By Steven M. Brown, editor in chief
Broadband over power line (BPL) technology has matured rapidly over the last half-decade-from technology development, to trial deployments and now, in a select few locations, commercial deployments. The once-daunting challenge of sending data through-or around-the transformer has been solved, and, today, power distribution lines are set to compete with cable and DSL as a viable “third data pipe” into the home.
Not only are medium- and low-voltage power lines now being used to deliver broadband Internet to residential and commercial customers, utility companies are themselves finding that BPL can serve as a communications medium for a number of useful utility applications. At least one municipal utility has its BPL network set up to support outage notification, demand side management and automatic meter reading (AMR).
At this point, BPL’s technology questions have mostly been answered. And, an October 2004 FCC ruling addressed many of the regulatory concerns, effectively removing at least some of the questions utilities and others may have had about investing in BPL. Still, there remains in this age of “back to basics” utility management an unease among utilities about what role they will play as their distribution lines become on-ramps to the information superhighway.
If those concerns can be allayed and BPL allowed to flourish, it has been estimated that by 2012 between 10 million and 15 million homes could be accessing the Internet via BPL technology.
Getting Past the Transformer
While power lines have long been used to deliver low-speed data (think of the number of AMR systems that use “power line carrier,” or PLC, technology), high-speed data delivery over long distances is a relatively new development.
Since electric power and broadband data are transmitted at different frequencies, it has always been possible, theoretically, for the two to share the same wires. In practice, however, there have been obstacles. Chief among those obstacles has been the distribution transformer. Due to the frequency at which it is transmitted, data is obstructed or severely degraded by distribution transformers. One of the first challenges for BPL technology developers was to find a way for high-speed data and transformers to co-exist on the distribution system.
According to the EPRI report, “Broadband Over Powerline 2004: Technology and Prospects,” some vendors chose to go around the transformer, while others found a way through it. “Devices have been developed that enable the data to be moved between the medium- and low-voltage lines, avoiding the need to go through the transformer,” the report states. “Or wireless fidelity (wi-fi) can be used for data communication between the medium-voltage line and the premises. At least one supplier has also developed a system with the ability to get enough signal through the transformer to operate effectively.” Figure 1 illustrates the three methods of overcoming the transformer obstacle.
With most of the technical issues resolved, utilities have been fairly aggressive about testing BPL. The Shpigler Group of Nyack, N.Y., has reported that, since 2002, BPL has progressed from a handful of trials to nearly 100 trials and early-stage commercial deployments in North America, with some of those deployments involving commitments to serve thousands of users. Among the more mature and widely publicized of those deployments are those at Consolidated Edison of New York, Cinergy in Cincinnati and the City of Manassas in Virginia.
Consolidated Edison has been working with BPL vendor Ambient Corp. since 2002 on a pilot BPL installation. The initial installation provided high-speed Internet service to several customers, including a local police station. In the early stages of that pilot, a BPL-equipped “traffic cam” was also installed to provide continuous real-time monitoring of traffic flow.
More recently, in early March 2005, Ambient announced it had activated BPL in a high-rise residential building in Manhattan. In that installation, two T1 lines act as a backhaul connection to the building, and the low-voltage lines within the building deliver high-speed access throughout the 16-story, 213-unit structure.
One of the most widely publicized BPL deployments, and one of the only commercial deployments to date, has taken place in Cinergy’s electric utility territory.
Cinergy formed a joint venture with Current Communications in spring 2004 to roll out BPL services to customers under the Current Communications brand. Current manages the venture, which builds and operates the BPL network and provides marketing, customer support and back-office functionality. The BPL network is deployed on Cinergy’s distribution infrastructure using BPL equipment and technology from Current’s subsidiary, Current Technologies.
Although Cinergy would not release specific enrollment numbers for the commercial BPL offering, they did report information from surveys conducted during the pilot project in Cincinnati’s Hyde Park area. According to surveys, 95 percent of customers in the pilot project were satisfied with the BPL service, 93 percent were willing to recommend the BPL product and 75 percent expressed interested in obtaining the commercial product when it became available. More than 50 percent of customers switched from cable or DSL Internet access to take part in the BPL pilot project.
