Navigant Research Blog

Utilities, Public Safety, and Telecom Concerns Fight IoT Startup Higher Ground

— December 7, 2016

Cyber Security MonitoringElectric utilities and their advocate organization the Utilities Technology Council (UTC) have joined communications and public safety concerns in opposing satellite messaging startup Higher Ground LLC. The California-based company first filed with the Federal Communications Commission (FCC) in 2015 for permission to use 6 GHz spectrum bands for a satellite-based application that would allow smartphones to send and receive messages and email in areas not covered by cellular service providers. The service would use a smartphone case (called a SatPaq) outfitted with an antenna to enable communications with the IntelSat satellite system.

Higher Ground also envisions Internet of Things (IoT) applications for its network, including communicating soil conditions, detecting agricultural pests, and monitoring livestock far from cellular networks. In its filing, the company says, “Someday we hope to have one million SatPaqs in use.”

The company’s application suggests that interference events would be extremely rare and that its case would shut down if interference is detected. The SatPaqs are designed to operate on C-band frequencies in the 3,700 MHz-4,200 MHz (space-to-Earth) and 5,925 MHz-6,425 MHz (Earth-to-space) bands.

Not So Fast

Utilities, along with public safety and telecom organizations, use the 6 GHz band for point-to-point (PtP) microwave connections. For utilities, these connections serve substation SCADA and tele-protection functions that are critical to grid stability and reliability.

Utilities have already had to relocate their microwave networks once before due to FCC spectrum licensing machinations. As Nebraska Public Power District (NPPD) noted in its filing submitted in September, “NPPD had utilized the 1.9 GHz and 2.1 GHz fixed microwave bands in the past, which the FCC reallocated for Broadband PCS, Mobile Satellite Services, and Advanced Wireless Services. NPPD was displaced from these bands to make room for companies that provide consumer services similar to what Higher Ground LLC seeks to provide.”

“NPPD invested in the 6 GHz band, as have many others, to replace the 1.9 GHz and 2.1 GHz fixed bands we were removed from to meet our needs for long-haul microwave communications to carry our critical infrastructure communications network.” The company also noted that it has made a substantial investment in these networks and engineered them to a “99.999% minimum reliability.”

Bucking the System

Communications providers and public safety organizations have vehemently opposed the Higher Ground plan. In addition to a waiver (for mobile versus fixed use in the band), Higher Ground is proposing to use its own spectrum management database rather than participating with current licensees to coordinate spectrum use ahead of time. Because Higher Ground end users would be mobile, the traditional system would not be effective.

Rather, it proposes to “deploy a database-driven, permission-based network solution that will prevent harmful interference to terrestrial PtP systems in the 5,925 MHz-6,425 MHz band. The SatPaq network matches a SatPaq’s geocoordinates with a look-up table that incorporates the FCC’s Universal Licensing System database information for all C-band PtP licensees and identifies Protection Zones for the PtP receivers. Whenever the SatPaq network computes that there is any possibility of harmful interference to a PtP receiver, the SatPaq will be assigned to transmit on other frequencies that are available for operations or directed to transmit to a satellite in a different direction.”

Higher Ground?

The FCC has been all about spectrum sharing in recent years as it works to accommodate growing demands upon limited airwave resources. This mindset is at odds with utilities, which need 100% availability for their critical communications. In fact, some utilities are investing in their own dedicated spectrum as a hedge against future FCC licensing rule changes. Others are finding that the total cost of ownership for dedicated spectrum networks is competitive with unlicensed band solutions. Based on the high profile opposition that has emerged and the critical infrastructure at risk, it’s my opinion that Higher Ground LLC’s SatPaq network has relatively low odds of success.

 

What to Consider When Evaluating Networking Solutions

— November 4, 2016

Ethernet CablesAs the electric utility business evolves toward a bidirectional, multi-faceted model (i.e., the Energy Cloud), utilities’ need for robust, future-proof communications networks is paramount—but decision-making can seem fraught with risk. The wrong choice can quickly become a limiting factor as management teams explore new applications at the grid edge. But as distributed generation proliferates and overall energy usage falls, the need for that visibility will only become more critical—to customer engagement, demand-side management, transactional energy, load management, asset management, and more.

