Abstract: In view of the existing problem of smart substation’s relay protection, such as lower reliability and greater difficulty in operation and maintenance, a new scheme based on outdoor installation protection is introduced to promote the relia-bility and economic efficiency of the substation. Firstly, the idea of plug ＆ play and outdoor installation are demonstrated. Compared with the current substation architecture, the advantages of the new scheme are much greater safety and efficiency. Then both the single bay and multiple bay schemes are described. Some key technologies involved and challenges faced are treated. Furthermore, the variation of economic factors in substation’s entire life-cycle after application of the new scheme is also evaluated while pointing out the economic advantages in terms of design, construction and maintenance. Nowadays, plug ＆ play and outdoor installation protection is pilot running on the grid.