Exploiting Broadband Over Power Lines

Broadband over power lines (BPL) and power line communications (PLC) are sets
of equipment, software and management services that when overlaid on the electric
grid provide users with communication means over existing “power lines” (cables
transmitting electricity). In the U.S., the two terms are used to differentiate
broadband versus narrowband communications. In other parts of the world, PLC
is often used to mean the underlying communications technology and is used to
represent both broadband and narrowband communications.

Utility companies have used their power lines for communications and control
for more than 30 years. Applications have included automated meter reading and
monitoring and control of grid operations. These applications require a very
limited bandwidth, as the data transfer rates are small and communications speeds
have been very slow.

In the early 1990s, several companies, mainly in Europe, began to research
PLC technology and high bandwidth signals. Research continued throughout the
1990s as the technology matured and trials conducted. Commercial deployments
are now actively taking place globally, and the United States is somewhat behind
Europe in BPL deployment.

The new technologies operate in the 1-to-30 MHz range. The current technology
delivers 45 Mbps and it is anticipated that the next generation will deliver
200 Mbps to the transformer. Capacity on the low-voltage network between individual
homes is shared. Integrators are engineering their networks to provide 25 Mbps
on average per home passed. Data transmission rates are symmetrical, so download
and upload speeds are equivalent, unlike the asymmetrical digital subscriber
line service.

The Alternative Broadband

BPL technology offers an alternative means of providing high-speed Internet
access, voice over Internet protocol (VoIP), video on demand (VOD) and other
broadband services, using medium- and low-voltage lines to access homes and
businesses. BPL’s technical feasibility has been demonstrated in more than a
dozen field tests, and BPL as a business is being tested for the first time
in Manassas, Va., and Cincinnati, where BPL networks are being assembled to
reach thousands of customers.

IBM is working with a large provider in Texas to conduct a pilot of BPL technology
in that utility’s territory. In addition, IBM is testing VoIP, VOD and “utility
side applications” such as auto turn-on-turn-off, BPLenabled AMR meters and
others in its BPL lab. The City of Manassas Electric Department is making BPL
available to the city’s 35,000 residents. In Cincinnati, Cinergy’s Current Broadband
is creating a network that will extend to 260,000 customers. PPL Telcom is also
deploying an “advanced market trial,” which is relatively large in scope, with
a network that has passed about 16,000 homes, 1,200 of them already having subscribed
as of September 2004.

As a means of high-speed Internet access, BPL has a number of appealing features,
including transmission speeds that can be higher than cable and DSL. With BPL,
both uplink and downlink speeds are equally fast, making it a better option
when compared to the slower uplink speeds of cable and DSL.

BPL also offers electric utilities a high-value communications network that
can enhance the power delivery system. BPL can help utilities with activities
such as automated outage detection and restoration confirmation, remote capability
to connect and disconnect electricity service and more efficient demand-side
management programs via automated meter reading. One of the biggest benefits
of BPL for utilities is in providing an intelligent grid.

BPL technology has received endorsements from Federal Energy Regulatory Commission
Chairman Pat Wood and former Federal Communications Commission Chairman Michael
Powell. Given that the technology can function through virtually any electrical
outlet, BPL has the potential to provide a third alternative broadband option
with ubiquitous service to all Americans at affordable rates. In fact, the FCC
says that about 15 percent of all homes capable of getting high-speed Internet
have chosen to buy the service. That’s about 6.2 million residences that have
opted to pay $40 a month, versus about $20 for dial-up service. The FCC is also
actively working to reduce any concerns between the HAM radio operators and
utilities deploying BPL.

How Does It Work?

In the BPL basic architecture, signals are injected into the electric grid
from a head end on the medium- or low-voltage lines at a substation. To back
haul the signal to the head end from the substation, fiber or wireless connections
are used. The signals traverse the grid network over medium- and low-voltage
lines to the home or business of the end user. Links between the medium- and
low-voltage lines are facilitated by channeling signals either through the transformers
or by bypassing the transformer via bridges.

In order to reach the end users, there are two alternatives that can be used.
Vendors such as Amperion provide interconnect with end users via wireless connections
at the transformer. It must be a WiFi (802.11b for now) connection at two points:
at a service injection point for medium voltage (12/23 kV) line, and at the
customer drop. Repeaters and extractors along the line boost the signal and
provide customer access via WiFi. Linemounted extractors can be powered through
induction (requires >70A line) and have an internal WiFi antenna. Pole-mounted
and enclosure-mounted (for areas with underground wires) installations require
a transformer and external antenna. One clever touch is an antenna hidden inside
a light pole. The solution uses off-the-shelf WiFi equipment as CPE. Others,
such as Mitsubishi, offer wire line connections, where users can plug a BPL
modem into any electrical outlet. They then connect their PC to the BPL modem
with an Ethernet or USB cable to finish the connection. The process is similar
to that required by users to connect to a cable-based Internet service. BPL
is able to transport data, voice and video at broadband speeds for end-user
customer connections.

There are numerous BPL vendors in the marketplace, and the leading U.S. vendors
in terms of installs are Amperion, Ambient, Current Technologies and Main.net
(see Table 1).

In addition, Mitsubishi Electric has several installations in the U.S. and
uses a bridging technology to bypass the transformer. It is the largest company
in the BPL equipment market, with a global reach, and it bears watching as the
market develops.

