Navigant Research Blog

Connecting Mobile Utility Field Crews

— April 21, 2015

pdvWireless, formerly known as Pacific DataVision, acquired $100 million worth of 900 MHz spectrum from Sprint in January. It is now preparing to roll out a two-way radio service and cloud-based mobile workforce management solution geared toward utilities and other dispatch-centric verticals. Motorola Solutions, Inc., the leading provider of two-way radio technology to utilities in North America, has invested in the company.

Ironically, pdvWireless is headed by Nextel founders Morgan O’Brien and Brian McAuley. Most of the licenses purchased by pdvWireless were acquired by Sprint in conjunction with its $30-plus billion purchase of Nextel in 2005. That move proved disastrous for Sprint, which has more recently been dismantling much of the former Nextel network and repurposing—or selling—the associated spectrum.


pdvWireless has raised more than $225 million over the past year and trades on NASDAQ under the symbol PDVW (as of February 3). Shares closed at $50 on March 31, up from $20–$25 per share paid by private investors in mid-2014. Once again, O’Brien is proving adept at creating value for investors with spectrum and push-to-talk (PTT) technology.

The company’s new two-way radio solution, dubbed DispatchPlus, will be deployed to 20 major U.S. cities, beginning in the northeastern and southern United States and later extending to markets further west. DispatchPlus is a next-generation PTT solution utilizing digital two-way radio technology integrated with pdvWireless’ proprietary cloud-based mobile resource management solutions, including worker tracking, status mapping, and intelligent call prioritization. The solution enables communications to be sent simultaneously to one or many recipients, whether the recipient is on pdvWireless’ two-way service, a cellphone, or at an Internet address.

Medium or Large

Motorola Solutions invested $10 million in pdvWireless in mid-2014 and has also paid $7.5 million in prepaid spectrum leasing fees. Historically, pdvWireless has made its solutions available through wireless carriers; the company has not yet generated revenue under its new service offering. Revenue for the nine months ended December 31, 2014 was $2.1 million, down from $2.6 million the prior year. The company’s new strategy is to become the nation’s leading private wireless carrier, dedicated solely to serving businesses and critical infrastructure entities.

Utilities appreciate PTT technology for their mobile work crews, and access to private—as opposed to unlicensed—spectrum is always preferred. But most large market utilities already have two-way radio systems, which can cost millions of dollars. With near nationwide spectrum coverage, I wonder if it wouldn’t make more sense for pdvWireless to focus on midsize markets—at least from a utility point of view.


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 the leading forms of communications thus far for smart meter connectivity across the pond.  Here in the United 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, though 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 European Union’s (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 that surely every smart meter vendor will watch.


Demand Response Will Improve EV Economics

— February 17, 2014

With EVs selling in the U.S. by the thousands each month, their collective impact on the grid is getting increasing attention from utilities that are looking to reward EV owners for helping to balance power supply and demand.  EVs give power providers a new resource for smoothing peak loads and contending with the rising amount of variable power produced by renewable solar and wind assets.

For several years organizations such as the SAE, IEEE, and SGIP have been creating standards to enable smart grid equipment to communicate with EVs and their charging stations. This “smart charging” technology will delay or ramp up vehicle charging in response to changing grid conditions, including through demand response (DR) programs.  According to Navigant Research’s Vehicle to Grid Technologies report, by 2020 EVs enrolled in commercial DR programs will be able to curtail up to 272 MW of peak load in North America, which will come in handy on those hot afternoons when power demand outpaces supply.

Utilities are slowly removing humans from the DR equation through automated demand response systems.  According to Navigant Research’s recently published report, Automated Demand Response , roughly $13 million is expected to be spent on ADR globally in 2014, with investment rising to $185 million in 2023.

ADR Spending by Region, World Markets: 2014-2023


(Source: Navigant Research)

EVs connected to charging equipment using service provider Greenlots’ software platform will be able to participate in demand response thanks to a software upgrade.  Greenlots announced last week that the OpenADR Alliance has certified its SKY EV charging platform as compliant with OpenADR 2.0b, a standard that utilities are rallying around to send pricing information and demand response signals.

