The smart utility will be a connected utility.

The energy crisis in the US is driving a major transformation in the business model of how the utility industry operates, requiring rapid and pervasive deployment of reliable, secure, and two-way broadband communications throughout its infrastructure. Utilities and regulators are putting significant amounts of time and energy into the selection of new physical equipment (smart meters and other devices), but are not putting the same emphasis into choosing the right communication architecture that will support the Smart Grid of the future. While there is not a single communications technology that will be appropriate everywhere and for every application, a strong case can be made for a private and secure network that makes efficient use of public carriers' cellular footprint and bandwidth.

The utility industry has changed slowly over the past century. The biggest concern was managing changes as directed by the market in a timely and orderly manner for increased power generation or new distribution methods. Times have changed. In the upcoming decade, there are many compelling reasons driving the utility industry that simply were not factors in the past.

Major challenges faced by the utility industry in the next ten years include:

* Energy demand is projected to increase over 60%.

* Over 50% of the utility industry's skilled workforce will retire with job experience and knowledge that cannot be replaced one-for-one.

* Global demand and resource scarcities will drive energy costs to unprecedented heights.

* Government mandates, carbon caps, and regulations will limit new generation sources to "renewable" and "green" only.

* Increases in new government mandates around the reliability of the "grid" itself.

The industry must change to meet these challenges. The key to success will involve three key capabilities:

* Real-time data collection from all end points through a myriad of "smart devices."

* Reliable, secure, real-time, high bandwidth communications network(s) to deliver information and facilitate automation and remote control back out to the devices.

* IT systems including databases, decision support systems, and applications to support automation across the grid that will ultimately drive inefficiencies out of today's business models.

Transformation

Renewable energy provides perhaps the greatest opportunity for the utility industry to meet or exceed "clean energy" requirements. The challenge for the utilities will be to inject existing and nouveaux energy sources into base load calculations, knowing these new generation sources are not always available when needed. Many renewable energy sources are unpredictable, such as the sun or wind. Renewable energy generation sources must be monitored and managed around the clock and efficiencies dictate that the system will need to be fully automated. This drives the need for real-time information from a large percentage of end points, two-way communication between end-points, and automation within the T&D infrastructure to shift and shed loads and to avoid rolling trucks into the field.

To complicate the picture a bit further, power generation is evolving from a centralized one-way to a distributed two-way system. "Distributed Generation" typically refers to generating power from many small energy sources that are collectively efficient and located closer to the consumer, then putting this energy back into the grid as supply. Examples include tapping into residential solar panels, windmills, and excess stored electricity in plug-in electric hybrid vehicles (PHEV) batteries. The consumer is, in effect, turned into a producer and reimbursed by the power company with energy credits, rebates or cash.

The opportunity for utilities to tap into these new energy sources with little upfront investment is tremendous. The challenge for the industry is to manage the fragmentation of control for generation from the original small number of dependable and controlled power generation sources to an open market where consumers become generation sources. This reciprocating market of supply and demand must be managed both at the individual and aggregate level.

Distributed generation requires a real-time flow of information both ways with a footprint that can be installed easily, unobtrusively and quickly. Also, many of the information gathering and dissemination devices will be installed by third parties, or even by consumers themselves. These devices will also be coupled with various meters, thermostats and control panels, and integrated within home energy automation systems.

The adoption of the renewables and distributed generation energy models accelerates the need for automation and continuous communication. Legacy batch-processing systems will migrate to real-time transaction flows that drive pricing, billing, decision support and operational controls for power supply and delivery. This active communications backbone must support:

* Two-way communication between nodes;

* High bandwidth with low latency reliability across a disbursed terrain;

* Distributed real-time processing;

* Pervasive connectivity to all device types up and downstream;

* Complete end-to-end security;

* Ease of use for consumers; and

* Simplified deployment that is quick to set up and has no power lines, wires or trenches--wireless.

Transmission and Distribution

As generation moves from the traditional upstream-to-downstream flow of electricity to a model where load is shifting up and downstream constantly, the entire transmission and distribution (T&D) infrastructure must be able to accommodate instantaneous changes. Integrated into this will be a network of new automated monitoring, detection, and switching apparatus controlled automatically and by remote control. The flow of data will be two-way and real-time.

Between the utility and consumer, two-way load management systems (LMS) communicate with load points and send on/off status, current kW usage, and meter readings back to the controller. With this information the LMS can compute the latest energy consumption figures before and after the shed cycle begins, adjusting the load shed as needed. This process requires ready access to real-time two-way communications between the LMS and load point.

There is a rapidly growing movement in the utility industry to view potential demand-side savings as a resource to be utilized when needed. "Smart" utilities are looking to active two-way demand management programs to both curtail peak usage and use customers' excess as a resource that can be injected back into the grid as needed. Increasingly, peak demand management systems are used to monitor and analyze end-user consumption, and work with the utility and the consumer to better plan for and carry out demand-side programs as needed.

As an example, during a peak demand situation commercial and industrial (C&I) consumers can switch to an alternative power source such as their backup generation system or even turn on the backup generation system to export and sell power to the grid, depending on real time pricing. Here, the customer saves money by reducing peak demand priced energy consumption and/or makes money by selling excess capacity back to the utility. The key to demand management systems is a robust, two-way high bandwidth communications network that is relatively quick to deploy, universal in that it can be used with both similar and disparate consumer premises, high bandwidth, and low cost--all traits of wireless communications.

In parallel with the shift to up and downstream electricity flow, each major element in the T&D system must be monitored and controlled remotely. Smart devices will be retrofitted onto existing equipment wherever possible. One of the biggest challenges in this area is that, unlike meters, the smart devices are highly specialized due to the varying types of infrastructure equipment they need to integrate into. These devices and the communications systems they employ will require specialized integration up front in order to cover the entire T&D grid. As the T&D elements become "wired" for remote monitoring and control, the T&D applications and processes will need to move from manual to automated in order to monitor and keep pace with real-time conditions affecting supply and demand. Similar to the transformation scenario above, the T&D communications backbone must support the same items listed.

Smart Metering Programs--Changing the Demand and Consumption Model

Smart meters were one of the first initiatives the industry took towards becoming "smart". The first generation of smart meters was built around the simple automation of manual meter reading (AMR). This was a point solution that met the specific need of reducing meter readers, but could not be directly applied to more advanced or alternative uses. The return on investment (ROI) for this solution was specified against the simple business case of replacing meter readers. AMR did not go far enough in terms of a full set of capabilities that would deliver much broader ROIs, much less impact energy use by the consumer. Many AMR programs were approved and contracted to deploy one-way or one and one-halfway wireless communications technologies, all of which had very narrow bandwidth. The limitations of these communications choices are now becoming widely understood, particularly in the context of newer definitions around automated metering infrastructure (AMI), the second generation of smart metering solutions.

AMI adheres to the principle of more functionality and automation with more frequency. AMI is evolving into an end-to-end solution with capabilities beyond AMR--but based on the lessons of AMR. Upon realizing the benefits of reducing or eliminating meter reads, many utilities identified all of the functions carried out by field personnel that can now be done remotely over the air including service connect, disconnect, outage detection, and meter reads. In addition to automating field service functions with real-time communications, real-time pricing becomes possible.

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