Smart grid initiatives are becoming more and more achievable through the use of information infrastructures that feature peer-to-peer communication, monitoring, protection and automated control. The analysis of smart grid operation requires considering the reliability of the cyber network as it is neither invulnerable nor failure free. This paper quantitatively evaluates the reliability of modern power systems, which incorporates the impact of cyber network failures on the reliability of the power network. In this paper, four types of interdependencies are defined and a new concept of state mapping is proposed to map the failures in the cyber network to the failures of the power network. Furthermore, in order to evaluate the impact of direct cyber-power interdependencies on the reliability indices, two optimization models are introduced to maximize the data connection in the cyber network and minimize the load shedding in the power network. The effectiveness of proposed reliability evaluation method is shown by a smart microgrid application. The methodology presented in this paper is a start point to optimize the future power grid which has increasingly interdependencies between cyber and power networks.

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