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Smart grid has emerged as the next-generation power grid via the convergence of power system engineering and information and communication technology. In this article, we describe smart grid goals and tactics, and present a threelayer smart grid network architecture. Following a brief discussion about major challenges in smart grid development, we elaborate on smart grid cyber security issues. We define a taxonomy of basic cyber attacks, upon which sophisticated attack behaviors may be built. We then introduce fundamental security techniques, whose integration is essential for achieving full protection against existing and future sophisticated security attacks. By discussing some interesting open problems, we finally expect to trigger more research efforts in this emerging area.