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According to the names of the different parts of IEC 61850 it is a standard for communication networks and systems in substations. It was developed with the goal of meeting the requirements of all different functions and applications in the substation, such as:Protection
Control
Automation
Measurements
Monitoring
Recording
At the same time it should support different tasks related to the above listed substation functions, such as:

Engineering
Operations
Commissioning
Testing
Maintenance
Event analysis
Security
IEC 61850 was developed over a period of about 10 years and was the result of the combined efforts of numerous industry experts from around the world. Initially there were two separate activities:

The development of GOMSFE (Generic Object Models for Substation and Feeder Equipment) as part of UCA (the Utilities Communications Architecture)
The IEC 61850 project for development of a standard substation communications protocol under Technical Committee 57
The mix of professionals involved in the development included utility and manufacturer representatives, consultants and software developers. Many of them with a lot of experience and strong beliefs in their own opinions. So if you can imagine a group of such people in a room discussing a subject with high level of importance, it will be easy to compare it to multiple collisions over the shared media of the meeting room.

That is why Fred (the frog beanie-baby) played such an important role in the development of IEC 61850. When we realized that collisions are slowing down the development, we at least agreed to change to a token-passing communications method. And Fred was the token. So only the person that held the token could speak. Everybody else had to shut up. Without Fred probably we will still be arguing some issue in a meeting room somewhere around the world.

Fred

The good thing about heated discussions is that they create an atmosphere for great ideas. For example in a small room at O’Hare airport discussions gave birth to the UCA GOMSFE “bricks” - the building blocks of the device object models that can help us model even the most complex IED. And the concept of the high-speed peer-to-peer communications represented by another acronym - the GOOSE (Generic Object Oriented Substation Event).
One of the great accomplishments of the development process was that all involved companies were not just talking about the development of a standard for substation communications, but were actually building devices to see if it works. We can say that probably this is the best example of a successful multi-vendor project that the electric utility industry knows. And to make sure that it really works, a couple of times a year we had the interoperability demonstrations, with the main goal of each participant to win the great prize - Lucy - Goosy (another beanie-baby) given to a vendor that has demonstrate exchange of GOOSE messages with another vendor’s IED - verified by the present utility engineers, and to utilities implementing GOOSE messaging in their substations.

Lucy

The situation was not very different on the other side of the Atlantic. In 1995, new work item to develop an international standard for substation communication protocol was accepted by the IEC TC57 plenary meeting in Minneapolis, USA. Already at the second meeting in San Francisco, first contacts with the UCA efforts were initiated. However, at that time, the technical background of the experts involved was too different. The UCA experts with a strong background in TCP/IP based communication had little common vocabulary to share with the relay engineers and the experts for telecontrol protocols. So it was almost impossible to have real discussions.
So for the next two years, the three IEC working groups responsible for the development of IEC 61850 continued more or less independent from the UCA activities. Quite remarkable that they developed independent from the UCA activities the concept of the logical nodes, which is basically equivalent to the UCA GOMSFE “bricks”. The discussions in three working groups with a total of more than 70 experts were sometimes challenging. We realized soon, that the three working groups could not act independently. However, since you can not produce creative work with 70 experts, task forces were created. So each meeting was a mix of parallel working group meetings and task force meetings. While we started with two or three day meetings, we soon ended with having full week meetings in order to get the optimum out of a meeting.
In 1997 a conclusion was reached that due to the similarities of both activities it would be beneficial to the industry to have a single standard for substation communications and the members of the UCA working group were integrated in the IEC TC 57 working groups.
So the standard was completed with the efforts of three working groups:

Working group 10 focused on the definition of the functional architecture and general requirements
Working group 11 addressed the communications within and between Unit and Station levels that are now know as the Station Bus
Working group 12 developed the communications within and between Process and Unit levels known as Process Bus
After the publication of the standard and its wide spread application in hundreds of substations the UCA International Users Group is working on resolving the different technical issues. WG11 and WG12 have been integrated into WG10, so WG10 has now the full responsibility for IEC 61850. The solutions and new developments, such as the modeling of power quality monitoring functions addressed by WG 10 will be included in amendments and later in version 2 of the standard.
IEC 61850 was developed on the basis of some key requirements:

It should be technology independent
It should be flexible
It should be expandable
By meeting the above requirements the standard allows us to meet the changing needs of the electric power industry and take advantage of the developments in computers, communications and sensors technology.
The IEC 61850 standard consists of fourteen different documents that cover a wide range of issues and make it clear that it is much more than a communications protocol definition. It defines not only how to communicate over the substation local area network, but also what to communicate. It provides an abstract model of the substation equipment and functions that can be used as the foundation of the development of different tools.
The standard also addresses the substation integration and automation engineering process and specifies the conformance testing for intelligent electronic devices (IEDs) that support it.
It needs to be well understood that the IEC 61850 standard does not specify individual implementations, communication architectures or products. It also does not attempt to describe any details of the functionality of the different devices, such as algorithms, but focuses only on the specification of the externally visible functionality of primary or secondary equipment, functions or implementations in substation protection, control and automation systems.