Navigant Research Blog

Itron Utility Week: Beyond Smart Meters

— December 1, 2014

Nearly 1,000 executives from the water, gas, and electric utility industries gathered in San Antonio between October 17 and 24 to discuss “resourcefulness” – Itron’s term for smarter grid, water, and gas utility technology and solutions – and share best practices.  The conference featured a Knowledge Center showcasing the solutions offered by both Itron and its partners, and dozens of panel sessions covering five tracks: Energy Efficiency and Conservation, Data Management & IT, Advanced Measurement & Communications, Smart Grid, and Analytics & Applications.

The opening general session featured a fascinating keynote address by Scott Klososky, principal at Future Point of View, on “Achieving Humalogy” (“digital Darwinism” and how organizations must evolve to stay relevant), and a killer poetry slam by David Bowden entitled
“Dead Leader Walking” – providing a millennial’s take on management (you can watch the keynote here, skip to 1:23:00 to view the slam).

In the Fog

Itron showcased its new grid edge intelligence solution, Itron Riva, at the meeting.  Itron Riva leverages open standards and Cisco’s IOx Fog computing platform to support Internet of Things functionality, including distributed computing power and control and analytics for automated decision-making at the network edge.  Itron Riva also delivers an integrated, hybrid radio frequency/power line communications (RF/PLC) network, which dynamically selects the best network path for the environment.  Itron Riva has been tested and debugged in a Hong Kong deployment with CKP Power.

Itron notes that the hybrid architecture means the system can flexibly switch from the RF solution (in the winter, for example, when foliage isn’t blocking the path) to PLC (in the summer).  The solution is also good for utilities with both rural and urban environments to cover.

At its Alliance Briefing, the president of Itron’s electricity group, Mark de Vere White, shared his insight on how the smart grid market is shaping up.  De Vere White noted that, while the North American market had slowdowns post-American Recovery and Reinvestment Act (ARRA) funding, the company sees that turning around now, and added that managing solar is a high priority.  Globally, Itron is “very optimistic” about 2015 and anticipates smart grid market acceleration in 2016 and 2017.  Itron’s ERDF Linky deployment in France will begin in the second half of 2015.

Spanning the Globe

In the Asia Pacific region, Itron is seeing activity in Australia, New Zealand, Singapore, Thailand, Japan, and Tonga.  De Vere White also noted growing Latin American interest in Brazil, Mexico, Columbia, Ecuador, and Chile.

Other topics emphasized at Itron Utility Week included smart city technology and how smart grids and smart cities intersect (including a presentation by Amy Aussieker of Envision Charlotte), as well as Itron’s new managed services offering, Itron Total Services.

 

No Love for Utilities in FCC Spectrum Auctions

— November 26, 2014

As a wireless industry analyst who spent years following the FCC’s monetization of spectrum via competitive auctions, I’ve been struck by the dramatic increase in spectrum values implied by the ongoing Advanced Wireless Services (AWS) Auction in Washington, D.C.  The sale of more than 1,600 licenses nationwide, which began November 13, has now raised more than $38 billion – a tally that has risen by more than $2 billion since I started writing this blog!  That’s 2 to 3 times the total analysts were calling for prior to the sale and implies values of more than $2 per megahertz per population unit (MHz POP) for paired licenses; some large markets are already going for $5 per MHz POP.

(Value per MHz POP is a metric commonly used to compare the values of various spectrum licenses; it is equal to the price of the license divided by the total number of MHz for a given license divided by the population of the licensed market.  Paired licenses come with two swaths of spectrum, one each for uplink and downlink, and are typically more valuable than unpaired licenses, which have only one spectrum swath.  For detail on the licenses currently up for sale, click here.)

To put that in perspective, in the last major spectrum auction, held in 2008, spectrum values leveled off at $1.22 per MHz POP.  And while the bidding is blind – we don’t know which companies currently hold the top slot for which licenses – rest assured that Verizon and AT&T are near the top of that list.  Smartphone penetration and data usage have grown stunningly over the past 6 years, and the top wireless carriers are willing to pay (almost) any price to ensure they can continue to meet demand.  Without adequate spectrum, they simply won’t be able to keep up.

What about the Grid?

In my current role, as a smart grid communications analyst, I can’t help but wonder what happened to the FCC’s oft-discussed plans to allocate spectrum to electric utilities for smart grid connectivity.  Proceeds from the current auction will go to support build out of a nationwide public safety communications network at 700 MHz; public safety organizations were awarded those licenses, free of charge, a few years ago.  The so-called FirstNet initiative is expected to provide interoperable communications for first responders (police, fire, EMTs) – but apparently, the FCC doesn’t consider the electric grid to be critical to public safety.

The Utilities Telecom Council (UTC) has lobbied for years to convince the Commission that the power grid nationwide is critical infrastructure, and that utilities struggling to make upgrades to ensure improved reliability and efficiency are in need of dedicated spectrum to enable the communications between new grid devices.  But it appears the last time the FCC seriously considered such a move was in 2012.  At that time, the Commission was dismayed by the underuse of 4.9 GHz unlicensed spectrum and considered awarding the licenses to utilities.  But in the end, it didn’t.  In 2009, the UTC asked for 30 MHz of dedicated spectrum, also to no avail.

