Telcos power into the Energy sector : Smart Grid


Our power grids are evolving towards smart grids with a lot of dynamic active components distributed all over the grid, such as renewable energy sources or electric vehicles. While some companies are exploring the option of building their own, others are leveraging the deep expertise and resources of the telecommunications sector, who have a range of assets that are uniquely suited to providing such a platform. This includes coverage, experience in managing thousands of distributed objects and volumes of data, expertise in dealing with call usage and charges to assist in helping shape consumer behaviour, as well as a developing roadmap and budget for ongoing innovation.

In essence, a Smart Grid combines two networks – the transmission and distribution network and a modern data communications network that allows for a two-way flow of information between elements such as smart meters, smart sensors, distribution automation devices and back-end IT systems.To ensure that the grid is truly interactive, and that the right information is available at the right time, in the right place, a robust and flexible communications network is essential. In particular, network reliability and latency are critical considerations for systems that require frequent data transmission, such as metering or Supervisory Control and Data Acquisition (SCADA) systems. Other key considerations for the communications network include coverage, security, capacity, obsolescence and cost.

To support the utilities industry, the EU is funding a Smart Grid Project, known as SUNSEED, to develop “technological and economic models for the most efficient use of communications infrastructure in the smart grids of the future”. The project is designed to explore how connected sensors can cost-efectively deliver visibility, safety and control within a so-called Future Grid.The project employs both the public mobile communication networks owned and operated by Telecom Slovenije and the private communication network owned and operated by the grid operator Elektro Primorska to support the Future Grid.

For the SUNSEED project, Telecom Slovenije has deployed 400 wide area measurement (and control) sensor nodes across part of the existing Elektro Primorska distribution network. These nodes measure and report a variety of parameters, including time-stamped values of power, quality, voltage, harmonics and other data to enable real-time event tracking and control. Each node is equipped with a sophisticated communication module connected to Telecom Slovenije’s public networks (either LTE or WiFi), which enables the delivery of encrypted data to software applications running within the utility’s operational control centre. Each connected node also has an embedded secure element designed to prevent device cloning and credential theft through a physical attack on the device.

The SUNSEED project is demonstrating that Telecom Slovenije’s public mobile network is able to satisfy the Future Grid’s communication requirements (in terms of coverage, security, reliability, availability and latency), pointing to how a utility can cost effectively achieve real time visibility and control of such a grid. Furthermore, a comparative study of the business models of the main stakeholders in smart grid distributed energy generation shows they could all benefit economically from the use of a cloud-based service provided by a telecoms operator.

Smart grid test-beds are now being set up around the world, most recently by the Smart Energy Collective in the Netherlands. Their aim is to test the advanced technologies required to support new elements of the power grid, such as electric vehicle charging infrastructure, wind and solar power and automation of transmission and distribution networks. These test-beds also research new market and business models. Just as importantly, the test-beds are exploring ways to change end-user energy consumption habits, which will be fundamental to achieving major reductions in CO2 emissions.

South Korea was among the first countries to set up a test-bed for smart grids, preparing South Korean companies to be at the forefront of the early commercialisation of the technology. South Korean telcos will be among the main beneficiaries of this pioneering approach, as they are preparing to export their expertise and technology outside of Korea. In 2012, for example, KT started deploying its Smart Grid Network Operating Centre (NOC) technology in Finland and Uzbekistan. The operator also conducted analysis and design for four buildings in Chicago in May 2012; and it developed a pre-commercial service for 50 homes in Bahrain in 2011. SKT, another leading Korean telco, is also planning to expand into the overseas markets for smart grids, such as the U.S. and China.

Machine to machine (M2M) technology are at the heart of tomorrow’s Smart Grids – grids that are capable of supporting electric vehicle (EV) charging, renewable microgeneration (via solar, wind or other means), and advanced energy conservation. Successful operation of the smart grid requires secure and interoperable ICT infrastructure and platforms to support new services, such as demand response (DR), building energy management and power retail. Fortunately, for Telcos , their existing core competencies are ideal for expansion into certain areas of Smart Grid, allowing them to gain a foothold in the electricity market : Billing , CRM , Smart Meters , M2M, Cloud storage , IoT ,Big Data.

Such are the perceived benefits of smart meters that globally they are being rolled out on a massive scale. Indeed, driven by the growing uptake in China and the US, smart meters are expected to become a $320 billion market, according to Gazprom, with almost one billion smart meters in deployment around the world by 2020. Demand response will enable utilities companies to curtail the consumption of energy by home and business users during times of peak demand, by controlling the use of electricity and appliances at customer premises and rewarding them through price discounts and other incentives.

Possibly the biggest challenge for electricity businesses is how to manage and secure the tremendous amount of data that smart meters and other M2M applications will generate. For example, three or four billable readings per year will instead jump to possibly 17,000 per year, per smart meter – a massive increase in both volume and complexity, given that smart meters are capable of more than simple kWhs and timestamps. As a result of this data tsunami, many utilities must examine Cloud technology as a solution that enables them to minimise their operating and capital expenditures for software solutions.

Cloud based delivery means that utilities pay for usage rather than as an up-front capital expenditure, and can scale up or down as required. For a utility to build out its own proprietary storage and processing capabilities, the costs would generally be considered prohibitive. Among the first to develop a Cloud-offering to the utilities sector was Verizon in the US, who teamed with eMeter to deliver eMeter’s data management software to utilities as a managed Cloud-based service.

Much like telecoms operators had to adjust to developments in wireless technologies, IP core switching and the need for real-time billing systems, the electricity industry will also have to adapt to changing models of power generation, distribution and billing, while improving cost and operational efficiencies. The technology trends form an ideal opportunity for telcos to move into the electricity billing and data handling , cloud storage market to work with the Utilities as they have done in Korea and Slovenia. Telcos and Electricity companies offering energy management services as part of their service package in a mutually reinforcing spiral of synergy  isn’t such a bad deal after all !!

Sadiq Malik ( Telco Strategist )


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