The Internet of Things: Will Utilities Lead, Follow or Get Out of the Way?

by Ryan Gerbrandt

Throughout the smart grid era, utilities have evolved their approach to communications, achieving in AMI networks some of the first scalable and business case driven IoT deployments. Is the industry ready to lead in the increasingly interconnected IoT era?

The internet of things, more commonly known as IoT, is a concept whose definition is emerging. Futurist Jacob Morgan, in a 2014 Forbes piece, described it as “the concept of basically connecting any device with an on and off switch to the Internet (and/or to each other.)” IEEE, which invites input on the subject, currently defines IoT as “a network of items -- each embedded with sensor -- which are connected to the Internet.” Fundamentally, IoT is the communication between two devices – not just the transfer of data, but data that is understood at some level by some form of intelligence among the devices.

ATMs, developed in 1974, were among the first smart devices included in IoT. It did not take long for this new “talkable” technology to take hold in our culture. By 2015, there were 2.6 billion smart phones worldwide, according to a November 2016 Ericsson Mobility Report, which predicts 6.1 billion devices by 2022. The number and type of devices poised to be IoT participants is constantly expanding: TVs, coffee makers, washing machines, thermostats, headphones, lamps, cars, bridges, buildings, roads, wearable devices and much more.

IoT in the Utility Industry
AMI was one of the earliest examples of IoT in utilities. Today, it is among the most widespread examples. As of 2015, U.S. electric utilities had roughly 64.7 million smart metering infrastructure installations according to the U.S. Energy Information Administration. With nearly 88 percent of these installations being for residential customers, utilities’ use of AMI continues to transform many of their key business processes, especially those related to the way they engage with end customers. Today utilities are poised for even greater IoT growth as digital control infrastructures and new low-cost digital sensors permeate networks – and may introduce additional connectivity from beyond the utility enterprise.

As the rollout of AMI revealed, utilities face the challenge of not only capturing and storing large new data streams, but also figuring out how to identify actionable business intelligence from this data. The rise of AMI and other smart grid applications saw utilities building out various purpose-built networks, leaving many struggling to make sense of it all amidst a “data tsunami” often worsened by siloed devices that couldn’t readily share or understand each other’s information.

Terabytes Ahead
The AMI data challenge is only a small taste of things to come. In the area of vehicles alone, Gartner, Inc. predicts that by 2020, there will be a quarter billion connected vehicles on the road, enabling new in-vehicle services and automated driving capabilities. As distributed generation, energy storage, and other grid edge resources including EVs proliferate, the growth in data and the need for tools to make sense of it is growing exponentially. How will all this equipment communicate securely and meaningfully -- and over what communications networks?

Utilities learned important lessons including how to deliver mission critical communications across different terrains and how to balance access, privacy and security. These utility challenges helped shape the communications platforms we have now. The utility industry has come to appreciate the complexity and importance of integrated communications. 

The future of IoT communications will not be shaped by one particular communication platform or technology. No device-specific or single technology approach fits the variety and complexity of the smart grid era or the coming era of IoT. Communications – by its very definition – is the foundational, unifying approach. It must not only deliver access to data but provide a format for it to be understood, for intelligence to be applied to it at multiple points in the devices and perhaps in its very architecture. In practical terms, communications will need to sit on a unifying platform that can seat a variety of forms of information from many technologies across an enterprise. It must match the best communication technology to specific business case requirements and be scalable to new and smarter tools.

Analyze This
As the maturing smart grid era evolves toward IoT, a variety of brands and types of meters and other devices will need to be able to talk and listen to one another and where networks need to be secure yet accessible. Today, for many utilities, communications between smart devices faces ongoing challenges.

As of 2015 there were 4.9 billion devices within the internet of things and that number is expected to reach or even exceed 50 billion by 2020. The sheer projected growth in endpoints alone makes having a unifying platform increasingly important for effective IoT communications. Utilities ultimately need devices that can communicate within each area of a network, both to each other and to a central host. And as communications networks connect globally, compliance with global standards and protocols will matter more than ever, as will the need for systems based on open standards.

Analytics take communications to the next level, applying advanced intelligence to extract value from data that communications has delivered. Will the rise of analytics follow the model set by smart grid – a gradual recognition of the need to move away from device-specific, embedded approaches and toward unifying, “take all comers” approaches? It remains to be seen. Just as AMI and smart grid began with device-specific, purpose-built platforms, the evolution of analytics shows similarities. Utilities are monitoring and analyzing distributed assets like solar PV using a variety of approaches. Smart lighting is seeing increased adoption, in many cases using proprietary and use-specific tools to monitor and manage them.

Ready to Lead?
Utilities learned critical lessons during the lead up to today’s IoT era that are relevant and applicable to almost all other industries facing communications challenges. The progress that utilities have made in AMI network communications has helped build the groundwork for future platforms that will support a modern grid with increasingly distributed and renewable supply sources, from solar panels to wind farms.

Utilities have the opportunity to take leadership positions in the IoT era. From integrated home energy management to microgrids that will interconnect and isolate in real time, IoT will bring an era in which utilities will find themselves overseeing communications that reach across their enterprises and into the homes and workplaces of their customers, interacting along the way with intelligence from transportation and municipal and private services of many kinds. The communications platform will play an increasingly pivotal role in enabling utilities to operate and control all their smart grid and IoT devices, ideally on a unified management platform. With IoT, millions of endpoints are coming, each delivering potentially vast quantities of data from multiple vendors, types, models, firmware versions, protocols, and communications technologies. With a unified approach to utility communications, built on the lessons utilities have already learned – about security, about privacy, about access across siloes, about engagement with consumers – utilities can be equipped to not only survive but lead in the Internet of Things era.

About the Author

Ryan Gerbrandt is a career electric utility industry professional. After specializing in utility communications systems, network operations, SCADA, HVDC controls and system protection for Manitoba Hydro, he joined Trilliant in 2007. He pioneered the processes and best practices being implemented in Trilliant smart grid deployments and today, as senior vice president for global solutions.


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