Next-Generation Utility Telecommunication Solutions for the Smart Grid

Utility network modernization and Smart Grid implementation are major challenges for almost every utility company today.

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Utility Products

By Marcelo Blatt

Utility network modernization and Smart Grid implementation are major challenges for almost every utility company today. Smart Grids create complete nervous systems for power grids that rely on efficient communication between the different grid components to enhance operational efficiency while saving money, improving reliability, and curtailing carbon emissions. Effective communication is a key component of the Smart Grid. The challenge for utility telecom planners is to choose the right telecommunication technologies and network architectures from among the wide variety of options on the market.

This article describes the characteristics of the Smart Grid and translates them into communication network requirements. It compares different solutions, analyzes their ability to meet utility Smart Grid requirements, and concludes with guidelines for the design and implementation of the optimal Smart Grid communication solution to meet the needs of the utility.

The challenges of rising global energy demands, climate change, and aging infrastructure are driving the need to deliver sustainable, secure, and competitive energy. As such, policymakers across the globe are implementing initiatives to increase the efficiency, safety, and reliability of electricity transmission and distribution systems by transforming current electricity grids into an interactive (customers/operators) service network referred to as a Smart Grid.

The basic concept of Smart Grid is to add monitoring, analysis, control, and communication capabilities to the electrical delivery system to maximize the throughput of the system. Moreover, the Smart Grid also provides many economic and environmental benefits. From an economic perspective, a Smart Grid can reduce overall energy consumption through consumer education and participation in energy efficiency and demand response/load management programs. From an environmental standpoint, a Smart Grid can reduce carbon emissions by maximizing demand response/load management, minimizing use of peak generation, and replacing traditional forms of generation with renewable energy generation.

As shown in Figure 1, the Smart Grid offers numerous benefits to utilities and grid operators, as well as to consumers. The Smart Grid will allow utilities to move electricity around the system as efficiently and economically as possible. It will also allow the homeowner and business to use electricity as inexpensively as possible by providing the flexibility to manage their electrical use while minimizing their costs through smart end-use devices. For instance, the Smart Grid could provide real-time data regarding their carbon footprint to consumers and encourage them to reduce carbon emissions.

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As such, the Smart Grid is an integration of different sub-Smart Grid components, including transmission, distribution, and end use. It builds on many of the technologies already used by electric utilities, but with added intelligence that enables a utility to optimize the operation of the entire electrical grid.

The Integrated Communications Infrastructure

The Integrated Communications Infrastructure is a foundational need and is required by the other key technologies to enable the functions of the Smart Grid.

Utilities have unique communication issues. Many have large territories in both urban and rural markets with different geographical terrains. In addition, most have implemented very large privately owned and operated telecommunication transport networks, supporting both fixed and mobile voice and data communications for their operational (support for grid monitoring, SCADA, remote management of substations, etc.) as well as corporate (internal telecommunications, IT and business applications) functions. Although these two major function areas typically make use of the same facilities, their needs are quite different in terms of bandwidth, traffic, availability, performance, security and communications protocol. In addition, these networks are supported by a variety of technologies, including microwave radio with high capacity links, trunked radio systems, mobile data radio systems, PDH, SONET/SDH, and PCM (n x 64 Kbps). As such, many of the systems used by a utility, such as AMR and SCADA, typically operate on different platforms and are built on proprietary protocols that require different communication networks. These disparate needs result in a fragmented communications infrastructure that often leads to higher operational cost, as data is not available when needed; bandwidth is often insufficient; and most systems are not two-way nor support the delivery of information in real time.

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As utilities move towards the Smart Grid, it becomes critically important that they look toward a communications architecture that can be shared among multiple applications. In addition, the speed, reliability, and security of the communications infrastructure will determine the range of applications a Smart Grid can support. Although communication is not the fundamental activity of electric utilities, a Smart Grid requires a communications system with the capacity to support traditional utility functions and the flexibility to adapt to new requirements such as advanced metering, demand response, distributed generation and other new challenges.