The DIY Option

Some utilities have owned their own spectrum licenses in the past – but that was the exception, not the rule.  San Diego Gas & Electric had plans to build its own communications network using wireless communications services (WCS) spectrum a few years back, but it opted instead to sell the licenses for the San Diego market to AT&T.  Many utilities across the United States have used unlicensed 900 MHz spectrum for their smart meter deployments, and many cooperative utilities own licenses for the 220 MHz band.  Smart grid networking system vendor Tantalus offers a system that leverages that spectrum for connectivity in difficult terrain.

But utilities have been left on the sidelines as the government works to maximize spectrum utilization, promote rural broadband access, and ensure public safety organizations have the communications they need in times of disaster.  But a resilient, reliable, efficient power grid plays a major role in our nation’s ability to respond to natural and man-made disasters.  That would seem to be worthy of dedicated spectrum.

 

C3 Wins Big with Italy’s Enel

— October 14, 2014

While the details are slim, C3 Energy has revealed that it has been selected for a $64.4 million deal to provide professional support services and software as a service (SaaS) solutions to Italy’s largest electric utility, Enel.  Of that sum, $18.3 million will be subcontracted, leaving about $46 million in deal value for C3.  The news was published in the EU’s Tenders Electronic Daily (TED).

C3 is a Redwood City, California-based utility analytics solutions provider started by Tom Siebel, founder of Siebel Systems.  Enel has some 32 million meters, implying a deal value of around $2 per endpoint, assuming the company’s entire grid is included.

The news follows on C3’s May win with Baltimore Gas and Electric, which is deploying the company’s revenue protection and advanced metering infrastructure (AMI) operations analytics solutions across its 2 million meters.  In June, Northeast Utilities contracted with C3 to deploy its Energy Customer Analytics platform.  The customer engagement platform will inform customers about the specifics of their energy use and provide custom recommendations for energy conservation.  Northeast Utilities has 3.6 million customers across Connecticut, Massachusetts, and New Hampshire.

Second Act

The Enel deal, however, dwarfs these stateside contracts, and should go a long way toward establishing C3 in the European utility market.  Enel’s was the first major nationwide AMI program worldwide; the rollout began in 2001 and deployment was completed in 2011.  This new contract provides further validation of the C3 solution, which was only launched in 2009.

C3’s solution is notable for its SaaS model, which hasn’t been fully embraced by utilities.  Over the past year or so, however, the model has been adopted by a number of big utility vendors, such as Itron, with its Itron TOTAL solution.  AT&T is also promoting a managed service offering for AMI.  C3 says that utility silos are breaking down and that its solution’s machine-to-machine learning capabilities are ideal for applications like predictive maintenance.  The company also offers analytics solutions for asset management, cyber security, and demand response, among others.

Perhaps the larger lesson from the Enel news is that Tom Siebel – who became a billionaire after selling his Siebel Systems to Oracle – is no one-hit wonder.  Anyone who can survive being stomped and gored by an elephant is not to be taken lightly.

 

Ericsson Resurges in Smart Grid Market

— October 7, 2014

Swedish telecom giant Ericsson was fairly active in the smart grid communications market a number of years ago; in particular, the company was involved in a number of WiMAX- and LTE-based smart meter deployments in Australia.  More recently, Ericsson has been notably absent from the space, especially in North America.  It looks like that hiatus may be ending.

On October 1, Ericsson closed on its buy of Newton, Massachusetts-based Ambient Corp. for $7.5 million.  Ambient will be integrated into Ericsson’s Global Services division.

Ericsson has reportedly also hired a former DNV EMA utility expert and acquired a grid management company in recent months; competitors say they are starting to see more of Ericsson in the North American market.  The company is a major supplier of LTE infrastructure to the wireless industry; it appears likely that the Ambient buy will support additional efforts to promote the use of the 4G wireless technology for smart grid networks.

Lost Luster

Ambient made a splash in the smart grid comms arena a few years back when it was awarded a product award at the Utilities Telecom Council (UTC) 2011 Telecom Forum. The UTC Product Awards is an annual competition highlighting the best in critical infrastructure industry technology.

Ambient’s smart grid communications solution combines multiple communications technologies – including RF mesh, cellular, power line communications (PLC), and Wi-Fi – into a single node, providing flexibility to utilities needing a variety of solutions due to topology or coverage issues.  In 2013, Ambient announced its nodes had been certified for the Verizon LTE network, and by the middle of that year Duke Energy had deployed nearly 200,000 of those nodes.  In mid-2013, Ambient also announced a contract with Con Ed for commercial and industrial (C&I) metering.

Ambient proved unable, however, to leverage the early hype around its solution and its Duke relationship for sales growth.  The company, which was publicly traded prior to its July bankruptcy filing, reported less than $600,000 in revenue in the March 2014 quarter, down from nearly $5 million in the prior year period.  The company lost nearly $18 million in 2013 on sales of $11 million.

Future-Proof?

Ericsson’s interest in promoting LTE’s place in the smart grid communications market isn’t surprising.  While LTE is generally considered an expensive solution for smart grid applications, utilities are increasingly worried about the longevity and flexibility of their communications networks – and LTE provides low latency, security, and signal prioritization features that should ensure its ability to handle just about any smart grid application that’s deployed in the next 20 years.

Both AT&T Wireless and Verizon Wireless are aggressively courting the utility vertical with their cellular solutions, including LTE, and one meter vendor representative recently told me that it sees LTE as the future of smart grid communications.  If that’s the case, it seems Ericsson will be joining the competitive fray.  And with the backing of Ericsson, Ambient could be able to get some much needed traction in the marketplace as well.

 

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