Traditionally, utilities have preferred to purchase their networking infrastructure, making large capital investments that they can put into their rate cases. Regulators have generally shown a strong preference for the lowest (upfront) cost approach.

Increasingly, however, utilities are evaluating the total cost of ownership (TCO) for various solutions. So where Solution A may be the most attractive in terms of initial costs, over the 10/15/20-year lifecycle of the network, Solution A may actually be more expensive—or worse, it may not be robust enough to support emerging applications.

Recently, Navigant Research was commissioned to do a TCO analysis comparing private spectrum options for utilities with other more popular networking technologies, including unlicensed radio frequency (RF) mesh technologies, existing point-to-multipoint technologies like that of Sensus, public cellular, power line carrier (PLC) technologies, and others.

As it turns out, the TCO for each of these can vary widely. The rural, low-density nature of cooperatives makes for a very different economic model than that of a municipal utility or a large investor-owned utility (IOU). The results of our analysis can be seen in the table below.

Total Cost of Ownership for Various Utility Networking Scenarios: 15-Year Time Horizon

TCO Study

(Source: Navigant Research)

 Is My Existing Network Adequate?

Advanced metering infrastructure (AMI) systems are now operated at utilities serving half of all United States meters. Many utilities will try to leverage those existing networks for distribution automation (DA) or other advanced applications. In some cases, this may be a cost-effective approach. In other cases, however, ongoing maintenance costs and denser equipment requirements will result in high costs over time. Repeater creep—where utilities must continuously add repeaters to a mesh network in order to accommodate growing capacity needs—is a potentially expensive outcome when existing AMI networks are tapped for newer DA functions like Volt/VAR control; fault location, isolation, and restoration (FLISR); or demand response.

Historically, utilities have not been fond of purchasing private spectrum, primarily due to costs, which public cellular service providers have driven higher as their bandwidth needs grow (thank YouTube on your phone for that). More recently, however, there are some private bands available to utilities that may provide a cost-effective solution. Our TCO analysis considered the 700 MHz A-band licenses, which are available today across much of the United States for a relatively modest price/MHz POP (population unit).

Private spectrum ownership is now an affordable option—in some cases, the most affordable option—for a utility looking to deploy a variety of DA use cases across a large or varied territory. When used for a combination of AMI, DA, and even substation connectivity needs, the control and flexibility that private spectrum offers can be very attractive.

For further information on the Navigant Research Total Cost of Ownership Analysis, contact Richelle Elberg. For further information on the regional availability of licensed spectrum, contact Robert Finch at Select Spectrum.

 

Ubiquitous Broadband vs. States’ Rights—and What It Means for Utilities

— September 26, 2016

Ethernet CablesThe Federal Communications Commission’s (FCC’s) net neutrality rules were upheld earlier this year, though challenges are likely to take that fight all the way to the Supreme Court. However, the Commission recently suffered a setback on another broadband-related front. In February 2015, the FCC issued an Order preempting state laws that restrict the growth of municipal broadband networks beyond their borders. But in August, the US Court of Appeals for the Sixth Circuit reversed that Order, giving states the right to block muni broadband expansion.

The original Order came after two municipal electric utilities—EPB Chattanooga in Tennessee and the City of Wilson in North Carolina—petitioned the FCC to remove restrictive state laws that prevented them from extending their broadband network to areas outside of their utility territory. Such rules exist in some 19 US states, thanks largely to lobbying efforts on the part of incumbent telecommunications and cable providers. Given the relatively high percentage of rural areas across the country where broadband service has limited availability (or is so slow as to hardly qualify as broadband), this reversal flies in the face of the government’s ubiquitous broadband goals.

Energy Superhighway

I’ve been urging utilities to consider the provision of broadband services (via fiber-to-the-meter, 4G LTE, private licensed spectrum options, and/or, eventually, 5G) as the way to financially justify a territory-wide, high bandwidth, low latency network. Said network, dubbed the Energy Superhighway in my recent white paper, can support not only smart grid applications like smart metering and substation and distribution automation, but also smart city applications (lighting, waste, parking, etc.) as well as EV charging station networks and smart solar management. It’s future-proof, unlike the networks utilities tend to build in an ad hoc, application-centric, silo-based manner.

