A Smart Grid is Open – lesson learned

M2M, machine-to-machine communication, has for many years improved businesses operations and created new revenues for involved companies. Fleet management, transport logistics, building automation or waste management, just to mention a few examples, all contributes to a greener world and energy savings while increasing operational profits.

In Maingate's vision all products will inevitably be online. The benefits are so obvious that it is bound to happen and the Smart Grid is not exception.

In large parts of Europe, this winter has been colder than in many years. This is true for Scandinavia as well, though temperatures have in no way been extreme. The Swedish economy is based on heavy industries that, despite the financial crisis, show high output and consume huge amounts of electricity. Sweden's power production is based on hydro and nuclear, but as demand increases more expensive generation (such as oil and gas) is added and the demand is also met by import of coal based electricity.

When low temperatures increase demand beyond the point where low cost, domestic supply is sufficient, the result is an increased cost per kWh. This winter price increases have made the headlines with prices going up by as much as 3.000 percent during peak hours! Of course the average consumer doesn't pay electricity by the hour but even the monthly average for December was significantly higher than normal.

The regulation for Smart metering in Sweden was announced in 2003. The relatively low legal requirement was a correct monthly invoice based on actual metering data. Previously, monthly billing was based on estimated usage. The weakness with the enforced regulation is that many utilities invested in systems that aren't capable of anything but just meter readings. Had the regulator been more visionary, requirements could have included functionality to handle demand management, flexible tariffs and the flexibility/interoperability necessary to provide new services and meet future market demands.

When replacing 5,4 million meters it could have been expected that demand management was implemented, being a tool for suppliers as well as consumers to efficiently handle situations like this winter. The direct involvement of consumers, via tools and incentives to save energy some of the additional production sources would have been redundant with great accumulated savings as a result.

The major lesson learned is that Smart Grid/Smart Metering investments must be based on flexible and open systems ready for future known and unknown needs. It is an absolute must in order to protect the lifespan of the investment. Several countries across Europe are now poised to implement similar legislation. Smart meters are only one, albeit crucial component in the utilities infrastructure Smart Grid. Utilities are faced with a number of challenges - and opportunities - that has a direct effect on, and are dependent of, Smart Grids. Climate change, and EU:s agenda for mitigating this (the "20-20-20"), is one. Consumer activity in managing energy consumption is another. Micro generated energy, electric vehicles and growing demand for electricity still others.

M2M communication is a key component in Smart Grids. The palette of available applications is business critical and demands on communication are naturally high, be it security, availability or operational quality. And requirements will grow further as new applications and growing need for immediate access to information emerges.

Several lessons can be learned from the Telecom sector where open standards like GSM has been a major enabler for the extreme success of mobile telephony. Open standards attract new players and create competiveness, effectiveness and inventiveness that ultimately benefit end users. To date GSM, being the only true standard within Smart Grid, is the backbone for communication as well as the natural choice for scattered installations. Cellular networks provide communication based on the standard IP-protocol being 2,5G (GPRS), 3G or the coming 4G. This means that present and future installations can be mixed and seamlessly integrated without the need of modifying the Enterprise systems.

Another big advantage of using this open infrastructure is that it is cost efficient. Shared by millions of other users this managed service includes all elements of planning, developing, building, maintaining and operating an infrastructure.

The requirements in M2M are different from normal mobile services even though the underlying technology is the same. In order to do a successful implementation followed by years of operation, the M2M communication provider must support the whole life-cycle of Smart Metering. Having provided communication services for 12 years including 4 million meters we also know that an early involvement of the provider is a prerequisite for a successful implementation.

Mobile communication will continue to play a major role in the future and as the insights grow of the benefits of an open and flexible communication its role will be even bigger. By using an open existing infrastructure utilities can focus on their core-business and they and their customers can benefit from other suppliers of applications and services, now and in the future.

About

Göran Näslund is Senior VP Utility at Wireless Maingate. He has more than 20 years of experience in the ICT industry and has the last 7 years been involved in providing M2M communication for Smart Metering roll-outs numbering 4 million metering points.