Navigant Research Blog

Sensus Lands Great Britain Smart Grid Communications Deal

— August 14, 2013

Raleigh, North Carolina-based Sensus was the only American company to win a piece of the long-awaited Great Britain smart meter deployment contracts, which were announced on August 14.  The U.K. Department of Energy and Climate Change (DECC) selected  Arqiva Limited as the preferred bidder to provide the smart metering communications service for Northern England and Scotland.  In conjunction with Arqiva, Sensus will provide the long-range radio technology for the communications network.  DECC estimates the value of the communications service contract to be £625 million ($828.5 million) over 15 years.

Sensus’ FlexNet technology will deliver data from both gas and electric meters at 10.2 million locations across the region, or between 16 million and 17 million meters.  Sensus will be providing base stations and long-range radios that will communicate with a hub at each meter location.  Base stations will be mounted on Arqiva-owned communications towers; Arqiva owns 8,000 cellular towers and several thousand radio and television broadcast towers across the U.K.

Sensus says the complexity of the region to be served was a big reason for its selection.  Covering both rural and urban areas, the district reaches from the Highlands of Scotland to the City of Manchester.  Sensus reports a range of up to 40 miles in rural locations for its Flexnet wireless network, and 2 to 3 miles in urban and suburban locations.  Cellular provider Telefónica UK was chosen for the more urban central and southern region communications contracts.

FlexNet is a point-to-multipoint private radio frequency (RF) solution.  In the United States, FlexNet operates on licensed 900 MHz spectrum; in the U.K. the solution will operate over licensed 400 MHz spectrum owned by Arqiva.  The use of licensed spectrum allows for higher power transmission than unlicensed communications networks, and is generally not subject to the interference that may occur in unlicensed systems.  The system uses a star topology, with nodes communicating with a centrally located tower.  Each node typically sees more than one tower, allowing for network redundancy.

Big Win

The solution was designed to meet DECC’s service level requirements and has the ability to prioritize data through channelization.  The FlexNet system can support data throughput of 1 megabit per second.

The solution will support pre-pay and load-shedding applications, and will also facilitate British consumers’ ability to change retail energy providers in the deregulated market.

The deal is a very big win for Sensus and positions the company well for future business in Europe.  Sensus says that it already serves 475 electric, gas, and water utilities worldwide.  Previously, however, the bulk of Sensus’ business was in North America.  PECO in Philadelphia, for example, is deploying the FlexNet communications network in its 1.8 million meter smart grid program and plans a wide range of distribution automation applications over the network, in addition to traditional AMI applications.

Navigant Research estimates that point-to-multipoint communications nodes accounted for just 2% of total smart grid communications nodes worldwide at the end of 2012.  With Sensus’ significant entrée into Europe, however, it’s possible that share may grow in coming years.


Utilities Nourish Smart Grids With Fiber

— August 14, 2013

Discussions of communications networks for smart grid initiatives tend to focus on private, radio-frequency (RF) mesh solutions in the United States, or narrowband-power line communications (N-PLC) in Europe and Asia.  As utilities look ahead to a truly integrated and robust smart grid, though, more and more demands will be placed upon the underlying communications network.  The need for high bandwidth, low latency, signal prioritization, and high security will only become greater over the course of the next decade.

At the same time, the integration of distribution automation (DA) applications with advanced metering infrastructure (AMI) is highlighting the limits of many AMI communications networks to support critical DA applications today. (For more on AMI/DA integration, see Navigant Research’s forthcoming report on Integrating Distribution Automation Applications with Advanced Metering Infrastructure.)  Limits, that is, unless the network is built upon fiber optics.

“Fiber-to-the-meter” isn’t a concept that many utilities talk about, primarily because of the very high cost of deploying fiber.  Passing a home with fiber can range from $700-$800 per home in densely populated areas to $4,000-$5,000 per home in lower density areas.  Despite the expense, a number of utilities in the U.S. have decided to deploy fiber to the meter—and their smart grids are among the smartest in the nation.

Generally speaking, municipal utilities have led the way in installing fiber optics, justifying the investment by offering a triple-play service (voice/video/data).  With consumers willing to spend upwards of $100 each month or more for triple-play services, the utility can justify the investment apart from the improved efficiency of its grid.

No Competition

Electric Power Board (EPB) in Chattanooga, Tennessee, is the largest such fiber-to-the-meter deployment in the U.S. to date, and the reported results have been impressive.  EPB’s 6,500-mile fiber network provides 5 millisecond (ms) speeds, enabling a full suite of DA applications, including automated self-healing and fault location, isolation, and service restoration (FLISR).

EPB reports that when remnants of Tropical Storm Lee hit Chattanooga in September 2011, even though its system was only about half deployed and less than 20% was automated, nearly one-third of homes and businesses in its service area avoided outage altogether or experienced less than a 2-second interruption, thanks to the automation built into the network.  In 2012, EPB’s average interruption duration index (SAIDI) fell 24% from 109 minutes to 82.5 minutes.  EPB also says its AMI applications are helping it avoid truck rolls and more easily verify restoration.  The robustness of fiber means that the number of applications the utility may now integrate is virtually unlimited—no other smart grid communications network today offers that kind of capacity (although 4G wireless may get there).

Unfortunately, fiber isn’t an option for all utilities today, and not only because of the costs.  Sixteen states have enacted legislation to prevent electric utilities from competing against franchised video service providers (cable and DBS); in other locales, the cable industry has filed lawsuits to stop the competition.  Without the monthly triple-play service revenue that fiber enables, many utilities will be unable to justify the expense.  Longer-term, cooperation among the cable, telecom, and utility industries might result in the ultimate in smart grid and robust communications and entertainment infrastructure—but that will no doubt require regulatory intervention.


