By applying power usage statistics from smart meters, users are able to save energy in their homes or control smart appliances via home automation systems. However, owing to security and privacy concerns, it is recommended that smart meters (SM) should not have direct communication with smart appliances. In this paper, we propose a design for a smart meter gateway (SMGW) associated with a two-phase authentication mechanism and key management scheme to link a smart grid with smart appliances. With placement of the SMGW, we can reduce the design complexity of SMs as well as enhance the strength of security.
