Continuous development of communication technologies in terms of speed, reliability and flexibility has made it possible to transform traditional substation wiring into a completely digital environment. Although basic communication technologies were used in substations since the 1980’s, their implementation was focus on signal exchange between the bay and station level, and between station level and dispatching centres. Communication protocols were mostly manufacturer dependent, and system interoperability between various devices, in particular between devices from different manufacturer, was extremely difficult. Only by introducing the set of standards IEC 61850 Communication Networks and Systems in Substation, communication barriers have been removed and interoperability on all station levels was enabled. By defining standardized communication blocks, data exchange on the bay level is eliminating the needed for excessive bay cabling and wiring, completely shifting the design and interlocking logic to a new approach. With an even bigger impact on substation design and equipment design, communication on the process bus introduced the potential for a completely digitalized substation. Primary switching equipment like circuit breakers and disconnectors could be directly connected to the communication system, thus controlled and monitored completely as an Intelligent Electronics Device. According to the IEC 61850-9-2 the analogue representation of voltage and current in the primary circuit can be represented via sampled values, forming a continues data stream in the communication network, available for further processing for all IEDs connected to the same network. Today’s Substation Automation Systems include three hierarchal levels; substation level, bay level and process level. Before the introduction of the IEC 61850 there was no comprehensive communication standard covering all substation levels, thus the information exchange between the levels was performed with incompatible standards which had to adapted by implementing various protocol gateways or simplified binary or analogue information exchange. The data exchange according to standard IEC 61850 is performed on the Ethernet data link layer, which was enabled by continuous development of network technology in terms of speed and reliability. The Ethernet network topology has a significant impact on the overall communication performance. The five basic topology types used in substation are a) Bus Topology b) Ring Topology c) Star Topology d) Multiple Star Topology and e) Ring-Star Topology. Depending on the network topology, it is possible to incorporate advanced communication functions like network redundancy and enhanced speed and reliability. Object oriented modelling of substation, according to IEC 61850, is based on Logical Nodes which represent the smallest functional object that can receive and send data. Logical Nodes are standardized function blocks organized and defined with alphanumeric characters (e.g. PTOC – Protection Time Over Current), wherein the first sign indicates the logical node group. Two main Logical Node groups are: • Logical Nodes representing equipment on the process level. • Logical Nodes representing substation automation and protection functions. Although the initial standard was created for communication networks within substation, due its flexible and expandable data structure, the application has since spread to various industries (e.g. Oil and Gas, Renewables, Hydro power plants) creating numerous application specific Logical Notes. In addition to the function defining data structure, the standard IEC 61850 defines groups of communication mechanisms for information exchange as; 1-Sampled Values, 2-GOOSE messages, 3-Time synchronization, 4- Vertical communication. As Ethernet technology is the underlying data link layer, the communication is inherently nondeterministic, hence it introduces a certain level of communication uncertainty. However, to ensure proper and timely action of the control, protection and monitoring functions in substations a priority tag is added to every data packet on the communication bus. These priority tags enable network elements to transfer data with the highest priority first, ensuring that signals like Trip to arrive at the designation within maximum transfer time limit defined by the standard. The most widely used group within the IEC 61850 is Generic Object-Oriented Substation Event (GOOSE) message. This is an extremely flexible tool as it is an event triggered data exchange event transferred from and to all station levels that can contain binary states or even analogue values. However, the exchange of measured data values, in terms of Sampled Values of primary voltage and current, has not been extended to practice except for pilot projects and proof of concept projects. The data exchange of Sampled Values is based on the principle of publisher and subscriber. Measurement transformers or merging units digitalize analogue values and store/publish them in the output buffer, making them available for any subscriber on the network. Each sampled value data package is marked with a time tag in order to form a continuous stream of measured values. Sampled Value Control (SVC) system is introduced to control the data stream from the Publisher output buffer to the subscriber input buffer. Two types of Sample Value models are used: • For protection functions: a stream of 80 samples per cycle is used (4000 samples/second). • For power quality measurement functions: a stream of 256 samples per cycle is used (12800 samples/second) in data blocks of 8 samples, resulting in 32 data blocks per cycle. Numerical protection relays, in traditional substation topologies, determine the state of protected object or zone based on the analogue measured values of current and voltage. In case of a fault state of the protected object or zone, protection relays activate tripping signals in order to isolate the fault as fast as possible