Navigant Research Blog

European Grids Look to RF Mesh Networks

— July 23, 2014

Communications networks for smart grids have evolved very differently in Europe than they have in North America, with power line communications (PLC) and cellular technology, thus far, as the leading forms of communications for smart meter connectivity across the pond.  Here in the states, the availability of unlicensed (free) spectrum in the 900 MHz band has led to the leadership of proprietary radio frequency (RF) mesh solutions, such as those provided by Itron, Silver Spring Networks, Elster, Tantalus, Landis+Gyr, and others.

The European Commission, however, has taken steps in recent months to bring 48 European nations into alignment on spectrum policy across the continent.  Specifically, for smart meters and smart grid applications (and other machine-to-machine [M2M] applications), the European Conference of Postal and Telecommunications Administrations (CEPT) announced in February a framework whereby 5.6 MHz of spectrum, from 870 MHz to 875.6 MHz, will be set aside for unlicensed M2M uses, including smart meters and grids.  Details can be found in CEPT’s Electronic Communications Committee (ECC) Report 189.

Indoor Reading

CEPT cited several reasons for supporting interoperability, including the creation of economies of scale and cost reduction, reduction in the risk of cross-border interference, and greater flexibility.  The choice of sub-1 GHz spectrum, where propagation characteristics are stronger than at higher bands, makes the spectrum suitable for reading meters that may be placed indoors, even in basements — a common practice in European nations.

Ofcom, the United Kingdom’s telecommunications regulatory body, this year made amendments to its Wireless Telegraphy Act that allow for commercial operations on a license-exempt basis at 870 MHz to 876 MHz as of June 27, 2014; similar action is likely across the 48 nations that participate in CEPT.

This is good news for vendors, like those named above, but also for utilities across Europe seeking more flexibility in their smart meter and grid deployments.  RF mesh solutions are often less expensive than PLC for near area networks, although that varies widely depending upon the structure of the grid in the region as well as the topography.  Nonetheless, some smart meter/communications solutions providers have struggled financially over the past couple of years after ramp-up for American Recovery and Reinvestment Act (ARRA) funding created a spike in demand that has since fallen rather sharply.

Room to Grow

Europe is poised to be the next big growth area for smart metering, thanks to the EU’s 20-20-20 initiative, which a majority of European nations support.  Navigant Research estimates that current penetration of smart meters across Europe is just 15%, compared with more than 40% in North America.  While several nations have made significant progress in deployment (Italy, Scandinavia), Germany isn’t yet on board with the 20-20-20 initiative, and the United Kingdom and France are just getting rolling.  In Eastern Europe, there has been minimal activity to date, particularly in Russia, home to nearly 100 million meters.  For details on Navigant Research’s global smart meter forecast, look for our report Smart Meters, slated for publication later this year.

The Market for Smart Meters, Europe: 2013-2023

(Source: Navigant Research)

Smart meter shipments in North America are expected to total 121 million between 2014 and 2023; that total is forecast to be 221 million in Europe.  That’s more than $18 billion in anticipated revenue for smart meters — a market of which surely every smart meter vendor will take note.

 

Emerging Broadband Technology Offers New Connectivity for Utilities

— July 15, 2014

In the battle for smart grid communications standards, yet another contender is now on the horizon, promising ultra fast data speeds over existing copper wires.  And while telephone companies (telcos) are the primary target market for the G.Fast standard, chipset developer Sckipio believes that the standard will be attractive to utilities for smart grid applications, in addition to broadband connectivity and over-the-top applications like video.

Designed to help telcos cost-effectively compete with cable broadband and very expensive fiber-to-the-home (FTTH) connectivity, G.Fast employs vectoring technology to eliminate interference (cross-talk) between multiple wire pairs in a single copper cable.  The International Telecommunication Union (ITU) instituted the standard in 2010, and recent field trials have shown promising results.

Belgacom has trialed the standard with 3,000 customers and reported a nearly four-fold increase in access speeds over copper.  This makes the technology a reasonable alternative to FTTH, particularly in urban areas with extensive copper infrastructure already in place.  In multi-dwelling units with extensive in-wall phone lines, the use of existing copper lines represents enormous cost-saving, as well as a speed-to-market advantage over running new fiber.

