SMART GRID COMMUNICATIONS: 2015 & BEYOND The M2M and IoT revolutions mean a lot of upheaval – and opportunity – for the electric utility industry, as it works to modernise the grid and adapt smart grid applications for the challenges brought on by regulatory and operational changes. Hurdles remain, particularly for cloud-based solutions, but longer-term IoT technology is expected to completely overhaul the century-old utility grid and utility business models. Navigant Research’s Richelle Elberg talks trends and the outlook for the smart grid technology market worldwide. IoT versus M2M Before the advent of the IoT, there was machine-to-machine (M2M) technology. Today, the terms are often used interchangeably, but there is a difference. When it comes to smart grid technology for the electric utility industry, both come into play. M2M and IoT both refer to direct communications between devices, for monitoring and/or control functions. But M2M applications are typically point-to-point (P2P) solutions that rely upon dedicated private or cellular communications networks to deliver data back to a company’s operations centre for a specific purpose. Most advanced metering infrastructure (AMI) solutions, for example, communicate meter data over a dedicated network to the operations centre, where it is fed into a meter data management system (MDM), and then into the customer information system (CIS) for billing purposes. IoT broadens that defined set of M2M solutions by leveraging cloud technology and standardised, internet protocol-based communications networks. IoT applications make the data available to a range of existing and emerging applications. Data analytics technology leverages these vast stores of data for point solutions, but also makes it available for integration into new applications. The emergence of large, well- funded companies like C3 Energy – devoted specifically to cloud-based analytics solutions for electric utilities – highlights the size of the opportunity anticipated as METERING INTERNATIONAL ISSUE – 1 | 2015 the energy industry leverages M2M and, increasingly, IoT technology. Smart Grid and IoT Today, most smart grid applications should still be classified as M2M, but increasingly, true IoT applications are emerging. According to Navigant Research forecasts, the smart grid industry, worth upwards of US$55 billion this year, is expected to generate US$550 billion in cumulative revenue from 2015-2023. Government mandates for energy efficiency and grid reliability are critical drivers for power system upgrades worldwide, but the changing nature of electricity generation and an increasingly competitive environment are also forcing utility company executives to reassess – and, at times, accelerate their commitment to smart grid upgrades. The proliferation of distributed generation (DG) is stressing grids in places like Germany and Hawaii, where solar installations are reaching critical mass. Stagnant or declining load growth is forcing utilities to operate more economically and automate functions previously performed by field crews or operations centre personnel. As a result, tens of billions of dollars will be invested each year over the next decade in transmission network upgrades, distribution automation (DA) and substation automation By Richelle Elberg, Navigant Research (SA), utility IT solutions, and AMI. Billions more will be spent on the communications networking infrastructure necessary to tie it all together. The Possibilities are Endless Smart grid technology leverages the M2M/ IoT platform to bring both visibility and control to the grid edge. The combination of connectivity and innovative software solutions (including mobile applications) offers utility operations managers capabilities never before enjoyed, particularly in the distribution grid, but also in the transmission network. For example, sensors placed along high voltage transmission lines can measure heat and wind speeds to enable dynamic line rating (DLR), allowing the operator to increase circuit capacity without a reduction in safety or reliability. A power plant that is connected by a single transmission line could be shut down by hot weather/no wind conditions that exceed the line’s static line rating (SLR). DLR can give operations personnel real-time intelligence that signals them to increase power flow, keeping the plant online and preventing substantial losses. DLR can also help the utility avoid or defer additional investment in transmission lines, which can cost millions of dollars per mile. Smart Grid Technology Revenue by Application, World Markets: 2015-2023 Source: Navigant Research 41