Cinergy Broadband and Current Communications Group have also formed a joint venture called ACcess Broadband that leverages the knowledge gained from the Cincinnati deployment and aims to market BPL technology to municipal utilities and rural electric co-ops. The municipal and rural electric markets represent more than 25 million potential customer accounts for BPL, according to information from ACcess Broadband.
One municipal utility that’s been at the forefront of using BPL not only for its customers’ high-speed Internet needs, but also for its own operational purposes is the City of Manassas, Va.
Manassas is home to the first city-wide BPL system in the United States. Communication Technologies Inc. (COMTek) owns and operates Manassas’ BPL network and acts as the Internet service provider (ISP) for residents who sign up for the service. Field technicians employed by the city install couplers and repeaters and maintain the connections that enable COMTek to deliver BPL service. In exchange, the city receives a portion of the revenue from COMTek’s BPL subscriber fees.
Besides offering high-speed Internet to customers, the BPL network in Manassas also serves several operational purposes. The city is able to use its BPL system for transformer and customer-level outage notification, demand-side management, AMR, security video surveillance and traffic signal automation.
BPL is a communications technology many believe is tailor-made for a number of utility applications, including AMR, feeder monitoring, video monitoring (an especially attractive application in the municipal utility market), transformer monitoring, power quality monitoring, outage detection, fault location, dynamic pricing communication to customers, and, potentially, as a communications network for field technicians and other utility employees who would benefit from a broadband wireless network.
Matt Oja is one of a number of utility industry BPL experts who says it’s BPL’s operational value that will help the technology spread its roots. Oja is formerly director of emerging technologies for Progress Energy, a utility that has conducted its own technical and market trials for BPL, and is currently vice president and general manager of IdaComm, a sister company of Idaho Power providing BPL solutions for utility companies.
Oja said that two years ago, the principal interest in BPL was on the revenue side, delivering broadband Internet access to commercial and residential customers. “That worm turned less than a year ago when the industry recognized that if we’re going to be putting this technology on the distribution lines, the distribution side of the utility really needed to have a much stronger vesting in the benefits of BPL.”
Building the BPL Business Case
With the technical questions surrounding BPL mostly answered, utilities have turned their attention to building the business case for BPL, which may prove the stickiest wicket of all.
“Almost nobody asks whether the technology works,” Oja said. “It does. It works quite well and is getting better. The real questions have to do with integrating BPL into the fundamental utility business strategy and the financial benefits of doing so.”
Utilities have generally looked at three different business models for BPL: a retail model, in which the utility itself acts as the service provider; a wholesale or developer model, in which the utility builds and operates the network but provides access to an ISP to serve end customers; and the landlord model, in which the utility allows access to the network, and an ISP or BPL network provider does the rest.
Rick Schmidt, vice president of utility system communications for Power System Engineering Inc., said that most of the utility BPL deployments thus far have followed a non-retail model, opting instead for a wholesale or landlord model-or some combination of the two.
Oja agreed that the non-retail BPL model will likely be the most appealing to utilities going forward.
“Utilities typically have very high customer satisfaction ratings. They don’t want to screw that up by doing this all by themselves,” Oja said. “If there’s a new business venture like BPL, they want to make sure it will improve and not sully their reputation.
“Utilities are going to be partners in these ventures,” Oja continued. “They’re not going to be putting up all their money at risk. In 2005, I think you’ll see a couple more deals like what Cinergy has done with Current. It think that’s going to happen in a more prevalent way.”
Still, selling a utility board of directors on the idea of BPL investment-even using the most hands-off business model-may prove difficult, especially with the sting of the late-’90s dot-com bubble burst still not fully subsided. That is why utilities are increasingly looking not at BPL’s revenue-side benefits, but at its operational benefits.
“The idea of going to your board and asking to borrow X million for a revenue opportunity to compete with established ISPs, that’s a tough one to approve,” Schmidt said. “So utilities are focusing internally. They’re focusing fairly heavily on using BPL for their own internal automation applications. If you can get those applications rolling forward, it will set up the commercial aspects.”
