Understanding smart grid technology

Amy Larsen DeCarlo/Current Analysis
13 Dec 2010
Telecom technology has a key role in getting the components all along the utility infrastructure to talk to one another. A host of providers, including AT&T, Sprint and Verizon (see sidebar), are looking to capitalize on their 4G wireless networks to power the electrical infrastructure of the future via M2M communications. Some are already built on Wimax technology with LTE networks following close behind. These networks provide the bandwidth, and in the case of LTE the prioritization necessary to scale to support high traffic volume between a tremendous number of devices throughout the network.
Many in the industry believe LTE has an edge over Wimax in the long term because of its ability to support discrete QoS levels for different types of traffic. The urgency associated with some stimulus fund plans has many utilities looking at Wimax because it is deployed today, while LTE won't be widely available until 2011 and 2012.
Smart grid is discussed as a new idea, but utilities have actually been upgrading their infrastructures for some time. In 2009, the market for smart grid technology was estimated to be almost $21 billion -- an impressive number that is expected to more than double by 2014.
So what is driving this expansion? Simply put, a confluence of regulatory, technology and energy market factors are driving a surge in investment to modernize the grid, and soon. The US government is offering billions in smart grid stimulus funds to utilities and vendors to develop new smart grid technology projects, producing a growing sense of urgency -- and new projects.
Telecom service providers are uniquely qualified to serve this sector, providing advanced, scalable and far-reaching pipes to carry communications from often far-ranging devices.
The thinking is that utilities can work with telecom carriers, leasing space on their networks to support more advanced operations rather than the alternative: building their own networks. Providers like Sprint and Verizon are teaming with vendors that specialize in smart grid technology development.
While only time will tell how effectively the utilities work with telecom providers. It is clear, however, that the electric utilities are focused on making some major advances in the underlying infrastructure. This interest is very likely to translate into more smart grid technology projects, at least some of which are likely to help accelerate broad adoption.
Amy Larsen DeCarlo is the principal analyst for Security and Data Center Services at market intelligence firm Current Analysis
This article originally appeared on SearchTelecom.com