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This thesis is motivated by the decarbonization and digitalization twin transitions affecting electrical power systems. In this context, as the backbone of power systems, electrical substations are undergoing a fundamental transformation where digital virtualization technologies play an important role. The dissertation investigates the application of virtualization technologies in digital substations, with a focus on virtualized Intelligent Electronic Devices (vIEDs) and their integration into power system design and operations. The work is structured around four axes: defining the technology concepts, justifying their relevance for digital power substations, implementing and validating them effectively, and understanding their cybersecurity and economic implications