Utilities compensate demand response participants when they voluntarily reduce their consumption, which in the case of EVs could include payments to “site owners” where the vehicles charge, automotive companies (which can aggregate the power consumed by EV drivers) and the vehicle owners themselves. While slicing the revenue this way reduces the money available to EV owners, the payments could reduce the cost of vehicle charging and make EVs a more attractive purchase.

For example, employers could offer free or heavily discounted EV charging to workers who agree to participate in the company’s DR program.  Electricity vehicle charging amounts to only 25-30% of the cost of gasoline to power a vehicle, and dropping the “refueling” cost to close to zero would shorten the payback of switching to electric drive.

In the future, utilities could take advantage of this new grid-to-vehicle communications platform to prevent transformer overheating, which is expected to be the most common problem for the grid caused by the proliferation of EV charging.  However, because of the cost of adding sensors to transformers that would detect stress, utilities are likely to wait until the current installed equipment fails before replacing it with EV-friendly technology.


EVs Integrate With the Smart Grid

— December 20, 2013

More than 1 million plug-in electric vehicles (PEVs) will be on American roads by 2017, according to Navigant Research’s Electric Vehicle Market Forecasts report, which in aggregate has the potential to increase or extend the peak load on the power grid.  However, thanks to new onboard technology for smartly managing vehicle charging, they will become a considerable asset to the power grid at little cost to utilities.

Automakers don’t want PEVs to be disruptive to the power grid, and they do want consumers to pay as little as possible for electricity; therefore, many companies are integrating technology to make their vehicles responsive to the grid.  For example, GM’s new 2014 Cadillac ELR includes hardware and software enabling the vehicle to receive and respond to grid pricing and performance data via the vehicles’ OnStar’s telematics system. The smart grid features on the ELR include:

  • Demand response: An API is included that will be used for a future opt-in service that enables customers to save money on energy costs by turning off charging in response to signals from the electric grid.  GM hasn’t said anything about if or how customers will be compensated.
  • Time-of-Use rates: Via OnStar, the ELR can receive dynamic time-of-use pricing from utilities and select and send a rate plan to the vehicle to simplify scheduling of charging times.
  • Charging data: GM will collect EV data, including locations, to direct customers to charging stations, while also allowing them to provide information to utilities about potential load scenarios.
  • Aggregated services: GM will enable ELRs to coordinate charging with energy aggregating companies to better match electricity demand to supply in a specific geographic area.

GM is not alone in adding grid features; Ford, Chrysler, and others are also looking to work with (and get money from) grid operators by tracking when, where, and how vehicles charge.  As described in Navigant Research’s recent report, Vehicle to Grid Technologies, the most popular vehicle-to-grid application will be demand response, in which energy customers voluntarily reduce demand when the grid is stressed.

Utilities will look with favor on PEVs because, unlike purchasing stationary energy storage to balance the grid, the batteries within the PEVs don’t cost the utilities anything; they only need to develop an adequate method of compensating vehicle owners.

The Cadillac ELR is a range-extended vehicle that can travel up to 37 miles on battery power alone, and up to 340 miles with the gas engine providing additional power to charge the batteries.  The ELR also comes loaded with safety features such as lane departure warning, forward collision warning, and other systems that are part of the suite of emerging autonomous vehicle features, which are described in Navigant Research’s Autonomous Vehicles report.  While other PEVs offer automatic regenerative braking or multiple settings that will slow the car and capture energy, the ELR includes small paddles on the steering column.  It will be interesting to see how consumers respond to braking by hand rather than by foot.

With a base price of “only” $75,000, the car isn’t much more expensive than the gasoline-powered Cadillac CTS-V Coupe ($64,900), and will compete with the $72,400, 265-mile range Tesla Model S.


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