Demystifying Satellite for the Smart Grid: Four Common Misconceptions

By Christian Bergan, iDirect

Today, utility companies are making significant progress in developing a next-generation communications network capable of supporting the smart grid. But many utility companies still struggle with how to affordably and reliably extend this communications network to 100 percent of their service territory, especially to remote substations and customer locations that are beyond the reach of primary networks.

While an IP-based satellite platform can provide utilities with the real-time data exchange, operational visibility and broadband reach required for a smart grid communications system, there are several common misconceptions about the reliability, latency, cost and security that satellite provides.

The reality is that since its humble beginnings as a one-way distribution mechanism used primarily for back-up systems and consumer television service, satellite communications has undergone a major transformation.

Today’s satellite networks have advanced to become two-way, enterprise-class platforms that provide terrestrial-like broadband connectivity. They are high-speed communications systems that are built on IP and integrate seamlessly with core communications technology. No longer hampered by early latency or reliability issues, satellite is a cost-effective and secure solution that can provide backup communications and easily support core smart grid applications like SCADA, telemetry, AMI backhaul and distribution automation.


  • Myth: Satellite does not provide the necessary reliability/availability utilities need to run core applications.
  • Reality: Technological advancements have made satellite highly reliable and capable of providing up to 99 percent availability.

As utilities build out the smart grid and extend broadband connectivity to remote locations, they need a communications solution with comparable reliability to a fiber-based network that’s capable of handling critical applications such as SCADA without missing a beat.

Satellite has evolved into a highly reliable platform, in part due to the arrival of the second-generation digital video broadcasting standard (DVB-S2) in combination with adaptive coding and modulation (ACM). With these advancements, outbound throughput performance is guaranteed even during inclement weather.

On the return path, the satellite industry has seen improvements made to demodulators and the incorporation of a significant new inbound coding technology, 2D 16-state forward error correction (FEC), which also protects link availability during rain fade and further enhances throughput.

Unlike other communications technologies, satellite is a private network, which inherently makes it more reliable. At the same time, IP-satellite platforms utilize time division multiple access (TDMA) technology to efficiently share capacity across different locations within an organization. The establishment of quality of service (QoS) guarantees based on application, remote site and sub-network, preserves reliability by protecting critical applications against congestion.

When choosing a satellite platform, it’s important that utilities consider built-in features that can help them efficiently manage bandwidth and configure and prioritize traffic. One such feature that’s offered by some satellite platforms is Group QoS (GQoS). When combined with the ACM capability of DVB-S2, Group QoS allows utilities to specify committed information rates (CIRs) for different geographies and applications based on the service level required during inclement weather. GQoS qualifiers can also mirror the throughput characteristics of single channel per carrier technology, effectively creating a dedicated outbound link for bandwidth intensive, constant applications.


  • Myth: Satellite’s latency is too high to support core smart grid applications such as SCADA.
  • Reality: While satellite is slightly more latent than terrestrial broadband, the difference is only a few hundred milliseconds. The latency of an IP satellite broadband platform is still low enough to meet the requirements of nearly every core utility and energy application.

Developing a smart grid requires precise monitoring of energy supply and demand patterns as well as real-time fault detection in distribution networks, no matter the location. Several operational applications, therefore, require a timely response message from equipment assets.

Since all communications systems, even terrestrial, have some degree of inherent latency, as packet transport is not instantaneous, this delay must be accounted for as applications are designed. While terrestrial latency is a minimal 200ms or less, satellite’s latency, approximately 600ms-700ms mark, is suitable for nearly every utility application, including SCADA, substation automation, distribution automation, AMI, voice and video.

Due to advancements in IP satellite technology, each control message or alarm can be delivered within a guaranteed time frame. Specifically, a methodology called deterministic TDMA (d-TDMA) designates bandwidth per remote site based on an established time limit. And iDirect’s GQoS allows for applications like video surveillance and VoIP to run without interrupting the deterministic bandwidth allocated for SCADA.

To further optimize real-time applications, like voice, which can be detrimentally affected by delay, utilities can take advantage of real-time traffic management and optimization features that some of today’s satellite platforms provide. These features can reduce jitter by evenly spacing time slots across a shared platform and enable the system to interrupt large data frames to prioritize voice traffic. As a result, utilities can ensure toll-quality digital telephony over a cost-effective shared medium.


  • Myth: Deploying satellite is cost prohibitive.
  • Reality: Satellite offers flexible options for utilities to own, manage and deploy networks with low upfront capital investment and minimal operational expenses.

IP satellite platforms extend high-speed broadband and advanced communications applications to the most remote locations. For utilities, this means reaching the furthest points on the grid in a more cost-effective way than other core network technologies.

Several satellite options offer flexibility related to up-front capital expenditures. For some utilities, owning and operating their own virtual private network (VPN) may be the best option for security reasons or performance control. In this scenario, the utility is responsible for purchasing and implementing the satellite infrastructure, including a hub, line cards and remotes.

For utilities looking to reduce upfront capital expenditure, some satellite solutions offer a cost-effective option called a virtual network operator (VNO) model. As a VNO, a utility company still buys and manages satellite equipment, including remotes and line cards, and is able to maintain control and visibility over the performance and security of its own closed network. However, with a VNO model, the utility doesn’t have to invest in a satellite hub or teleport infrastructure, since they co-locate capacity in an existing hub hosted by a satellite service provider.

Alternatively, for even lower capital expense, a utility could fully outsource its satellite capacity, allowing a service provider to configure and manage the network at an operational expense that’s competitive with monthly cellular costs.

Whether a utility chooses to own or outsource capacity, it can leverage a network management systems (NMS) to configure, monitor, control and, in some cases, automate components of its satellite network. NMS tools allow the satellite network to be managed from a central location, and some satellite solutions offer real-time and historical statistics to provide a deeper view into network performance and alert utilities to potential issues before they occur.


  • Myth: Satellite isn’t as secure as other technologies such as fiber and therefore isn’t adequate to protect the smart grid.
  • Reality: Satellite is a highly secure technology that supports private networks, AES encryption and provides enhanced security features.

As utility systems become more reliant on an always-on broadband connection, security can be a concern. New industry regulations, including NERC-CIP standards, and the ability to centrally access substations are two of the drivers for more stringent protections against intrusion, while emerging applications like smart metering are making data security paramount.

A satellite platform configured as a closed VPN is inherently secure. Adding support for concurrent two-way AES 256-bit link encryption makes packet transmission via satellite just as secure as other communication technologies, including terrestrial and wireless.

Creation of a virtual local area network (VLAN) allows users in a broadcast domain to be grouped together logically and not physically. They do not have to be in the same location. Satellite support for VLAN tagging provides the security needed to segregate traffic by these defined groupings on a shared infrastructure. Permission is required for access. Additionally, the NMS must authorize satellite devices before they can operate on the network, which guards against outside attacks and makes IP-satellite more secure than WiFi.

To provide even higher levels of security, some satellite systems offer features like frequency hopping and tunnel-mode IPsec that make it more difficult to eavesdrop or intercept data over the network. The former allows remotes to switch in route channels based on traffic, while the latter creates an encrypted point-to-point tunnel between substations and the control center.

Christian Bergan is director of the energy and utility markets at iDirect, a manufacturer of satellite communications technology. Bergan is responsible for the market strategy and works closely with iDirect’s global network of service providers to promote the value of VSAT technology throughout the industry.

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