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Network Interoperability Is Key to Success

As operational and information technologies converge, enabling a much broader range of applications and opportunities than utilities traditionally have worried about, the premium will be on making systems multi-purpose and fully interoperable. That will require much more integrated, long-term planning on the part of energy companies.

As information technology (IT) and operations technology (OT) converge in the smarter grid of the future, network interoperability will be the starting point and precondition for all else—a power delivery system that includes or supports virtual power plants, plug-in electric vehicle charging and distributed renewable generation integration, among other features. In the shorter term, convergence will bring benefits through streamlined network administration.

The successful convergence of IT and OT will be dependent on a long-cycle effort to establish intelligence throughout the grid and out to its edge. As sensor and communication networks become interoperable at all levels, utilities will be able to react more quickly to new business opportunities and regulatory requirements, and adapt to changing energy consumption patterns and product choices in real-time.

Historically, utilities have chosen a communication network on the basis of whether it adequately supports a specific application. Where possible, to be sure, considerations include the goal of being able to leverage the technology in the future, for other applications as well. But the risk in this approach is that the network is not treated as common infrastructure but rather is aligned with just one primary business unit—customer operations, distribution or transmission, for example.

Now, with IT groups pressured to do more with less, leveraging the common infrastructure will be essential to reach the best possible return on investment while maintaining maximum flexibility, taking into account real uncertainties as to how the smart grid will evolve.

Industry studies, however, show that a rather large fraction of utilities have no overarching, long-term strategy to beef up communications to handle major innovations like advanced metering and distribution automation. In interviews with utility executives in North America, Europe and Asia, IDC found that close to 40 percent were still developing such plans, and that 20 percent intended to stick with the traditional approach of aligning communications network solutions with separate business units.

Meanwhile, regulators considering requests for electricity rate hikes increasingly are expecting utilities to economize on communications costs by adopting multi-purpose systems. Among others, Southern California Edison and Central Vermont Power have been told that approval for rate increases would be conditional on their having communications assets serve several operational and business units.

Such regulatory and business requirements are all the more daunting in light of the wide variety of communications technologies that are available. These include, at the physical level—where the bulk of infrastructure investment will be made—WiFi, Zigbee, WiMax and IEEE 1901. At the network level, the next-generation Internet Protocol, IPv6, continues to gather momentum. As it becomes ubiquitous, the ability to offer quality-of-service options will be essential to business success.

Driving IT and OT data convergence is the need to bring together real-time and non-real-time data as new value centers emerge, with implications for corporate profit as well as the public interest. Forward-looking utilities will embrace and promote changes in end-user behavior—that is, they will examine their existing programs and plans in the light of growing consumer awareness of costs and efficiencies, as well as actual and anticipated government initiatives regarding grid security, carbon caps, and other “green” objectives.

Consider the impact that just the big-box retailers like Home Depot or Walmart can have as demand-response aggregators or rooftop solar energy generators. Home Depot has about 2,200 U.S. stores and Walmart 8,400.

A utility needs to select a system of distribution automation that will also support advanced metering; but the additional requirement of supporting in-home technologies already is looming on the horizon. Relevant applications requiring communications support will include automated meter reading, outage management systems and demand-response load control.

Bear in mind that making all such systems interoperable is not the same as introducing an "open" or a standardized infrastructure. Network interoperability lays emphasis on capability harmonization in a multiple network technology environment, both from within and outside a utility's IT walls. It supports end-to-end data quality and security, network system performance, and application service provisioning and management.

In view of increasing cybersecurity requirements, network convergence will be an especially challenging mission for most organizations. Tens and hundreds of billions of dollars in legacy power equipment will need to be updated and retrofitted to achieve a high degree of backward compatibility. The long life cycle of power equipment and the legacy networks that support them make a network convergence strategy all the more essential to create a road map for the smart grid.


  • Marcus TochiaMarcus Torchia is research manager of intelligent grid strategies at IDC Energy Insights. He has 15 years of experience helping utility end-users, technology vendors and service providers optimize technology and business planning decisions for intelligent grid initiatives. Prior to joining IDC, he worked at the Yankee Group on its Enterprise Applications and Mobile Solutions team and for the Nokia Research Center's Incubation Group.

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About the Smart Grid Newsletter

A monthly publication, the IEEE Smart Grid Newsletter features practical and timely technical information and forward-looking commentary on smart grid developments and deployments around the world. Designed to foster greater understanding and collaboration between diverse stakeholders, the newsletter brings together experts, thought-leaders, and decision-makers to exchange information and discuss issues affecting the evolution of the smart grid.


Clark W. GellingsClark W. Gellings, a fellow at the Electric Power Research Institute, has had a long career in technical management at EPRI, serving in seven ... Read more


Marcus TochiaMarcus Torchia is research manager of intelligent grid strategies at IDC Energy Insights. He has 15 years of experience helping ... Read more


Jean-Philippe FaureJean-Philippe Faure is chairman of the IEEE 1901 Working Group, a member of both the IEEE Standards Association Standards Board and IEEE ... Read more


George ArnoldGeorge W. Arnold is national coordinator for smart grid interoperability at the National Institute of Standards and Technology. He joined ... Read more


Wanda RederWanda K. Reder is chair of IEEE Smart Grid, immediate past-president for IEEE Power & Energy Society (PES), and has served on the IEEE ... Read more