and as close to the fault as possible. As already mentioned before, digitalized substations do not use analogue values of current and voltage obtained by measurement, but rather sampled values which are the representation of the substation primary circuit. Testing of traditional numerical relays is performed by simulating faults in the grid condition by generating fault values for voltage and current through the use of secondary injection test instruments. Depending on the programmed configuration of the relay, the test instrument can monitor binary outputs or the communication signals of the tested object. The test is performed by a protection relay specialist who must have profound knowledge of the power grid and protection relay operation. All test sequences are managed and monitored by the lay protection specialist, making him/her a key figure in terms of periodical testing of protection relays. Unlike in traditional substation topologies, information exchange on IEC 61850 based digital substation is completely performed on the Ethernet bus, hence the test tool differs significantly and introduces new possibilities. Traditional secondary test instruments are obsolete in a digital substation configuration, as all signals are simulated virtually. The simulated test values of current, voltage and binary states can be generated by newly developed IEC 61850 based simulator test sets or PC workstations connected only to the station communication network. Faulty current and voltages are simulated with a sampled value stream and the trip action in terms of GOOSE messages of the tested relay are monitored on the communication bus. The test approach in digital and traditional substations is the same, only the test medium is changed. Common test systems have been widely used by researchers to provide standardized test-beds for new algorithms, protection and control schemes as a way of independent verifications and test replications. First IEEE Test environment was introduced in 1991, and initially there were four test feeders used primarily to check accuracy of power flow analyses. There are no comparisons of the results of short circuit studies. For test purposes of this thesis, a modified version of the IEEE 123 Node Test Feeder was developed. To enable the use of simulated fault currents and voltages for protection relay testing purposes, the IEEE 123 Node Test Feeder was switched from the initial 60 Hz system to a 50 Hz system. Additional modifications include the elimination of stabilization transformer from the initial topology and adding additional generation units, which represent a more modern distribution grid with distributed energy resources. Although the foundation for a completely digital substation is prepared, the current state of technology is not. With still numerous technical challenges, and various intermediate steps and attempts there is still a lot of research and development to do in order to realize the digital substation. A laboratory testbed has been developed with traditional current and voltage operated protection relays and protection functions operated by sampled values according to IEC 61850-9-2 LTE. An extended mathematical model of the IEEE 123 Node Bus Test System has been developed to generate various fault current and voltage waveforms in order to test the digital representations in sampled values. With a large number of performed test sequences, a statistical analysis of the digital and analogue performance has been conducted. The traditional substation topology is gradually going to be replaced with the digital substation topology in accordance to the IEC 61850 group of standards. A digital communication bus which covers all substation levels will drastically change the way substations are designed, build, tested and maintained. A new approach in the way protection systems are tested and maintained, thus new knowledge, tools and software for analysis of communication systems may will be needed. Due to ever increasing complexity of protection and communication systems, the need for adaptive test software arises, which will make use of the potential of Substation Configuration Language and the transparent manufacturer independent data structure it consists. The thesis is organized as follows. The first chapter provides a basic introduction to the thesis with the background and motivation for the research work pointed out, as well as the initial research goals. It also shows the broader impact of the technology shift towards digital substation systems. The second chapter highlights the main communication mechanisms in digital substations with the focusing on the IEC 61850 group of standards and its supporting communication infrastructure. The third chapter shows the impacts of digitalization on the substation protection systems, with the focus on substation design challenges. The implications of design methods for all substation levels are described. The fourth chapter provides an overview of the substation protection system development trends in digital substations, including centralized protection and automation systems. A comparison of test methods for classical, hybrid and digital substation topologies is given, with the extended test possibilities of communication based testing described in detail. The fifth chapter describes existing IEEE mathematical models of distribution systems and its applications for conformance testing of protection, control and monitoring algorithms and systems. It shows the results of the extended mathematical distribution system model, and its potential application in digital substation test systems. The sixth chapter summarizes the benefits of communication based substation systems in terms of developments of new the test methods including remote system testing and automated protection function. The requirement for further research and development in terms of deeper system standardisation and harmonization of test methods and evaluation criteria is pointed out.