The foundation of power

It says something of the potential of Smart Grid – whereby energy distribution networks are injected with information technology features to make metering more accurate and management more dynamic – that it is often compared to the defining technological development of the current era.

A US-based investment adviser, for example, recently remarked, “We believe that this emerging sector could become the equivalent of the Internet boom of the 1990s.”

The parallels between Smart Grid and the Internet are numerous; much of the technology – and indeed the personnel – involved in the Smart Grid ‘revolution’ were developed during the Internet explosion. And like during the early days of the Internet, the US has so far led Smart Grid adoption.

But according to Stephen Cunningham, UK chief executive of Swiss smart meter manufacturer Landis+Gyr, it is a mistake to see US utility companies as ‘smarter’ than their European counterparts: “In the US, they’ve got a lot more smart metering deployed than we have, but their smart meters are much less smart and their smart deployment is much less smart.”

A complex market

The reason for this is the relative simplicity of the US’s energy industry. “In the US, you typically have one supplier that provides all of the electricity or gas to a region, whereas in the UK all six suppliers can access the same customers,” Cunningham explains. “Plus, our energy industry is vertically disassociated; generators, network operators and energy suppliers are all separate entities. And we have very severe competition; there’s no other country in the world where you can change supplier every 28 days.”

For that reason, Cunningham argues that the “Smart Grid in the UK will probably be the most complex in the world. The complexity of demand means that we’ll have to answer a lot of the questions [about how Smart Grid will work] here first.”

The foundations of the UK’s Smart Grid were laid in March 2010 when British Gas announced plans to build its own smart infrastructure. The company’s announcement that it will install smart meters in two million homes by 2012 – creating 2,500 jobs as it does so, the company says – proved that the future of Smart Grid is not reliant on government.

British Gas has announced a number of specifications that it plans to adopt, in the hope that competitors might follow suit, resulting in a standards-based, highly interoperable Smart Grid that will allow customers to move between suppliers quickly and easily. 

This, says Cunningham (whose company will provide British Gas with smart meters), shows that the UK is at the cutting edge of Smart Grid. “What we’re doing in the UK in terms of publishing the standards, the interface specifications, the extensions and the security protocols – no other metering industry in the world has ever done that.”

However, there remain a number of unanswered questions surrounding Smart Grid, not least of which concerns the communications infrastructure that will transfer information from the meters to the utility suppliers. British Gas has selected Vodafone to provide SIM cards for the meters and a GPRS-based ‘backhaul’ network, but according to Cunningham, “They are very clear that they expect there to be other forms of communication in future, and we are designing our meters to cope with those other forms.”

Communications alternatives

Last year, US-based Smart Grid networking vendor Silver Spring called on the UK communications regulator Ofcom to allocate a band of radio frequency spectrum to a wireless technology called RF mesh. 

“Radio frequency mesh gives you a peer-to-peer network, where every node communicates wirelessly with all of its neighbours in the area,” explains John O’Farrell, vice president of business development for Silver Spring. “All the nodes form a dense mesh that can cover an entire area in a highly redundant way, as you have multiple different routes to any particular node in the network.”

Silver Spring argues that the viability of Smart Grid in the UK is impaired by the fact that there is no radio frequency on which RF mesh can be used, unlike in the US where, O’Farrell claims, “it is the overwhelming choice of the utility industry” for Smart Grid communications infrastructure.

The reason for this is that RF mesh can be used to provide more complete and consistent coverage than the mobile telephony network, O’Farrell argues. “If you are using a traditional mobile phone network for Smart Grid, you need to get a reliable mobile phone signal from the base station to every smart meter,” he says. “In a mesh network, you only need to get a signal to a few of the points in the network, and then it travels from point to point within the mesh.”

There are other communications technologies competing to become the backbone of Smart Grid. In March 2010, networking giant Cisco made a significant investment in Grid Net, a company whose technology employs WiMax to link smart meters, while other vendors champion broadband power line technology, where data is transferred through the actual utility network infrastructure itself. The stiffest competition for all of these, in the short term at least, comes from the traditional mobile network, as the British Gas example proves.

Cost may well prove to be the deciding factor; energy suppliers do not stand to gain much, if anything, in extra revenue from Smart Grid so they will look for the cheapest option. Which option is cheapest is not yet obvious, however. O’Farrell argues that using mobile networks will involve costly upgrades to the meters as they cycle through GPRS, 3G and 4G networking standards; unlike some of the alternatives, however, the infrastructure is already there.

The potential functionality of the Smart Grid could be at stake. Proponents of full IP-based wide area networks for Smart Grids argue that many of the benefits to suppliers, such as real-time pricing and dynamic generation management require speeds of data transfer that some networking technologies simply cannot uphold. Like the Internet, however, the Smart Grid is likely to comprise different networking technologies simultaneously, and those technologies will evolve over time.

 This is just one of many ways in which lessons learned from the development of the Internet will help guide energy suppliers, governments and consumers as they make Smart Grid decisions. “It’s not like we’re reinventing the wheel,” O’Farrell remarks. “We’re just building the Internet for energy.”

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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