Why IP Will Be the Language of Smart Grids

— July 10, 2013

Having completed research for Navigant Research’s forthcoming report, Smart Grid Communications Security, I’m now into the writing and modeling phase.  As you might expect, the topic of IP-based communication came up a lot during the interviews.  There is nothing approaching consensus about IP in Smart Grids, and everyone has an opinion.  Whenever I’m having trouble getting someone to talk, all I have to do is mention either IP or Linux, and then the floodgates open.  Dirty trick, I know, but it works.

So what do people think about IP in smart grids?  Well first, let me clarify that I mean all of smart grids.  Not only smart metering, but transmission networks, substations, and distribution networks too.  There appear to be three schools of thought:

The first school holds that because IP is widely available and well-known, it is a good thing.  There are lots of technicians, and plenty of commercial off-the-shelf (COTS) products available to support it.  IP’s near ubiquity is a giant leap in the direction of interoperability.  I will remind readers at this point that utilities tell me that they want more than interoperability; they want interchangeability.  In this view, proprietary protocols merely hinder progress.  In the worst case, proprietary protocols become handcuffs, making exit costs so high that utilities may be stuck forever with a given vendor.  Having been a product portfolio manager in a past life, I can assure you that this is no accident.

The second school holds that because IP is widely available and well-known, it is a bad thing.  Such a widespread installed base means that there are many more people who understand how to attack IP, and many more COTS tools to attack it with – although sourcing those tools can be trickier and will probably land you on some intelligence agencies’ watch lists.  Personally I find this viewpoint overly paranoid – and keep in mind, as a cyber security professional, I am paid to be paranoid.  It takes an awful lot for me to think of something as too paranoid.

Speaking Pragmatically

The third school simply holds that IP is widely available and well known, full stop.  Therefore, it will eventually become the dominant protocol for all smart grid communications.  Whether this is a good thing or a bad thing is irrelevant to these pragmatists.  In their view, IP is going to happen, so let’s plan for it, rather than arguing about whether or not it is a good thing.

Me?  I’m a pragmatist.  Sure, there are complications.  Some vendors’ IP implementation is really just their own proprietary protocol riding on top of IP.  Securing IP does not provide any application-level security.  And very old legacy devices cannot deploy IP, but they may still have 20 years’ service life remaining.  There are approaches for that, but none completely satisfactory.

Nevertheless, IP is coming to your smart grid.  Count on it.  Yes there will be more attackers and a more familiar attack surface.  But so what?  Stuxnet proved that security-by-obscurity really is a myth.   At least with IP as a standard approach, we shall all speak the same language.  Surely that’s better than the alternative.


Utilities Face Public-Private Network Divide

— December 11, 2012

In mid-October, San Diego Gas and Electric (SDG&E) regulatory filings indicated that the company has changed plans to deploy a foundational private WiMAX network as part of its ongoing smart grid deployment, opting instead for a mix of various public and private network systems.  This move is noteworthy because SDG&E is a leader in adopting a comprehensive, integrated, smart grid communications strategy.  Its abandonment of WiMAX raises questions about the future of private 4G network technology for smart grid.  Pike Research has been bullish on the future of standards-based private wireless for smart grids, so naturally we’re asking ourselves the same questions.

Utilities have a longstanding preference for private wireless over public cellular (though this is often overstated as vocal proponents of private wireless usually also have pervasive public cellular deployments, especially for advanced metering infrastructure (AMI) backhaul).   However, for critical applications (such as distribution and substation automation), private networks are still considered more reliable and resilient in the face of disruptions, and in some areas, the regulatory preference for returns on deployed assets tilts the field toward private networks.  Private 4G technologies such as WiMAX offer a standards-based private solution with strong performance and are expected to displace the plethora of proprietary solutions available.  SDG&E, CenterPoint Energy, and Oklahoma Gas and Electric (OG&E), as well as many smaller utilities in Canada, were and are heading in this direction.

Smart Grid Communications Node Shipments (Excluding Smart Meters), As % of Total, North America: 2012-2020

(Source: Pike Research)

However, as SDG&E discovered, reserving guaranteed spectrum for such private networks is challenging.  SDG&E had earlier been a showcase customer of Arcadian Networks, which built a product offering around dedicated spectrum that covers most of the United States.  However, Arcadian failed to attract enough customers to convince its investors that such networks were the best use of their spectrum, and ultimately failed.  This is less of an issue in Canada, where WiMAX-suitable spectrum has been reserved for utility use, leading to greater usage.

Against some of these challenges, public cellular companies have more aggressively supported some of the bandwidth and service guarantees required by utilities, enabled by new capabilities delivered by their own 4G networks.  Public telecom carriers have been riding a wave of greater acceptance by utilities for AMI applications (both to the meter and for backhaul), but not all of these are considered mission-critical, at least from the perspective of immediate availability during an outage crisis.

Where will this lead? At Pike Research, we still see a strong trend toward adoption of open standards for public and private, wired and wireless network technologies, and the benefits of integrating these in a unified communications architecture rather than in separate application silos is too great to ignore.  The ongoing post-mortems of recent major storms, such as Hurricane Sandy, should help guide in the private versu public network resiliency debate, if utilities are willing to share their experiences.  We still see a strong future for private 4G wireless technologies but also strong growth of public 4G networks (40% CAGR, 2011-2020, for unit shipments into distribution automation and AMI backhaul applications in North America).   We’ve never said that there will be “one network to rule them all,” much to the chagrin of some network equipment vendors.  Diversity will remain the key defining attribute of grid communications networks long into the future.


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