Energy Conservation. Energy
Efficiency. Go Green. Clean Tech.
Smart Grid. The utility industry
has enacted a number of initiatives with
a common goal – improving the quality,
value and long-term sustainability of
electricity delivery. Utility executives
are being challenged to chart a course
for the next century of utility services
and prepare the grid for changing
and often-unknown demands of their
customers. Utility issues are moving
beyond traditional revenue-cycle
services to embrace energy efficiency,
alternative generation and improve
customer services.

For the past 20 years, the industry
has focused considerable resources on
automated meter reading, primarily
intended to improve the accuracy and
cost of monthly revenue reads. Today
focus has broadened to a number of
related applications leveraging the
same technology assets. Dynamic pricing
programs hold great promise for
flattening the load curve, but require
more sophisticated and granular measurement.
This expansion of demand response creates significant opportunities
in both commodity hedging and
customer services, but may also change
the economics of distributed generation.
Increases in distributed generation will
have untold impact on distribution operations,
expanding the need for distribution
automation beyond the substation. The
convergence of these varied and interrelated
applications is creating exciting
opportunities to reshape the nature of
electric delivery.

Utility leaders are developing comprehensive
strategies to implement and
support a variety of new applications that
move well beyond meter reading. Understanding
the cumulative requirements of
these operational initiatives leads to the
recognition that an advanced networking
infrastructure is required to efficiently
manage the many devices that create a
“smart grid.” The right network brings
smart devices “on line” and allows for
real-time command and control of the
entire distribution system. Figure 1 illustrates
how an advanced utility network
connects the components of
a smart grid.

Utilities’ ability to realize the vision
of a smart grid is largely determined by
their choosing the right network infrastructure:
one that is functionally capable and cost-effective today, yet will support
future (and often unknown) requirements.
Advanced networking from the substation
to – and into – the premise creates
the fundamental platform on which smart
grid initiatives are built. The right network
infrastructure provides secure and seamless
connectivity, supporting any utility
application. Innovative, standards-based
applications can leverage smart grid
assets, turning new concepts into new
products.

The practice of a common network
infrastructure supporting a number of
applications is not new. For example,
consider the Ethernet system installed
in most offices. When the network was
installed, it was intended to support a
variety of applications, including email,
Web browsing, video delivery and more.
However, it was not necessary to decide
up front all of the computers, printers or
applications that would ever run over
that network. By choosing a standardsbased
network with the right performance
characteristics, new technologies
are easily and seamlessly incorporated
onto the network.

Utilities that make the right strategic
decisions regarding the networking platform
to deliver the smart grid will enjoy
similar flexibility and business value creation.
Failure to make the right networking
choice may result in a utility’s future initiatives
being hampered by the limitations of
its network.

Defining Your Smart Grid

The first step in implementing the right
network requires a utility to develop a
strategic plan and define the technical,
performance and price characteristics
needed to support both current and future
applications. Input from all areas of the
utility operation should be included, as
all departments are affected by – and can
benefit from – the smart grid. Operational
use cases that consider both current and
anticipated needs should be reviewed,
including representation from customer
service, metering, distribution operations,
information technology, revenue
protection, regulatory and rate making.
A considerable body of work is available
to assist in this effort, including published
documents from EPRI, GridWise and
UtilityAMI.

Open, Not Closed

Next, technical requirements of the
advanced utility network need to be
defined to support the operational
requirements of the business. Given
the variety of devices and interrelations
between several applications, use of
single-purpose or proprietary networking
should be avoided. Implementing
these technologies increases complexity
and cost, while simultaneously decreasing
long-term flexibility. Standardsbased
networking is the safest, surest
route when specifying the network
infrastructure of the smart grid.

The dominant standard in networking
is Internet protocol, known simply as
IP. Beyond the World Wide Web, IP is the
networking standard used in managing
nearly all telecommunications, cable
and information technology applications.
Hundreds of billions of dollars in collective
research and development make IP
the gold standard for mission-critical
networking around the world.

IP addresses many of the challenges
of running multiple applications and
devices on the same network. The IP
suite delivers proven technologies for
addressing, routing, quality of service
and a host of related networking functions,
all demonstrated at scale. With IP,
vendors can compete to develop best-ofbreed
products for a variety of applications,
yet share a common network infrastructure
to minimize cost and complexity.

Security Via Proven Technology

Historically, security in many remote
utility applications consisted solely of
“obscurity” created through the use of
proprietary products or the use of simple
passwords that were rarely changed. The
move to sophisticated command-and-control
applications mandates significantly
more proven and robust security across
the entire grid.

A number of proven IP security technologies
(for example, IPSEC or SSL) are
available to address this need. These
technologies are widely used in a number
of industries, including securing financial
transactions over the Web, to manage a
range of security concerns. Most importantly,
these technologies are constantly
improving due to the collective efforts
of countless vendors. IP suite security
technologies allow utilities to effectively
address concerns of spoofing, denial of
service and unauthorized access without
the requirement of reinventing new technologies
or relying on the efforts of
a single vendor.

Transport Independence

Application vendors have historically
been defined by the physical medium
of their solution. A vendor might be
“wireless” or “powerline,” but rarely
both. Over the past few years, there has
been a dizzying increase in the number
of available carrier solutions, including
WiFi, Wi-Max, Zigbee, Z-wave, DS2,
Homeplug, a variety of cellular standards
and more. Each of these “standards”
(reflecting Layer 1 and Layer 2 of
the ISO seven-layer stack) offers different
advantages and disadvantages.

