The problem of constructing malicious data attack of smart grid state estimation is considered together with countermeasures that detect the presence of such attacks. For the adversary, using a graph theoretic approach, an efficient algorithm with polynomial-time complexity is obtained to find the minimum size unobservable malicious data attacks. When the unobservable attack does not exist due to restrictions of meter access, attacks are constructed to minimize the residue energy of attack while guaranteeing a certain level of increase of mean square error. For the control center, a computationally efficient algorithm is derived to detect and localize attacks using the generalized likelihood ratio test regularized by an L_1 norm penalty on the strength of attack.
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