Smart Grid deployments are not only delivering improved energy security, grid reliability, and consumer control to us, they are bringing the Internet of Things closer to reality.  The Internet of Things (IoT) is defined in the Smart Grid Dictionary as a conceptual description of the ability to connect any objects with an IP address and some level of embedded intelligence to the communications network.  Embedded intelligence can include localization, sensing, identification, security, networking, processing, and control. 

According to CASAGRAS  – an EU Framework 7 project for the Coordination and Support Action for Global RFID-related Activities and Standardization – the IoT is one of the pillars supporting the future networked society and structured on a foundation of future network infrastructure.  The IoT exists in nascent forms today – primarily islands of applications that relate to objects being identified and included in networked systems.  Some industrial processes could fall into this view, as well as smart buildings that have IP addressable devices down to the lighting fixtures.

The Smart Grid is a specialized example of the IoT, in which small to large networks connect devices and use embedded intelligence in the forms of sensing and control to deliver and manage electricity, minimizing or eliminating the need for human interactions to achieve those same objectives.  The Internet of Things has been viewed as a “metaphor for the universality of communication processes, for the integration of any kind of digital data and content, for the unique identification of real or virtual objects and for architectures that provide the ‘communicative glue’ among these components”, according to CASAGRAS.  But from a Smart Grid perspective, it’s easier to think of it as nested and overlapping networks.  A Home Area Network (HAN) is nested in a Neighborhood Area Network (NAN), a NAN is nested in a Field Area Network (FAN), and that FAN is part of the distribution grid of a utility.   

Utilities are rapidly investing in wireless and wired communications technologies and services to build out their Smart Grid projects.  Spending as a proportion of overall telecom budgets could double over the next five years, growing from 28% of telecom spending in 2011 to half (50%) of all telecom spending in 2016, according to research conducted by the Utilities Telecom Council (UTC)  this year.

While smart meter rollouts constitute a significant portion of utility investments in the USA, they are also investing in IEDs – intelligent electronic devices.  IEDs enable local and/or remote sensing and control of substation equipment at what is typically a machine to machine (M2M) level, and this is a primary reason why Smart Grids fit so well into IoT concepts.  The typical mid-sized utility in the USA has between 2000 to 5000 devices online today to provide SCADA communications, condition-based monitoring, and polling for event-specific data in their substations.  The proliferation of IEDs is one of the most interesting Smart Grid stories too – because embedding communications and intelligence in the distribution network offers new opportunities to utilities to monitor and manage their power networks, and thus improve overall reliability (decreased outages) at the least operational costs (fewer expensive remedial repairs).  

Although Smart Grids and the Internet of Things have a significant portion of activity that is M2M, all of these networks will require human interactions at different times, and those interactions will be based on data distilled into information and insights powered by advanced analytics solutions that are only now being deployed by utilities.  Next week’s blog will focus on how these networks can be managed to meet objectives that are set by the network owners.