A similar set of choices exists in enterprise
IT infrastructure. For example, office
computers may connect to the enterprise
network either via WiFi or wired Ethernet.
In the same way an enterprise can choose
computers that connect using a variety of
transports, it should be possible for a utility
to choose the physical transport that
best achieves the business case for any
particular part of its service territory (for
example, wireless for urban or suburban,
powerline for rural). Such flexibility can be
achieved by utilities in the same way that
it is achieved by enterprises: by deploying
standard, interoperable, IP-based products
rather than proprietary, transportspecific
ones.

Performance: Band width and Latency

Two critical issues when developing the
technical requirements of the smart grid
network are those of available bandwidth
and latency.

Bandwidth is the volume of data per
unit time that can move through the
network. The first step in determining
your requirements is to scope how much
data is required from each device and
application. Add them up on a timesensitive
basis. Where are the peaks?
Where does it break? Does the solution
allow you to add bandwidth if needed in
the future?

Although smart grid applications generate
significantly more data than monthly
meter reading and historic low-density,
one-way demand response applications,
it is not a large volume of data relative to
modern IT systems. Take the very familiar
example of a manual meter read: Manual
meter reading generates approximately
30 bytes per month of data, per customer.
A new smart meter, collecting multichannel,
15-minute interval data with event
logs, security logs, power quality and
other measures might generate over
10,000 times as much – perhaps 50 to
60 KB of data per meter, per day.

In an environment of applicationspecific,
low-bandwidth solutions, it may
seem that this much data could never
be supported, nor would ever be necessary.
The history of networking, however,
suggests that if additional data is made
available, customers will always find a
use for it. For example, over time, public
websites have migrated from serving
small text pages of a few KBs, to rich
graphical pages of hundreds of KBs, to
streaming audio and video at tremendous
data rates. These innovations are made
possible by the availability of economical
but rapidly growing Internet bandwidth.

Solutions from the traditional IP-based
networking world, deployed in utility
networks today, render it possible for
utilities to move and manage much larger
amounts of data than heretofore possible.
It is no longer necessary for utilities to
constrain their business operations –
or for that matter, their imaginations –
based on the limitations of their vendors’
technology.

Latency is equally important. Many
smart grid applications, including distribution
automation, outage alarming and
load control signaling, require very low
latency, while others, such as metering,
are more latency-tolerant. Smart grid networking
needs to support end-to-end and
device-to-device latencies not of minutes
or hours, but of seconds and milliseconds.
To manage traffic appropriately, networking
technology must support message
prioritization, allowing critical, latencyintolerant
messages primacy to other
network traffic. For example, meter- reading
acquisition is generally expected only
within a time window measured in minutes
or hours, while some DA applications
require that remote devices talk “across”
the network (without routing through the
back office) in less than a second.

Cost/Performance Balance Drives Value

Hardware economics historically limited
the deployment of multi-application
networks, forcing utilities to implement
vertically integrated, application-specific
solutions. While these solutions often
solved immediate needs, they also created
significant back-office integration
issues, increased operational complexity
and increased long-term costs. Many utilities
hoped that solutions offering greater
bandwidth, such as broadband over
powerline (BPL) would address this need.
Although BPL delivered strong functional
performance, the infrastructure costs
were measured in hundreds of dollars per
home passed, far exceeding the value to
be gained from utility applications alone.

Current hardware economics now make
it possible to deliver high-bandwidth,
low-latency networking at reduced cost.
It is now possible to deploy a systemwide
networking infrastructure delivering hundreds
of Kbps and sub-second latencies
at a fraction of the cost of broadband.
Specific pricing varies based on utility
specifics, but can typically rival traditional
AM R/AM I network pricing. This results in
the utility realizing significantly greater
benefits from a variety of applications
while simultaneously saving 30 to 40 percent
in operational costs versus operating
separate communications solutions for
each application.

Build It Right – Not Over

Less than 20 years ago, laptops, ubiquitous
cell phones, iPods and Xboxes
were not in existence. Considering the
emergence of new utility applications
and devices, it is hard to imagine what is
to come in the next five to 10 years. Even
today, there is an explosion of new utility
and consumer devices, including remote
controllable thermostats, consumer-based
energy storage appliances, customer displays,
fault indicators, distribution automation
applications and more. Regardless
of the applications or devices that emerge,
a standards-based network ensures that
they can easily be incorporated into the
smart grid. As exhibited in other industries,
including cable, IT and telecom, a
robust and flexible network is the basis
for competitive advantage.

An IP-based network allows a utility
to network devices not yet invented,
if they are built on IP. Product development
cycles for devices are much faster
than the life cycle of the network, so
one must expect new devices will
become available and utilities will need
to connect them.

The Right Network

Utilities around the world are now leading
the drive to capture energy efficiency as
the “fifth fuel.” Smart grid applications
including advanced metering, demand
response, distributed generation and distribution
automation offer utilities all the
tools to capture this value.

By specifying and implementing the
right networking infrastructure, utilities
are building a strategic technology platform
that enables a wide range of policy
and business initiatives for years to come,
avoiding concerns of near-term obsolescence
or functionally bridling technologies.
IP-based networking is really the
only choice when building the network
infrastructure for the future.