Many of the emerging technologies mentioned above are a long way from being widespread in most geographies. A utility’s ability to offer Triple Play (video, voice, and broadband) services—much like EPB has so successfully done in Chattanooga—supports the economic equation in the near-term while allowing the utility to aggressively plan for the more dynamic, two-way energy economy of the future.

The utilities in the suit (or the FCC) may well appeal this recent reversal, but the conflict between federal goals for broadband connectivity and states’ rights proponents is sure to drag on, to the detriment of both utilities (and other Internet of Things-centric verticals) and consumers.

 

Meters Are Sensors and Sensors Are Meters—and It’s All IoT

— August 30, 2016

Power Line Test EquipmentOn August 11, Hazelwood, Missouri-based smart metering system vendor Aclara announced it acquired the smart grid business of Tollgrade, a provider of distribution grid sensors and software for monitoring and analytics. The deal comes just 8 months after Aclara acquired GE’s electric metering business, and all of this in the wake of its own sale to Sun Capital Partners in 2014.

It’s no surprise that Aclara is broadening its portfolio horizons. Upside potential for Aclara’s legacy technology—power line carrier (PLC) communications for smart meter data transfer—is on the wane. While still popular with low density utilities such as rural cooperatives, PLC isn’t as strong a platform for some of the newer smart grid applications that utilities want their advanced metering infrastructure (AMI) networks to support. Aclara has more than 14 million meters in the field and has been looking for growth opportunities since before its sale to Sun Capital.

Aclara has ventured into software, including solutions in the customer engagement and asset planning realms. It also offers several wireless communications solutions as an alternative to its enhanced Two-Way Automatic Communications System (eTWACS) PLC offering. These include cellular solutions and its Synergize RF point-to-multipoint system for utilities. But with the addition of GE’s meter business and now a leading line sensor/grid monitoring solution provider, Aclara has (or will have, presumably) a far more integrated set of products to offer. That means greater customer retainment.

The LightHouse product line also provides Aclara with an entry into the investor-owned utility (IOU) market where it has concentrated its efforts—Tollgrade has deployed its LightHouse system with DTE, Duke Energy, Toronto Hydro, and Western Power in the United Kingdom. In theory, Aclara can now better promote its various AMI solution sets to electric IOUs while marketing the LightHouse distribution monitoring solution to its sizable installed base of cooperatives and munis. Aclara historically has had a sizeable presence in the IOU marketplace with its gas and water AMI systems, with millions of endpoint systems deployed with customers in states including California and New York.

It’s All About the Smart

What makes a grid smart is the overlay of communications and software solutions that allow formerly manual controls to be automated. While Aclara was offering a piece of that smart equation with its legacy communications system, it now offers a broader array of solutions to smarten up not only the meters at the very edge of the grid, but also feeders throughout a distribution network.

The line sensor market hasn’t exactly taken the world by storm in the last few years, but it has shown promising traction more recently. Where the devices used to be expensive and analytics solutions (from which the return on sensor investments really come) were nascent, today’s costs are lower and the ways that real-time operational data can be used are growing exponentially. Navigant Research expects the global installed base of overhead line monitors to grow from a couple hundred thousand in 2016 to around 1.7 million by 2025.

Installed Base Overhead Line Monitors by Region, Worldwide: 2016-2025

Aclara Smart Meters

(Source: Navigant Research)

Generally, we don’t expect the overhead line monitor business to reach the same levels of penetration as, say, smart meters. They’ll be used on particularly troublesome feeders or where there are high levels of distributed solar wreaking havoc at the grid edge.

The Internet of Energy

What Aclara is doing by consolidating various sensors types—and a meter is just another sensor in the grid—into its product line is demonstrating its commitment to going beyond meter reading and boldly into the broader Internet of Things—or Energy—to make its platform more valuable and deepen its reach with utility decision makers. I wouldn’t be surprised to see more announcements from Aclara, perhaps related to software or analytics that leverage the underlying network and devices now incorporated in the company’s stable of products.

 

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