Coming Soon

G.fast is designed for use in the last-mile – in practice, over distances of less than 250 meters.  This allows fiber to reach as far as the basement of an apartment block, for example, eliminating the need to rewire the whole building and still allowing a notable acceleration in access speeds.  G.fast requires a short loop (less than 250 meters) and operates at higher frequencies than digital subscriber line transmissions, which also run over existing copper wires, increasing the risk of cross-talk unless the new vectoring technology is employed.

Sckipio says it has seen interest in Europe, North America, and Asia Pacific, and expects to see telco deployment begin in earnest in 2015.

Tel Aviv, Israel-based Sckipio was founded in 2012, and in December 2013 announced a $10 million venture capital round with Gemini Israel Ventures, Genesis Partners, Amiti Capital, and Aviv Ventures.  The company  is building ultra high-speed G.fast broadband modem semiconductors.

The G.fast standard is still working its way through ITU approval, and a few technical hurdles remain:  Powering the equipment and the unbundling of sub-loops is something that different countries are treating differently.

G.fast represents a great leap forward for telcos struggling with legacy copper networks.  As a viable alternative for utilities seeking connectivity for smart grid applications, it is likely still a couple of years out.  Given its very high data transfer speeds, however, it may well present a new alternative for utilities needing visibility and control at the grid edge — while also providing telephone companies with an opportunity to ramp up their business in the utility/smart grid vertical.

 

Coming to the Motor City: A Smarter Grid

— July 13, 2014

The smart grid in Detroit is about to get smarter – and so are utility industry executives exploring options for real-time grid data and analytics.  Distribution grid sensor developer Tollgrade Communications recently announced a $300,000 project to deploy its LightHouse sensors and predictive grid analytics solution across DTE Energy’s Detroit network.  The companies aim to demonstrate how outages can be prevented.

The 3-year program was selected as a Commitment to Action project by the Clinton Global Initiative (CGI) at the recent CGI event in Denver, where Tollgrade CEO Ed Kennedy took to the stage with former president Bill Clinton to discuss the project.  Tollgrade, Kennedy said, will make public quarterly reports on the project, beginning in 1Q 2015, identifying best practices and sharing detailed performance statistics.

Cheaper Than Building a Substation

With 2.1 million customers and 2,600 feeder circuits, DTE Energy has already begun piloting the system around Detroit, and Tollgrade says that it hopes to prevent 500,000 outage minutes over the next 3 years.  Because of the heavy concentration of auto manufacturing in the Detroit area, those saved minutes should translate into substantial economic benefits.  The system will leverage several communications protocols, including DTE’s advanced metering infrastructure communications network, reducing the startup cost and improving the return on investment.

The sensors will be placed along troublesome feeders as well as outside substations where older infrastructure increases the likelihood of outages.  Combined with the predictive analytics solution, the sensors cost just a few thousand dollars per location and could help DTE Energy avoid or defer replacing a million-dollar substation.  Both investors and regulators are sure to like those stats.

Predicting Change

Predictive grid analytics has been a hot topic in the industry for the last few years, but only recently have the prices of solutions and sensors fallen to a level where utilities can justify the cost to deploy them widely throughout the distribution network.  Navigant Research expects the market for distribution grid sensor equipment to grow from less than $400 million worldwide today to 4 times that amount by 2023.  (Detailed analysis of distribution grid sensors can be found in Navigant Research’s report, Asset Management and Condition Monitoring.)

Since its first meeting in 2011, CGI America participants have made more than 400 commitments valued at nearly $16 billion when fully funded and implemented.  The Modern Grid was one of 10 working groups this year; others include efforts in Sustainable Buildings and Infrastructure for Cities and States.

Another CGI Commitment to Action grant announced last week will fund a market-based, fixed-price funding program for solar and renewable technologies.  The Feed-Out Program from Demeter Power will support solar-powered carports with electric vehicle charging stations at a net-negative cost to the customer.  In other words, eligible businesses pay a fixed monthly fee to Demeter Power (lower than their previous monthly electricity bill) and their employees and customers enjoy free car charging while parked there.  Demeter will own and maintain the infrastructure.