Diversity in networks and existing communications infrastructure means that there is no “one size fits all” solution. As such, most networks will require the layering of technology to flexibly accommodate different technologies and physical requirements. The concept of layering communications enables choice of media to match cost, performance, management, and security to the applications. This matching is necessary because the Smart Grid requires the integration of diverse communications technology into one overall infrastructure.

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Table 1: MSPP versus Carrier Ethernet
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IP Becomes a Unifying Technology

The Integrated Communications Infrastructure must address not only the backbone, but also the spur segments of the network. While core utility operational networks can be based on a number of technologies, the most prevalent is Next-Generation SONET/SDH (also referred to as multi-service provisioning platforms (MSPP)). Packet switched networks (PSNs) are gaining attention in the utility telecom market as well. NG-SDH is attractive, since it can support IP and Ethernet applications while still supporting legacy services. In addition, NG-SDH augments the functionality of the existing SDH network and enables its evolution to IP/MPLS by providing very effective Ethernet transport over SDH. Both a pure PSN and Ethernet over SDH are characterized as Carrier Ethernet networks.

As the number of IP-based applications increases, the need for bandwidth flexibility and efficiency grows as well. These services will be delivered over an Internet Protocol/Multi-Protocol Label Switching (IP/MPLS) architecture.

Carrier Ethernet is a connection-oriented protocol that provides “carrier grade” performance for mission-critical applications, including high reliability, QoS, provisioning, and security. The challenge is to combine these features with the cost-effectiveness and simplicity of Ethernet.

There are two main alternatives for providing Carrier Ethernet services:

  • Ethernet over SDH (implemented by the MSPPs)
  • Packet Switched Networks (Carrier Ethernet Switch Routers)

Figure 2 illustrates the technology alternatives for implementing a Carrier Ethernet transport network.

Both solutions offer a number of advantages and disadvantages, as shown in Table 1. MSPP is a proven and mature carrier-class infrastructure offering robust reliability, protection, and OAM. While Carrier Ethernet routers offer higher capacity Ethernet services, they have some challenges related to delay, clock generation, and distribution when supporting TDM services over a Circuit Emulation Services (CES) solution.

The optimal utility telecommunication network is the one that enables a combination of both of the above. The key technology is an MPLS-based Ethernet network that uses MPLS as a circuit oriented layer spanning across the carrier Ethernet and SONET/SDH network, as shown in Figure 3.


The challenges of rising global energy demands, climate change, increasing import dependence, aging infrastructure, and higher energy prices are driving the need to deliver sustainable, secure, and competitive energy. As such, there are a number of initiatives across all regions of the globe to transform current electricity grids into interactive networks usually referred to as Smart Grids.

An Integrated Communications Infrastructure is a foundational component of any Smart Grid strategy and requires solutions that not only support legacy services, but evolve to enable a wide variety of useful applications.

The deployment of MSPPs and Carrier Ethernet switch routers to build IP/MPLS-based communications networks is constantly increasing because they provide a highly reliable IP/Ethernet network that can optimize bandwidth usage, provide guaranteed QoS, and allow for dedicated VPNs (such as VPLS) for individual applications. In addition, they enable key Smart Grid applications, such as Advanced Metering Infrastructure (AMI), which is considered the first step toward a Smart Grid.

Through careful planning, designing, engineering, and application of these technologies, utilities can achieve the business objectives of Smart Grid while preserving current infrastructure investments.

About the Author:
Marcelo Blatt is Director of Vertical Applications and Portfolio Management with ECI. In his role Dr Blatt is responsible for next generation transport solutions for Utilities and UTelcos, with particular emphasis on integrated optical and data platforms.

Prior to joining ECI, Dr Blatt spent several years at Tadiran Telecommunication, where he served as a network architect. He has also taught graduate courses on computer networking at Ben Gurion University.

He holds a PhD from the Weizmann Institute of Science and a BA from the Buenos Aires University.

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