
energy consumption, by utilizing two-way communication channels between
consumers and operators. For example, operators can opportunistically leverage
the delay tolerance of energy demands in order to balance the energy load over
time, and hence, reduce the total operational cost. This opportunity, however,
comes with security threats, as the grid becomes more vulnerable to
cyber-attacks. In this paper, we study the impact of such malicious
cyber-attacks on the energy efficiency of the grid in a simplified setup. More
precisely, we consider a simple model where the energy demands of the smart
grid consumers are intercepted and altered by an active attacker before they
arrive at the operator, who is equipped with limited intrusion detection
capabilities. We formulate the resulting optimization problems faced by the
operator and the attacker and propose several scheduling and attack strategies
for both parties. Interestingly, our results show that, as opposed to
facilitating cost reduction in the smart grid, increasing the delay tolerance
of the energy demands potentially allows the attacker to force increased costs
on the system. This highlights the need for carefully constructed and robust
intrusion detection mechanisms at the operator.