The program will initially make financing available to commercial properties located in Northern California communities participating in the California FIRST property assessed clean energy (PACE) Program, which is offered through the California Statewide Community Development Authority.  Interested participants must register with Demeter Power Group to participate in the program, which is expected to launch in the first quarter of 2015.

 

Q&A: Doug Houseman of EnerNex on the Future of Utilities and Power Generation

— June 17, 2014

The release of the U.S. Environmental Protection Agency’s (EPA’s) long-awaited new rule on carbon emissions from U.S. power plants has heightened the debate over the future of power generation in this country.  Environmental organizations and renewable energy industry figures have suggested that wholesale replacement of fossil fuel-based generation with renewables is both achievable and desirable within the next few decades.

I spoke with Doug Houseman, vice president of Innovation and Technology at EnerNex, to get his take on the future of power generation and on utility industry challenges in general.  Houseman has 30 years’ experience in the global power industry and is widely recognized as an energy sector thought leader.  EnerNex specializes in engineering services and consulting to utilities, government, and private institutions.

Navigant Research: In a new report on power generation from renewable sources, Greenpeace suggests that smart grid investments will facilitate integration of extensive distributed generation, but later in the report it shows a “power plant value chain” where generation utilities disappear after 2020 and grid operators become state- or community-controlled.  What’s the logic there?

Doug Houseman: The implication is that the grid can mostly just disappear and that renewable energy will have the same ability to be scheduled as conventional power plants.  A peer-reviewed IEEE [Institute of Electrical and Electronics Engineers] paper I coauthored estimated that, if the U.S. were to use only wind energy, in order to deal with the annual cycle of wind and demand, the U.S. would need large amounts of storage – for example, pumped hydro, which is the most cost-effective storage available today for long-term storage.  We would need to take Lake Michigan twice and put it behind a 200-foot-high dam.  Solar and mixed renewable scenarios all require significant annual storage cycles.  If we move all transportation to electricity, those numbers would grow significantly – say, three to four Lake Michigan equivalents of pumped storage.

NR:  Plans like this rely not only on green generation sources but also reduced electricity and heating demand, thanks to more efficient electronic devices and energy-related renovation of the residential building stock.  Who pays for these innovations?

DH: The consumers will, which means that the people who have money will end up even better off than the people who don’t.  These devices will have a much higher initial cost than less efficient devices – unless the government intervenes in the market in a significant fashion, by either taxing the low efficiency devices heavily or subsidizing the high efficiency devices.  Since many energy-consuming devices have a 20- to 30-year life, even if the manufacture of low efficiency devices are banned, the resale of them through Goodwill and other resale shops will happen, extending use of these devices to the end of their useful life.

Also, to rehab the U.S. housing stock is not a simple process, but probably a 30- to 40-year process – 100 million dwellings will take time to completely rehab to the kinds of standards necessary.  Some of those rehabs will take tens of thousands of dollars to do, and in many cases the buildings will have to be vacant to do the rehab because of remediation issues (like mold) that will be found in the buildings.

NR:  Policy changes are also needed to dramatically change the industry.  Many observers suggest abolishing subsidies for fossil fuels and nuclear energy and transferring the socialized cost of pollution back to the energy sector via carbon fees.  Do you see any of these policy changes happening in the near term?

DH: Honestly, no.  The House of Representatives has proposed a major overhaul of the tax code, which removes many of the subsidies, but the Senate has indicated it is dead on arrival because of the depth of the change.  I doubt that a comprehensive plan can get through and that is the only way to actually act on all the possible subsidies.  Some say that any investment or R&D credits are subsidies, so the depth of the overhaul on the tax code would have to be extensive.

NR:  In the wake of Fukushima, environmental activists and national governments – including Germany and Japan – are working to eliminate nuclear generation.  Natural gas is often considered a “transitional” or “bridge” fuel source.  Your thoughts?

DH: The Sierra Club, the NRDC [Natural Resources Defense Council], and others have indicated that nuclear has a place.  The administration has indicated that natural gas will either need carbon capture or have to be transitioned out.  So electricity use will rise further (as will storage) as heating and cooling move to electricity, along with transportation.

 

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