5 smart grid trends that will thrive in 2011

By Tom Ayers,
President and CEO of Tropos Networks

I don’t need a crystal ball to know that 2011 will be a big year for Tropos and our customers who are implementing smart grid projects. I wanted to share with you the 5 key trends I see developing in the smart grid market that I believe will expand in the coming year.

* Significant increase in number of utilities deploying distribution automation applications/devices.

Distribution Automation applications are proving to provide significant benefits to utilities by increasing power quality and reliability, and can be deployed without having to impact customers directly. I believe wireless is the most cost-effective way to scale to deliver connectivity to millions of distribution endpoint devices (capacitor banks, transformers, switches, etc.).

Any network for high-impact DA applications requires low latency (sub-20 millisecond) and high reliability (99.999 percent) characteristics, as well as providing visibility and management for communications to millions of devices across hundreds of square miles.

* Smart grid communications infrastructures are being architected as a network of networks.

As I talk with both customers and prospects about their smart grid communication requirements, it’s clear to me that smart grid communications are being architected as a network of networks comprised of multiple technologies.

For the distribution area, the technologies include: wireless mesh, point-to-point, point-to-multipoint, and in some remote locations, cellular. The precise mix will vary based on the planned applications and their requirements as well as the composition of the service territory (mix of urban, suburban and rural).

* Private networks will continue to dominate as the network of choice for smart grids.

The vast majority of utilities continue to express their preference for private networks for smart grid communications. We hear this directly from our customers and prospects but this is also apparent in responses from utilities which have posted formal, public filings with the FCC. The common reasons for preferring private networks are:

1) Reliability. By owning and controlling the network, utilities can select the level of reliability desired for each application. Utilities can achieve predictable performance levels and assign a priority level for each application without worrying about competing with public traffic from millions of cell phones, especially during the chaos of any local emergency.

2) Security for utility communications needs to include support for industry security standards for securing data — that’s just basic table stakes. Where private networks have a significant edge over public networks for security are in terms of reliability, survivability, and control. These attributes are important where critical infrastructure assets such as distributed utility assets are concerned.

3) Cost of Ownership for private networks is substantially less. Based on our analysis we estimate that the breakeven for public vs. private networks is just under 4 years where AMI backhaul is the first application deployed.

As additional applications are added such as distribution automation, the breakeven point is reduced. Our financial models took into account both CAPEX and OPEX. Bottom line — Many utilities have already concluded and understand the substantial value and ROI they can achieve by owning and operating their own network for smart grid communications.

* Smart grid distribution area networks (DANs) are being designed to aggregate communications for multiple smart grid applications.

As utilities move into deploying smart grids, building an end-to-end network for each application simply doesn’t make sense. A single DAN infrastructure that can be securely and reliably shared across multiple applications is far more cost-effective in terms of total cost of ownership.

By owning the network rather than leasing use, utilities have end-to-end visibility into network performance, as well as control over coverage and capacity.

* Mesh networks will continue to be a smart architectural choice for the smart grid.

There are different types of mesh network technologies commonly seen in smart grid deployments including 900 MHz meshes popular for metering LAN networks, as well as Tropos’ high performance mesh used for distribution area network communications. Mesh architectures are adaptive and self-healing, and provide the high levels of resilience and network reliability needed for utility communications networks.

I hope that you will carefully consider the significance of these 5 trends as they affect you, and I appreciate any feedback you may have.

As 2010 draws to a close, I am pleased to share with you that it has been an exciting year of growth for Tropos with many new smart grid customers selecting Tropos as their network of choice to support multiple applications including AMI, distribution automation, substation security, and many more. I look forward to continuing to work with these new customers and all our 800 plus customers in the coming year.

I sincerely wish you and your family a wonderful holiday season.

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5 smart grid trends that will thrive in 2011

By Tom Ayers,
President and CEO of Tropos Networks

I don’t need a crystal ball to know that 2011 will be a big year for Tropos and our customers who are implementing smart grid projects. I wanted to share with you the 5 key trends I see developing in the smart grid market that I believe will expand in the coming year.

* Significant increase in number of utilities deploying distribution automation applications/devices.

Distribution Automation applications are proving to provide significant benefits to utilities by increasing power quality and reliability, and can be deployed without having to impact customers directly. I believe wireless is the most cost-effective way to scale to deliver connectivity to millions of distribution endpoint devices (capacitor banks, transformers, switches, etc.).

Any network for high-impact DA applications requires low latency (sub-20 millisecond) and high reliability (99.999 percent) characteristics, as well as providing visibility and management for communications to millions of devices across hundreds of square miles.

* Smart grid communications infrastructures are being architected as a network of networks.

As I talk with both customers and prospects about their smart grid communication requirements, it’s clear to me that smart grid communications are being architected as a network of networks comprised of multiple technologies.

For the distribution area, the technologies include: wireless mesh, point-to-point, point-to-multipoint, and in some remote locations, cellular. The precise mix will vary based on the planned applications and their requirements as well as the composition of the service territory (mix of urban, suburban and rural).

* Private networks will continue to dominate as the network of choice for smart grids.

The vast majority of utilities continue to express their preference for private networks for smart grid communications. We hear this directly from our customers and prospects but this is also apparent in responses from utilities which have posted formal, public filings with the FCC. The common reasons for preferring private networks are:

1) Reliability. By owning and controlling the network, utilities can select the level of reliability desired for each application. Utilities can achieve predictable performance levels and assign a priority level for each application without worrying about competing with public traffic from millions of cell phones, especially during the chaos of any local emergency.

2) Security for utility communications needs to include support for industry security standards for securing data — that’s just basic table stakes. Where private networks have a significant edge over public networks for security are in terms of reliability, survivability, and control. These attributes are important where critical infrastructure assets such as distributed utility assets are concerned.

3) Cost of Ownership for private networks is substantially less. Based on our analysis we estimate that the breakeven for public vs. private networks is just under 4 years where AMI backhaul is the first application deployed.

As additional applications are added such as distribution automation, the breakeven point is reduced. Our financial models took into account both CAPEX and OPEX. Bottom line — Many utilities have already concluded and understand the substantial value and ROI they can achieve by owning and operating their own network for smart grid communications.

* Smart grid distribution area networks (DANs) are being designed to aggregate communications for multiple smart grid applications.

As utilities move into deploying smart grids, building an end-to-end network for each application simply doesn’t make sense. A single DAN infrastructure that can be securely and reliably shared across multiple applications is far more cost-effective in terms of total cost of ownership.

By owning the network rather than leasing use, utilities have end-to-end visibility into network performance, as well as control over coverage and capacity.

* Mesh networks will continue to be a smart architectural choice for the smart grid.

There are different types of mesh network technologies commonly seen in smart grid deployments including 900 MHz meshes popular for metering LAN networks, as well as Tropos’ high performance mesh used for distribution area network communications. Mesh architectures are adaptive and self-healing, and provide the high levels of resilience and network reliability needed for utility communications networks.

I hope that you will carefully consider the significance of these 5 trends as they affect you, and I appreciate any feedback you may have.

As 2010 draws to a close, I am pleased to share with you that it has been an exciting year of growth for Tropos with many new smart grid customers selecting Tropos as their network of choice to support multiple applications including AMI, distribution automation, substation security, and many more. I look forward to continuing to work with these new customers and all our 800 plus customers in the coming year.

I sincerely wish you and your family a wonderful holiday season.