There is a wide range of energy companies in the U.S. that have shown interest
in BPL or are currently using BPL on a trial basis. Cinergy is the first to
go commercial. At least four other major U.S. utility companies have decided
to go commercial in 2005. These utility companies represent close to 10 million
potential BPL customers.

There are two sets of applications that are enabled through the use of BPL.
They are “revenue-side” and “utility-side” applications. The basic revenue side
applications are Internet service, VoIP services and video services. This is
commonly called the “triple play.” There is a wide range of utility-side applications
enabled through BPL. The utility companies that are using BPL on a trial basis
are coming up with new applications all the time. Utility applications cover
system monitoring and customer-facing applications such as AMR (automated meter
reading), demand-side management, load shedding and others.

BPL Risks

Managing risk is arguably one of the greatest challenges companies face in
harnessing the rewards of new technologies such as BPL. Their ability to understand
and manage operational, business and technical risks is crucial to protect brand
image, develop customer confidence, increase market penetration and achieve
long-term success.

Operationally, BPL is an overlay, not a grid element. There are no physical
electrical path changes. The technology cannot disable the grid. Installation
can be completed by contract personnel or by utility field crews, and crew availability
can have an impact on deployment schedules.

From a business perspective, implementing BPL is often seen as a foreign and
risky concept to utility companies (those burned in the Internet bubble can
attest to this). Expertise is required in broadband network deployment and management
as well as ISP systems. These risks can be mitigated through the use of business
partners with experience in deployment and operation of ISP operations.

Additionally, BPL will face competition from cable companies and Telcos. And
they will join in because there have been numerous studies which indicate that
there will be a market for BPL-based services.

Technically, BPL works well. Two key issues that need to be managed are interference
and the lack of existing standards. These risks are mitigated through good network
design, testing, deployment and management. Equipment must be FCC Part 15 certified
to mitigate interference. Notching techniques can be used as well to help eliminate
interference.

BPL Trials

The PLCforum estimates that there are more than 80 PLC initiatives in more
than 40 countries that have been launched by electric utilities. They indicate
that pilot sites, technological or commercial trials and deployments are numerous
in Europe. The PLCforum highlights what they consider the most important European
initiatives, as the ones developed by EDF (www.edf.fr, France), EDP (www.edp.pt,
Portugal), EEF (www.eef.ch, Switzerland), Endesa (www.endesa.es, Spain), Iberdrola
(www.iberdrola.es, Spain), PPC (www.ppcag.de, Germany) and SSE (www.scottish-southern.co.u.k.,
Scotland).

In Africa, BPL is being used on a trial basis in Ghana and in South Africa.
The City of Tshwane Metropolitan Municipality is leading the country forward
with the deployment of BPL in South Africa.

BPL Associations

In the U.S., the leading associations are the United Power Line Council and
the Power Line Communications Association.

The UPLC is an alliance of electric utilities and technology companies working
together to drive the development of broadband over power lines in a manner
that helps utilities and their partners in North America. The UPLC’s efforts
are focused in three strategic areas: market awareness, regulatory and legislative
advocacy, and technical operability.

The PLCA is a trade association representing the interests of electric utilities
interested in offering power line communications. Associate membership in the
PLCA is open to other parties who have an interest in PLC, such as equipment
manufacturers. The PLCA held its first industry conference on Dec. 12-13, 2001.
The founding membership of the PLCA includes electric utilities that collectively
serve more than 9 million U.S. households and more than 27 million households
globally.

Worldwide, the PLCforum is the leading BPL association. The PLCforum is a leading
international association that represents the interests of manufacturers, energy
utilities and other organizations (universities, other PLC Associations, consultants,
etc.) active in the field of access and in-home PLC technologies. The PLCforum
was created at the start of 2000 and its membership stands at more than 60.

In Japan, there is the PLC-J, in South America, APTEL leads BPL efforts. In
Europe, there is a local body called the PLC Utilities Alliance, involving several
major utility companies, including; EDF (France), EDP (Portugal), EEF (Switzerland),
EnBW (Germany), Endesa (Spain), ENEL (Italy), Iberdrola (Spain), and Unión Fenosa
(Spain). This association represents more than 100 million potential users.

BPL Adoption

The industry is adopting three basic models that vary based on the amount the
utility wants to invest and the level of risk they are willing to accept.

At one end is the landlord model where the utility company basically rents
their grid to an outside party (tenant) for a percentage of the profits this
company can obtain. In this role, there is little investment required and low
risk. Companies exploring the landlord model will usually want free use of the
BPL infrastructure for internal utility use. The tenant will generally comply
with this request as utility-side applications use little bandwidth.

At the other end of the spectrum is the developer model. In this model, the
utility company fully funds all the capital needed to enable BPL. In this role,
there is more risk but also more opportunity to generate revenue both from wholesale
of the ISP and last mile access to offering utility-side applications. Companies
interested in this model have often had some success with Internet offerings
and are seen to have progressive management.

The third model, combining elements of both above models, is the joint venture
model, whereby utilities and ISPs negotiate their partnerships based upon their
capabilities, appetites for investment and responsibilities. Joint ventures
often represent strategic decisions by the parties to refocus, to develop new
capabilities and position their companies in new market spaces, and are often
commitments over longer periods of time.

Conclusion

BPL is a technology that is maturing fast and is about to be deployed in 2005
by several leading U.S. utility companies. BPL has been implemented on every
continent. Europe is the leader and significant deployments in Asia are expected
in 2005. Any utility should seriously consider implementing BPL.