# Software Defined Networking Architecture for Energy Transaction in Smart Microgrid Systems
## 3 Software-Defined Network (SDN) for Transactive Energy in SMGs  
An SDN Architecture is the network layout that consists of the SDN controller and the SDN nodes/devices. [PERSON] et al. [16] review four main SDN architecture types: centralized controller designs, distributed controller design, hierarchical controller designs, and hybrid designs. The typical SDN network is a centralized controller design that consists of a single control and data plane, whereby all the SDN devices connect to a single SDN controller. Figure 4 below from [PERSON] et al. [16] represents this configuration. Figure 4 was adapted from [PERSON] et al. [16], and it shows that each network device connects to the SDN controller in a star network configuration for the control paths. The controller and the application core network reside in the same physical environment in a real-world SDN example. The data paths from the users to the Application core are then also in a star configuration, which means that the control path and data path exist on the same network infrastructure. For example, financial institutions (banks) use a shared database infrastructure that enables their branches or ATMs to access account and customer information for financial services and banking processes. The SDN controller is located at the exact location of the database infrastructure. Therefore, all the remotes require access to the same Intranet for control and data functions. There is no need for site-to-site communication because neither the branches nor the ATMs need information from other branches or ATMs. This functional requirement means that the centralized SDN architecture is preferred for a financial institution. However, as [PERSON] et al. [16] explain, a centralized SDN architecture cannot efficiently handle large-scale networks, and a hierarchical controller design needs to be considered. Another example of a centralized SDN network is electrical network management functions such as advance metering infrastructure (AMI) and active fault management (AFM), which require a centralized SDN architecture because information on AMI and AFM is stored in a centralized network environment. There is no requirement for site-to-site communication; the remote site only needs a communication channel to the database infrastructure to send metering information and fault status information. This function means the centralized SDN architecture is optimal for electrical network management functions. However, centralized SDN architecture networks can face particular challenges and limitations. Authors [PERSON] et al. [27] found that an SDN with a single SDN controller may experience scalability, data utilization bottleneck and single-point-of-failure challenges  
Figure 4: Typical centralized SDN architecture. when presented with increasing network size. Although a distributed controller system may have advantages that solve these challenges, they also identified the following challenges that the distributed controller system needs to address,  
* Bandwidth between controllers on the east\(-\)west interface (from Figure 3) adds extra load on the network. * Load migration between controllers needs to be efficient. * Limited studies on distributed SDN controller systems address reliability considerations. Reliability in SDN ensures that the data path between end nodes is always available. While scalability is a significant limitation [16], a balance between the best route and the network capability is required to achieve optimal reliability. The data path relies on the availability of the network, and the fewer dependencies there are between SDN nodes, the more reliable the data path becomes. Research on latency-oriented controller placement to optimize the delay between SDN switches and SDN controllers for the shortest path assumes the network is reliable. [PERSON] et al. [28] reveal that research does not consider network failures in their design.