Electrifying ideas for a smart power grid

Utilities' next-gen networks are not just for bright sparks.

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Electricity. It's everywhere around us, powers the machines that run our society and yet we seldom think more about it than the effort it takes to flick a switch.

But a nationwide project underway to lift the IQ of our dumb power grid to make our homes and workplaces better able to manage the power they consume is poised to sweep away that complacency.

And it offers a broad swathe of opportunities for IT resellers to find new markets, energy insiders say.

In the biggest change to power generation, distribution and use since Nikola Tesla was a boy gazing up at lightning storms in the night sky, Australia's electricity companies and governments are rolling out smart networks to replace those powering the nation for the past century.

The most obvious change most will see is attached to the wall of their premises. At a cost of $2.8 billion to $4.6 billion about 10 million humble, electromechanical power meters with patent histories harking to 1872 will be replaced by smart meters loaded with scores of features and potential to reduce and provide usage information. The new meters are $150-$250 each.

They report to energy companies on how power is consumed, are disconnected and reconnected remotely and promise to connect wirelessly to devices inside the house to manage loads. And they may be controlled remotely, for instance, to lower the air-conditioning on a hot day or schedule energy-guzzling white goods such as fridges to defrost or clothes dryers to operate at night when the load on the network is light and the cost lower.

But this advanced meter infrastructure and its $4.8 billion to $7.5 billion savings is only the visible component. Distributors are installing thousands of sensors at substations and on Australia's streets to alert them to events that could harm the grid. And the pay day for resellers, power industry insiders say, is to bring IT smarts to the back offices of energy companies so they can secure and make sense of the welter of data about to come their way.

When all the pieces are in pace some time around the end of next decade, Australia will have a smart grid that intelligently routes electricity in the most efficient way and heals itself when disaster strikes.

Water suppliers are keen observers, so impressed are they by promises of reduced emissions and operating costs. Waiting for a blackout or a burst water main to identify flaws in our ageing utilities networks may one day be a dim memory.

Flipping the switch on smart grids

Energy Australia is a pioneering electricity distributor building out a smart grid. It put 12,000 sensors on its network to judge, for instance, the loads applied to sub-stations and at street level. The century-old power distributor to 1.6 million houses that operates over 22,275 square kilometres in four states started by understanding that telecommunications was the "glue" to bond its $170 million smart grid, says its intelligent networks manager Adrian Clark.

"You need good, two-way telecommunications to collect that data and bring that back into the organisation to get good knowledge," Clark says.

The 800 kilometre optical fibre network that it started deploying three years ago to its 200 major sub-stations was completed earlier this year, creating robust links, Clark says. The utility progressed from enterprise to carrier-class networking gear.

"Another key thing we kicked off was a whole bunch of first-generation smart meters [with] time-of-use tariffs," he says. "We did a lot of strategic work around how customers would benefit." It has installed 400,000 of these somewhat-smart devices that don't talk to base but respond to price pressures during the day.

"We've trialled just over 7000 two-way communication smart meters since 2006 and tried a number of different telecommunications technologies to communicate."

Although there is discussion about using the $43 billion national broadband network to carry data back to base, many in the industry advocate a mesh of technologies including flavours of wireless.

Clark says an innovation of which the utility is proud and that generates much interest with other distributors is its monitoring project.

"It's, I think, a world first in smart grids - we've begun the rollout of smart sensors at street level to enable us to improve the reliability and efficiency of the low-voltage grid." Vendor partner IBM is in the process of mining the data collected into information for use in the organisation to plan the network.

And that's where the early gains will be for energy markets - helping distributors better run their networks. Today it takes calls from angry customers to alert an energy company to a problem but soon it will be the first to know.

"We have real-time sensing on every street," Clark says. "It provides us with a whole lot more data about what's going on so we can start to have engineering analytics and diagnostics sitting on network so the types of issues (such as transformers blowing out) can be avoided.

"It allows us to plan the network, respond to outages and maximise assets ... for as long as possible."

To understand why power companies are so keen to maximize their investments, it's important to know how electricity is generated and why even small changes in consumer behaviour when taken over a population make a big difference to the reliability of electricity and its cost.

Electrifying resellers

There are three forms of power generators - coal generators are the back-bone: relatively cheap but take a week or more to fire up. They produce a base load of electricity; what isn't used is wasted. Pricier, mid-range, diesel generators kick in when demand rises and for peak consumption, a third, ultra-expensive generator helps out on those few days in the middle of summer when everyone retreats to air-conditioning. At the moment, the consumer pays the same whether it's the middle of the night when power is cheap or the height of summer when it costs a prince's ransom; such costs have to be smoothed across the network, the year and all consumers.

Industry estimates that a fifth of generation capacity is used for just four days a year and a 10th for just nine hours a year - and this year those figures will be worse. Over the next few years as consumers share the pain of the real cost of electricity generation, peak tariffs will rise by six to 10-fold, energy insiders say.

Electricity companies admit to a lack of IT and telecommunications smarts when it comes to smart grids. IBM provided $3.2 million of services to Energy Australia to build the IT architecture that conveys the sensor readings. It's a compelling rib of Big Blue's "Smarter Planet" umbrella, that pushes its skills in bringing together uber-complex pieces of the IT puzzle to build more efficient and responsive systems for global commerce.

IBM's communications sector general manager David Murray says the channel should get involved in areas such as business analytics and workflows.

"They're traditional IT services that only recently in the energy utilities industry was the domain of network guys" such as Siemens and GE, Murray says. "The opportunity is now. There's a tipping point any day now.

"Companies like Energy Australia, SP AusNet, Integral, Powercor [are] starting to align to this transformation. If you're not talking to these companies now then your competition is."

Murray says providers of database and customer relationships systems are in particularly powerful positions to help utilities make sense of smart grid data.

"I don't think it's the domain for the IBMs [big IT integrators] solely - those who can get into the industry and show some insight in other industries [such as retail], will be successful." And he picks data storage resellers as likely winners.

Click through to page two to see why tomorrow's ZigBee smart home needs to be secured.

Take a copy of this story home with you in the August issue of CRN.

Your deep-dive guide to smart grids

• Hacking the smart grid by Nigel Phair
• AusCERT '09: Googling our way to network apocalypse (Secure Computing magazine)
• Network maker Silver Spring finds a silver lining
• Marchment Hill tells us how to light up the smart grid
• Analyst Paul Budde explains how utilities are wising up to smart networks