Schmidt said that if utilities can find a way to justify BPL on the basis of cost-effectively running utility automation applications, “The revenue generation almost becomes the icing on the cake.”
Outlook for BPL’s Future
Once utilities work out the business case for BPL, it appears to be a technology with a bright future-both for BPL equipment vendors and for whoever ends up delivering the service to customers.
According to its report “Developments in Broadband over Power Line” released in August 2004, The Shpigler Group forecasts a ramp-up to a $2.5 billion worldwide market for equipment in the next five years, with a long-term outlook of serving more than 14 million customers in the United States by 2013 (see Figure 2). Energy Info Source puts forth an even more optimistic prediction in its report, “The Market for Broadband over Powerline,” saying that almost 15.5 million U.S. homes will have their high-speed Internet access provided via BPL technology by 2012.
Oja, who was involved in Progress Energy’s BPL trials and who recently went to work for IDACOMM, which is itself involved in BPL field tests, also is optimistic about BPL’s future.
“We were pleasantly surprised at how many people in our trials were switchers,” Oja said. “They were existing cable modem customers who switched to us. They didn’t get it for free; they had to pay for it. They were willing to drop their incumbent because they thought they could get a better deal and better service through us.”
That same willingness to switch from cable or DSL was also evident in Cinergy’s BPL pilot.
But, both Oja and Schmidt note that it’s the utility applications of BPL that will initially help along the business case. Schmidt said he believes one of the last remaining gaps in the industry is found in the utility automation vendors hesitancy to develop products around BPL.
“What is really needed is for vendors to step up and realize that BPL could be very beneficial to their respective businesses,” he said. “Doing things like building in a wi-fi modem directly into your product to interface with the BPL network would be a logical thing to do, but there’s not a lot of that going on. They’re just now migrating to Ethernet.”
Schmidt said it will take time for BPL to move from the realm of communications media to application, noting that narrow-band PLC AMR vendors like Hunt Technologies and DCSI have an end-to-end service they’ve been working on for almost two decades.
“There’s just now starting to be application development for BPL,” he said. “The focus initially has been to see how much data you can send down the lines with the least amount of errors.”
Once vendors begin building BPL interfaces into their products, Schmidt believes BPL will have a much easier time taking hold as a third data pipe into the home. In turn, the presence of an additional broadband provider to compete against the cable and telephone companies could have an impact on expanding service offerings and lowering prices.
Once that happens, it might not be long before many of us may find ourselves using our home’s power outlets for more than just power.à¯£à¯£
A Sampling of BPL Vendors
Note: This is not meant to be an all-inclusive list. As with any nascent technology, new players are entering the market-and failed businesses leaving-at a relatively high rate.
A joint venture formed by Cinergy Broadband, an affiliate of Cinergy Corp., and Current Communications Group to market BPL technology to municipal utilities and rural electric cooperatives.
Known for its work implementing BPL trials with Consolidated Edison in New York metro area. Counts national ISP EarthLink as a partner.
Customers include American Electric Power, PPL, Progress Energy, Southern Company and IDACOMM (a sister company to Idaho Power).
Communication Technologies Inc. (COMTek)
In fall 2004, announced commercial implementation of BPL applications for utilities, including transformer and customer-level outage notification, demand-side management, automated meter reading, security video surveillance and traffic signal automation, on its commercial BPL network in Manassas, Va..
Working with Cinergy on one of its commercial deployment of BPL technology in Cincinnati.
Gridstream Technologies Inc. (formerly PowerComm Systems)
Notable: Piloting BPL with Chelan County PUD in Washington and New Horizon Electric Cooperative in South Carolina.
Has deployments with Central Virginia Electric Coop, South Central Indiana REMC and Cullman Electric Coop. (Alabama).
Most widely deployed BPL vendor in the world with more than 60 deployments involving 40 utilities in more than 15 countries.
PowerWAN’s technology will be used to provide broadband voice and data services to approximately 400,000 residences and businesses in the Chinese provinces of Sichuan and Jiangsu.