The Smart Grid Debate: Public vs. Private Networks

John Horn, T-Mobile USA

According to the Microsoft Worldwide Utility Industry Survey 2010, only 8 percent of utilities around the world have completed their smart grid technology implementations while 37 percent have projects underway and more than half haven’t yet started.


Why the delay?


The hesitation surrounding the smart grid doesn’t focus on what the objective is and why it is necessary. There appears to be a consensus around the need to optimize power generation and delivery and agreement that the end goal is to help utilities achieve demand response, environmental and conservation goals and control unnecessary costs.

This future smart grid is envisioned to include thousands of endpoints potentially creating an avalanche of data—a way to allow users to connect directly with power suppliers via real-time, two-way digital communications technologies. Leveraging this data to create a more secure, reliable and efficient electric system represents both the greatest challenge and the greatest opportunity.

Today, with cost estimates upwards of $165 billion over two decades, the core of the tension is instead focused on expense, technology and return on investment. Dealing with all this data will require a robust, flexible telecommunications solution. Many believe there isn’t one single telecommunications technology solution to meet the requirement for a cost-efficient backhaul solution that addresses the needs of the entire utility enterprise.

So, which option is the right fit? The best solution or combination will depend on a variety of considerations including geographic, security and functional needs. However, in its most simple form, it often boils down to a single question: Public or private?


Public or Private Networks


Today, many cite that utility companies already function as their very own telecommunications providers, running large-scale wireless, wireline and fiber optic networks across their operations. Therefore, these pundits argue they will build them again for the smart grid effort once they are able to purchase as much as 30 MHz of spectrum, the amount many believe is necessary to make the smart grid possible.

However, private networks have significant challenges—from multi-decade amortization to an inability to keep up with the innovations being made in the telecommunications industry. Further, private networks are more vulnerable to security breaches or other threats than the more secure commercially managed networks.

While the investment in coverage, reliability and security is unmatched by what a utility provider could do on its own, the operating of public networks have traditionally limited their use in smart grid development, particularly in North America. In contrast, aggressive pricing plans have made the use of the public cellular networks as the backhaul of smart grid systems the norm in Europe.

Though private network advocates suggest they need pervasive fixed coverage (at least 1 megabit per second or Mbps), pervasive mobile coverage (at least 100 kilobits per second or kbps) and selective broadband coverage (10 Mbps) for all utility assets and customer locations, existing wireless coverage from most public networks extends to 95 percent of customer locations and is growing (see Figure 1, opposite). Public network proponents suggest it would be more cost effective to integrate a 5 percent solution with a 95 percent asset base than build 100 percent new to meet a 5 percent solution (see Figure 2, page 28).


Addressing the argument by private network supporters that they need communications service availability at least 99.99 percent and 99.999 percent where financially feasible, public network advocates state that AMI, demand response and distributed energy generation are fault-tolerant applications. Therefore, the cost of availability for these applications is hard to justify. Public carriers routinely design high-reliability networks for critical applications, such as sub-station automation, where the cost of additional redundancy can be justified. Further, For example, AMI, demand response and distribution grid management require modest throughput and could be readily accommodated by existing public networks.

What about communications latency? Private network advocates say they need communications latency of less than 800 miliseconds (ms) between utility communications centers and major assets. Public network defenders say that 2G wireless meets requirement with 600-800 ms of latency.


M2M technology


Machine-to-machine technology is used everywhere today—from water meters and security systems to asset tracking, point-of-sale and mobile healthcare. The Department of Energy says that M2M technology will help monitor the grid, increasing its reliability, efficiency and security. Utility companies can get instant feedback on problems with the grid, like transformer outages.

Many also believe that M2M technology will also help utilities shift between energy sources, allowing them to integrate renewable energy like wind and solar into electricity generated from coal-burning power plants. In addition, the technology can help consumers save money by adjusting thermostats and appliances up or down in relation to the variable cost of power.

Take as example an M2M-based advanced metering infrastructure consisting of a family of integrated electronic electricity meters accessed via a Web-based network operating system over an IP networking infrastructure. More than a simple AMI system focused on billing-related services, this system can enable the backbone of the smart grid, giving utility companies access to information about the status, operation and general health of the grid, which further allows them to reduce costs while increasing service quality.

Unlike systems with a dedicated, proprietary radio per metering point, multiple meters can share a single IP connection among all the meters on a given low-voltage transformer, driving down the per-point connection cost and eliminating the need for the utility to build a maintain a dedicated private wireless network for their meters. When used on a public network, one point per transformer could be equipped with an embedded SIM card, like those from T-Mobile USA, eliminating the need for the utility to build and maintain a private network for backhaul communications.

Further, by bringing the wide area network (WAN) connection point down to the neighborhood transformer, this architecture allows a utility to pinpoint problems in its network at a very precise location, eliminating cost and time affiliated with outage detection and improving customer service.


Shaking It Out


The smart grid revolution promises to deliver more secure, reliable, efficient and cost-effective power generation and delivery, but at what cost” literally? With cost estimates upwards of $165 billion over two decades, there is a focused concentration on which way to go: public or private networks?

Traditional build/buy analysis favors the public network with the limited capital investment for utility companies, rapid time to market, as well as reliability, resiliency, interoperability and scalability. Many existing public networks can meet the needs of the smart grid.

Further, with the addition of innovative M2M technologies and systems, utilities will have access to a wealth of information about the status, operation and health of the grid that enables them to reduce operating costs while increasing service quality.

John Horn is national director, M2M for T-Mobile USA.


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