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Creating a Communications Platform for the Smart Grid

Venture capitalists were calling 2009 "The Year of the Smart Grid." It was definitely a busy year. Looking ahead, we believe 2010 will be "The Year of Smart Grid Collaboration." And to help facilitate that vision, we believe it is time to create a common communications platform for the power grid, just as the Internet relies on the TCP/IP standard. In fact, it may be due to that common standard that the Internet became the world's most populated network in less than 20 years, surpassing the century-old power grid.

The urgent need for such a common communications platform for the smart grid is underscored by the fact that the American Recovery and Reinvestment Act of 2009 earmarked $3.4 billion to build 100 smart grid projects.

However, according to Dr. Aaron Snyder, principal consultant at Enernex, an electrical power engineering and consulting firm, "If utilities spend that money on proprietary technology, they may have to replace it in a few years. The vision of an interoperable, plug-and-play power grid cannot come to pass if each of the country's 3,000 utilities is in its own incompatible island of non-compliant technology."

The industry is at one of those historic strategic inflection points which is, according to former Intel CEO Andy Grove in his book Only the Paranoid Survive, "... a time in the life of a business (or industry) when its fundamentals are about to change. The change can mean an opportunity to rise to new heights."

The questions before us are: How will we make it work; Will solutions today be obstacles in the future; Will solutions be cost effective for the utility?

The Challenge: Silos of communication have prevented broad smart grid deployment across geographies, utilities, and vendor solutions.

As shown in Figure 1, the average vertically integrated utility has three distinct segments that are part of the smart grid: transmission, distribution, and consumer. Unfortunately, there are many different types of devices spread out over these segments which are either not connected or connected using proprietary technology.

Figure 1

In Figure 1, Nodes A and B represent different types of infrastructure for communicating between devices and the utility back-office. Nodes C and D represent different types of infrastructure within the consumer segment, since there is rarely a single technology that allows a utility to provide smart metering and demand response through its entire service territory. In fact, providing the new Advanced Metering Infrastructure (AMI) to the entire customer base requires a hybrid of technologies.

As a result, utilities today are faced with a heterogeneous smart grid infrastructure utilizing proprietary connection points. This type of closed infrastructure (which we call "silos of communication") mean that if utilities lock themselves in with today's measure of bandwidth, security and reliability, they increase the risk of obsolescence and therefore constraints in their future functionality.

The Solution: A Single, Universal Smart Grid Communications Platform

We surveyed our 120 utility customers and came up with this picture of what utilities want and where they need to be. Figure 2 shows what a smart grid communications platform should look like. It provides a homogeneous, standards-based infrastructure which allows utilities to reduce their maintenance costs and ensure interoperability with a multitude of devices.

Figure 2

Note that Nodes A, B, C and D from Figure 1 have been replaced by a uniform communication platform we now designate as Node N.

And further: Field Replacement Units, Extensibility, and Increased Bandwidth.

Something else utilities want is the ability to upgrade their smart grid communications infrastructure in the field without replacing it.

You will see on the left of Figure 3 what happens if one of the communication technologies becomes obsolete (the red arrow with an X through it) because it reaches end-of-life or no longer supports newer requirements. In the consumer market, for example, most one-way Automated Meter Reading (AMR) technology doesn't even support the new requirements of the smart grid.

Figure 3

This ability to do field upgrades lets utilities change-out obsolete technology and replace it with a newer or more advantageous technology (the orange arrow on the right) without replacing the entire infrastructure. Hence, the utility mitigates the risk of obsolescence in its existing infrastructure. And because they use the same communication platform, they experience limited hardware, installation, and training costs. This absolutely minimizes the cost to upgrade their communications over time.

In fact, one of SmartSynch's utility customers intends to use the field replacement capability to provide redundant communication paths. They plan to have one communication path for smart grid data, and a separate communication path for workforce automation which can double as a second path for smart grid data if necessary.

But what happens if, after deployment, a utility wants to take advantage of newer technologies that come along, like WiMax or LTE (Long Term Evolution)? With a proprietary system, the utility is stuck with what it has.

So along with the ability to make field replacement of units, utilities also want extensibility; that is, the ability to adopt new technologies as they inevitably come along, and take advantage of the improved bandwidth, security, reliability, and cost of these newer technologies.

Finding a migration path to support increased functionality and applications over time are some of the most difficult challenges that our utility customers told us about as they look to implement smart grid solutions.

Future-proof Communications Platform for the Smart Grid

Some years ago, we discussed smart metering and distribution automation solutions with a top 10 U.S. utility, and the same idea kept coming up: what if we had a common platform to connect to multiple devices over multiple networks? At the time, there was nothing even close to that on the market. As new technologies are released or become fiscally viable, utilities need to be able to take advantage of improved functionality, bandwidth, security, reliability and costs with a universal communications platform for the smart grid.

We don't know what the next "killer app" for the smart grid will be, but we do know two things: it will come, and it will require more data. An open, standards-based solution that enables interoperability between software, networks, and devices is essential for the development and success of smart grid rollouts. Such a network can be configured to meet a utility's current communication needs and expanded later to meet their future needs: the known as well as the unknown.

We believe it's essential to connect the silos of communication that have prevented broad smart grid deployments across geographies, utilities, and vendor solutions. A universal communications platform -- allowing any utility asset to communicate with another asset on any network, regardless of the technology vendor -- will spur the proliferation of connectivity between machines and people and ultimately allow utilities to connect with their field assets and their customers to benefit utilities, their customers and the environment.

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Throughout the time I was reading your article, the single though which kept occurring to me was "Electrical, gas and water supply utilities are NOT in the communications business. They should be outsourcing their communications requirements to companies who are". It is clear to me that no physical material supply utility will ever be able to develop the sort of communications expertise which is a natural baseline starting point for a large wireless, POTS, or internet communications company. The issues to be dealt with, and the expertise to deal with them are far beyond the realm that any utility can justify developing, so deciding to keep this silo in-house is a decision to forever operate with sub-standard communications infrastructure.

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Even if the utility industry acknowledges that they badly need universal communications platforms with open standards, there will be massive costs to replace all the legacy proprietary systems already in the field. Advanced Metering Infrastructure alone is already deployed to millions of customers, and virtually all of it is proprietary communications network based.

Under our current regulatory regimes, the North American utility industry will need either massive rate hikes or massive government handouts to pay for adopting common communications platforms; unless they are allowed to raise money in other ways over and above rate-base income. The latter would require regulatory reforms which are not even on the radar screens of our policymakers.

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