The Power Play of IP in the Smart Grid Arena


Rich Creegan, Itron

Not long ago, Internet protocol (IP) was synonymous with the World Wide Web, and its application was not as far reaching as it is today. In recent years, however, IP became widely used in not only the home, but by businesses as well. The banking and healthcare industries, for example, have processed financial and medical transactions using secure IP connections for a few years. Now, utilities are embracing the same technology to bring about one of the greatest shifts in the industry–the smart grid.

As the utility industry moves toward its most significant transformation–propelled by the convergence of operational and information technologies–and as advanced metering networks evolve to include smart communications that encompass routers, smart meters, distribution devices, in-home displays, smart appliances and electric vehicles, native IP services are increasingly appealing to vendors and utilities, large and small. With smart grid emergence and multi-tiered communication network evolution, this multi-service architecture is best supported by full IP implementation to transparently interact with upstream business and operational applications. The allure of a non-propriety way to transport data and commands to and from disparate devices in the field has even the most conventional utility heading down the IP path.

Today, a critical challenge facing the utility industry is the ability to merge a robust data communications platform with the power grid. Such a union will afford utilities the opportunity to make informed, real-time or near real-time decisions, and collect and analyze data about assets on the grid. Ultimately, the smart grid delivers an integrated platform for embedded intelligence that supports dynamic grid operations, such as renewable energy and consumer control with the goal of managing energy more efficiently.

Seamlessly connecting multiple networks is essential to understanding power delivery and better managing it so that resources are allocated appropriately to meet demand, as well as to promote the efficient use of existing transmission, distribution and generation infrastructure. A network that can connect hundreds, thousands or millions of devices and readily exchange data both securely and reliably requires common standards that provide for interoperability within a smart grid. At the core network layer, IPv6 is a standard that can deliver these desired capabilities on a large scale.

Understanding the key benefits of IPv6 can help demystify this issue and answer to the question: Does IP genuinely deserve to be the predominant communication mechanism for the smart grid?

Smart grid communications have typically been constrained by a mix of proprietary, vendor-specific technologies, often leveraging only IP addressing. With implementation of a complete suite of native IP services, a comprehensive network communication standard can bring true interoperability to smart grid, which technology companies and utilities have envisioned. Interoperability is one of the four main tenets of an open and successful grid, along with security, scalability and cost of ownership reduction.


To harness smart grid’s full potential, interoperability is vital. No single technology vendor can source every component of a smart grid initiative, nor can one physical communications network meet the needs of every utility. To ensure that multi-vendor products work properly together across multiple environments, standard protocols–such as IPv6–provide the common language in which devices speak to each other. A standards-based communication infrastructure optimizes existing assets and provides a migration path for new initiatives, fostering an open environment for easy integration with existing and future third-party applications. Standards also allow utilities to take advantage of broader industry best practices to harmonize the technologies and drive down ownership costs.


Opening up the historically closed, proprietary power grid with networked communications could be a bit unsettling for the utility industry. Protecting data integrity and consumer privacy from malicious hackers or even terrorists is a primary concern. In IPv6, network security is tightly integrated into the overall architecture. In addition, through the adoption of security standards, such as the National Institute of Standards and Technology (NIST) and the North American Electric Reliability Corp. (NERC), utilities can rest assured that potential security breaches have been examined and addressed by experts. Additional IP security standards such as IP SEC are used to protect data flows between interface points, and standards must be met at all times as data is passed throughout the utility network.


In recent years, IP has proven capable of supporting new applications as they are developed, as well as evolving to meet the changing networking needs without altering its core design. As a utility grows, an open, standards-based network must be able to serve large and small–and everything in between. Plus, as utilities incorporate smart technology, they must be able to do so in incremental steps, without fear of stranding assets along the way. IPv6 provides the flexibility to adopt new applications or increase the number of networked devices without impacting the data transport reliability.

Cost of Ownership Reduction

Smart grid projects require significant capital investments, therefore when implementing a new solution cost is understandably a primary concern. Migration and maintenance spending must remain reasonable to achieve a return-on-investment that makes moving to smart grid a sound business decision. With an open-standards approach, utilities can choose from a variety of best-in-breed vendors to select the products that are right for them, at a price that is right–without worrying about how to integrate them into the network.

When considering the four core components of a successful smart grid strategy alongside the smart grid goals of providing near real-time data, efficient energy management and consumer control and engagement, the necessity for standards-based networking becomes clear.

Smart grid’s benefits are built upon the foundation of an open communication protocol that can deliver critical data and commands seamlessly and securely, while providing a platform for empowering consumers. The high quality of service for which IP is known can be extended from immediate use today to meet the future generations’ demands.

As the utility industry moves toward adopting standards and investing in products from various sources, IP clearly delivers secure, cost-effective, reliable, scalable and proven network communications. IP is positioned as the communication protocol of choice for utilities and smart grid. It is dramatically shifting the landscape of the utility industry’s communication structure toward a truly open and interoperable grid.

Rich Creegan is vice president of strategy and marketing at Itron.

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