A smart grid is open

By Göran Näslund

In large parts of Europe, this past winter was colder than its predecessors. This is true for Scandinavia as well, though temperatures were in no way 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 the importation of coal based electricity.

When low temperatures increase demand beyond the point where low cost and domestic supply is sufficient, the result is an increased cost per kWh. These winter price increases made the headlines, with prices going up by as much as three percent during peak hours. Of course the average consumer doesn't pay electricity by the hour, but even the monthly average for last 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 was that many utilities invested in systems that weren't capable of anything except 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. With the direct involvement of consumers, via tools and incentives to save energy, some of the additional production sources would have been redundant, with significant 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. Several countries across Europe are now poised to implement similar legislation. Albeit crucial, smart meters are only one component in the utilities infrastructure smart grid. Utilities are faced with a number of challenges - and opportunities - that have a direct effect on, and are dependent of, smart grids. Climate change, and the 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 a growing demand for electricity are all included within this.

M2M, machine-to-machine communication, has for many years improved business operations and created new revenues for involved companies. Utilities are no exception. 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 a growing need for immediate access to information emerge.

Several lessons can be learned from the telecom sector, where open standards like GSM have 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 grids, 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 to modifying the enterprise systems.

Mobile communication will continue to play a major and increasing role as insights grow to show the benefits of open and flexible communication. Partnering with an independent M2M communication provider gives utilities the advantage of accessing multiple networks, 24/7 operation and highly skilled support, processes and tools to manage logistics and rollouts, as well as robust and secure connections.

Biography

Göran Näslund is Senior VP Utility at Wireless Maingate. He has more than 20 years of experience in the ICT industry and for the past seven years been involved in providing M2M communication for smart metering rollouts numbering four million metering points.