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Mobile & Wireless
What opportunities do telecom operators see in Europe's evolving smart grid deployment?
Wireless networks will be the key enabler
by Therese Cory
Utility power grids were built decades ago and still consist of static, centralized networks linking several million meters at consumer premises.
Readings are taken manually at monthly or other intervals for the purpose of billing. It is now recognized that making these grids smart is necessary in order to bring them into the 21st century.
In essence, a smart grid consists of a measuring device at the customer premise to take readings, which will be transmitted without human intervention via a communications network — connecting to intelligent systems at the energy company’s central office.
What makes a smart grid ‘smart’ is the ability to transmit energy usage data directly and at frequent intervals (say half hourly) from the meters to the central office. From this data, useful information may be derived in real time about the way the entire grid is operating; hence the meters become part of a large connected system whose behavior is studied and analyzed by clever software. A number of benefits can be derived from analyzing this data, through:
• Greater accuracy in billing
• Cost savings from eliminating engineers visits to homes
• Improved troubleshooting and maintenance of the network from better understanding of power utilization usage patterns
• Smart grid communications are bi-directional, such that the meter in the premises are also ‘smart’, able to display the energy utilized by consumers and alert them on their use of energy.
Ultimately, smart grids will enable effective energy demand management and control at regional and national levels.
Smart grids are currently attracting interest thanks to well publicized government mandates and economic stimulus packages, but pilot projects have been ongoing for some years in several parts of the world. They involve dedicated teams composed of communications service providers, device makers, systems developers and integrators among others. Such projects typically connect tens of thousands of devices. Sensor networks are now past the experimental phase and by and large have been shown to work.
The telecom position
From the above, communications are an essential part of the smart grid in assuring the accurate and timely transmission of metered data to the central office. While M2M networks today use wired as well as wireless communications, wiring will be just too impractical and costly for connecting all end devices in future large scale implementations, which will number in the millions. Hence wireless networks will be key enablers of smart grids in the future.
The analyst firm Berg Insight estimates that wireless M2M network connections will grow at a compound annual growth rate of 37.9 percent during the next five years, reaching 186 million connections globally, from 37.5 million in 2008. It also estimates that close to 10% of cellular connections in Sweden and Finland are already M2M connections, due to the extensive use of GPRS for meter reading applications.
Drivers and enablers
The EU Directive 2006/32/EC on energy end-use efficiency and energy services has as its ultimate aim the management of energy demand; this in turn is part of a raft of legislation designed to respond to the effects of climate change, which ranges from eco-design, service and performance issues to central governance and even taxation issues.
For its part, the UK government’s Department of Energy and Climate Change (DECC) has announced that a smart meter will be installed in every home by 2020, i.e. 47 million meters in 26 million homes. In May 2009, it launched a consultation to gather views on how to address practical issues, such as how the market should be structured and choosing rollout models. In Sweden, a similar project is near completion, to meet a government mandate requiring all utilities to have an advanced metering infrastructure in place by June 1, 2009.
Government mandates and economic stimulus packages are necessary to encourage firms to invest and participate in such massive projects as the Smart Grid; this was the view of Simone Chiappi of E.ON, one of the speakers at the Smart Metering UK and Ireland 2009 conference held in London in June 2009. What’s more, standardization is key to ensuring that all parts of the interconnecting chain work together. In Europe, in addition to the 2006/32/EC Directive, there is the standardization mandate (Mandate M/441) related to the development of an open system architecture for utility meters involving various communication protocols, including wireless.
Wireless operators are following these initiatives and also upgrading their network capacity in readiness for a wireless broadband rollout, as consumers increasingly demand data-intensive applications from their mobile handsets.
Overcoming challenges
The challenges to large scale smart grid deployments are major, and are both technical and business-related.
First, all the partners in the chain must be able to work seamlessly to ensure interoperability. Putting together a wireless M2M network is a complex operation entailing a large number of steps and checks including:
• selecting the best radio technology and protocols for transmitting the data
• assuring compatibility between device and network (e.g. through device certification by the operator)
• selecting the best data format for receipt and analysis by the back office
According to Accenture, today’s experimental trial projects will likely necessitate changes during roll-out in all these components to optimize the solution.
As device and electronics engineers, telecoms engineers and IT developers differ in terms of discipline, ethos and technical know-how, co-operation will prove challenging; each discipline has its own schedule for ongoing upgrades and standardization of its technology which the other partners must understand. At the London Smart Metering Conference, Vodafone’s M2M Business Development Manager Marcus Breekweg emphasized the need to bring all these participants together early on in the project; working as partners rather than in a supplier-contractor relationship would best utilize the network for technical and commercial advantage. By comparison, the telecoms industry has not found it straightforward in the past few years to work with media partners for providing content based services. SLA agreements between the partners will also be crucial here.
Secondly, the industry understands that the massive scale of such projects will cause wireless networks to evolve, and they will in the future likely include more than one type of communication protocol, e.g. Wi-Fi, Bluetooth, ZigBee, wireless mesh, and UWB (ultra wide band), all of which are under development. Hence putting SIM cards in meters is just the first step to building a working smart grid. Each wireless operator has a vested interest in how these SIM cards will be controlled and updated, as each may use proprietary standards that could conflict with open network and software deployments.
Thirdly, critical to industrial scale success are reliable, proven and working volume deployments and the ability to analyze very large volumes of data from different sources. Operators may have the advantage here, as they already analyze conventional call detail and event detail records produced in huge numbers by the network for applications such as billing, revenue assurance and network monitoring and management.
M2M traffic today is small compared with that of traditional voice or data services. However, as more and more M2M networks are deployed, these could generate more and more traffic volumes. Hence smart grids are one application that could become a significant and assured revenue source for many wireless service providers; the increased traffic from sensor data would offset the decline in traditional voice revenues.
Business models, delivery models, revenue sharing models and partner relationships have yet to evolve; analysts expect there will be significant room for both network ownership and outsourced models.
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