8/7/2019 smart-grid-communica

http://slidepdf.com/reader/full/smart-grid-communica 1/2

Home About Subscribe RSS

  Search  

Editor:

Smart Grid Communications – 7 Tough Questions

Before Making the Investment Leap

Topics Insights, Smart Grid

January 18, 2011 | By Paul Mauldin 

Smart grid customer side killer-apps may

fire the imagination, but the biggest

challenge is getting the right

communication platform between the utility

and the customer.

We’ve got some heavy lifting to do before

we get to the fun stuff, like household

energy control, true real time pricing and

optimal dispatch of rooftop solar. First

things first - we need adequate data

communication links that connect

utilities to their customers. That’s a big

step for an industry whose primary

communication with customers has

been a bill in the mail.

So far, smart grid activities are tracking the

familiar “S” curve that most technology

developments follow – start slow; gather interest; accelerate investment, number of participants and innovation;

then ultimately flatten out and be absorbed by another paradigm. We’re entering the second phase – accelerating

investment and commitment, particularly by the electric utility industry which has the most at stake in terms of risk.

And maybe the biggest investment risk for utilities (and for their regulators, rate payers and investors) are

the telecommunications networks required to make smart grid work. 

Without a well thought-out and robust communication platform, smart grid deployment may not meet the big

expectations that have been bandied about. It could even create an unstoppable financial sinkhole.

Every utility has unique requirements: technical or organizational. No one communications solution fits the entire

industry. But at least we’re sure of two things: 1) Consultants will be supercharging their frequent flier accounts as

they try to help their utility clients make the best decisions and 2) Telecoms, big and small, whether satellite,

radio, WiMax, LTE, or cable, will be chasing the potentially huge smart grid market. 

But regardless of who’s knocking at the door, each utility needs to answer at least seven critical questions before

signing purchase agreements:

Are multiple networks required? Bandwidth, latency and security requirements all vary according to the applicationsbeing supported, be they distribution automation, metering or demand management. It’s difficult for a single platform tomeet all needs, particularly when geography, existing communication infrastructure and customer density areconsidered.

1.

Is a private network required? Is it the technically optimal choice? Is it cost-effective compared to a public network?Is a mix of public and private networks the way to go? What about privacy and security issues?

2.

What would the ideal partnership with a telecom(s) look like? What are the potential barriers (internal and external)to more cooperation between utilities and telecom providers?

3.

For investor-owned utilities, will the smart grid benefit ratepayers, investors or both? If the smart grid enablesunregulated investor benefits from new revenue sources, then the ratepayers can’t be saddled with the full cost of thecommunications system(s). Also, there’s generally a “China Wall” required to prevent investors benefiting from theregulated side’s systems and data. Building a credible wall between the regulated and unregulated enterprises requirescareful technical and organizational planning, and effective liaison with regulators.

4.

How will rate recovery be managed? We’ve seen several utilities crash in front of their state commissions when tryingto recover smart grid meter costs. Commission sign-off on major capital expenditures is getting more uncertain

5.

How can a utility avoid system obsolescence and stranded assets? The utility industry has plenty of examples ofgetting stuck with systems that were unsupportable and obsolete as better and cheaper technology continued to bedeveloped.

6.

How will risk management strategies be utilized to minimize both technology AND investment risk? Whatorganization/department within the utility will take the responsibility (and not just the authority)? I bet we’ll seea lot of arm wrestling between the utility Law, Engineering, IT, Telecom and Marketingdepartments!

7.

In a survey, we found widespread interest in the answers to these questions, from both the utility and telecom

communities. In response, T&D World  magazine will publish the supplement “Choosing a Smart grid

Communications Platform” in April 2011.

Stay tuned and let us know if you have some answers, or even more questions.

 

Topics Insights, Smart Grid

About the Author

Paul Mauldin

Paul earned his B.S. and an M.S. in electrical engineering from the University of California-Berkeley and is a

registered professional engineer. He has worked in the energy industry for more than 25 years, developing and

implementing advanced energy technologies. As research director for Pacific Gas and Electric Co. he pioneered

Page 1 of 2Smart Grid Communications – 7 Tough Questions Before Making the Investment Lea...

19/01/2011http://intelligentenergyportal.com/article/smart-grid-communications-%E2%80%93-7 ...

8/7/2019 smart-grid-communica

http://slidepdf.com/reader/full/smart-grid-communica 2/2

American City and County EC&M Food Management Lodging Hospitality Restaurant Hospitality Waste Age

American School and University Electrical Wholesaling HPAC Connected Planet Concrete Products Supermarket News T&D World

Contact Us For Advertisers Terms of Use Privacy PolicyCopyright © 2010 Penton Media, Inc. All rights reserved.

Intelligent Energy Sources

methodologies used in the design, maintenance and control of energy delivery systems. As a

consultant he has provided guidance to utilities and the vendor community, nationally and

internationally.

Page 2 of 2Smart Grid Communications – 7 Tough Questions Before Making the Investment Lea...

19/01/2011http://intelligentenergyportal.com/article/smart-grid-communications-%E2%80%93-7 ...