AMI and beyond with wireless broadband

Utilities are realizing that to truly harness the power of the Smart Grid, a wireless data network capable of delivering 24/7 high-speed communication is required to enable a variety of Smart Grid applications.

“For most utilities, building a high-speed wireless network on the back of their AMI systems is an investment that will provide value well beyond AMI. Once deployed, the organization will have real-time two-way communications with the bandwidth to support virtually everything they want to do”
-Rick Nicholson, Energy Insights Analys

The Realities of AMI

AMI initiatives are moving forward on a global basis and at great speeds despite their high cost. Utilities are investing million – even billions – of dollars in AMI systems, including the costs of the smart meters themselves, meter installation and the Communication Infrastructure required to provide two way monitoring and control to the end points.  Utilities have invested a lot of time in evaluating various AMI vendors in numerous small-scale pilots usually consisting of one or two collection points. Typically, these pilots use public cellular as the backhaul for the AMI data for three reasons: already available coverage footprint in their pilot area , zero implementation cost and low monthly fee.  As these pilot systems become large scale and fully operational, however, utilities with thousands of AMI collection points can be caught off guard by the large O&M costs of continuing to use public carriers for backhauling the AMI data. In the future, adding more Smart Grid applications over the cellular network could easily drive O&M costs through the roof.

Backhaul operations make up a relatively small portion of the overall technology costs for an AMI system and account for approximately 10 to 15 percent of the cost. Nevertheless, since the cost of backhauling AMI data over a public network can be substantially higher than anticipated, some utilities have suspended full scale AMI installation until a more cost-effective, scalable backhaul network can be utilized. "Considering only the additional CapEx of a Private Network compared to Public Network OpEx is like the tail wagging the dog," says Jim Hanson, industry principal, Motorola Energy & Utilities Group. "When you factor in the recurring costs associated with relying exclusively on public cellular service providers for backhaul with the likelihood that they will not be able to provide 100 percent coverage of a utility's entire customer base, the ROI for deploying a scalable private AMI backhaul network that covers the entire utility service territory - with enough bandwidth to support future Smart Grid applications - becomes very attractive." 

The Advantage of Going Private

It's no surprise then that a growing number of utility companies have decided to build their own private wireless broadband communications networks to support their AMI and Smart Grid applications.  "For most utilities, building a high-speed wireless network on the back of their AMI systems is an investment that will provide value well beyond AMI," says analyst Rick Nicholson, vice president, Energy Insights. "Once deployed, the organization will have real-time two-way communications with the bandwidth to support virtually everything they want to do."   In the overall AMI picture, the cost of building a private wireless broadband network is relatively small, but the advantages can be huge.

Two types of networks are required to achieve a Smart Grid vision - access networks and backhaul networks.  Access networks are typically used by remote devices for communication at the edge of the network.  Examples of access networks are Zigbee, WiFi, HomePlug and proprietary meshing networks.  Backhaul networks are the high capacity, low latency broadband networks that extend the enterprise network to remote areas, bringing the data from the access networks back to the enterprise. Examples of backhaul networks include both wired and wireless point-to-point systems and point-to-multipoint broadband systems, fiber and microwave systems.  These backhaul networks form the backbone for all Smart Grid access networks.

Capital Investment vs. O&M

A private wireless broadband network makes a great deal of sense in terms of reducing the high cost of backhaul and enabling a utility to keep costs under tighter control. PUCs tend to look at backhaul costs using leased lines as operational expenses, and thus, they are normally not recoverable.  On the other hand, building a private wireless network is usually considered a capital investment that helps improve efficiency, service, reliability and security. Therefore, a utility can typically recover much of the cost of the entire network.

Deployment itself is a significant advantage. Wireless networks offer affordable start-up costs, simple installation that can be accomplished in a matter of days instead of weeks or months, and an exceptionally low Total Cost of Ownership. The most important advantages of a private wireless broadband network are summed up in by the Five C's: Coverage, Capacity, Control, Capabilities, and Cost.  As more and more utilities examine the communications capabilities of their new AMI systems, the benefits of a private wireless communications network solution are becoming readily apparent. But the advantages of deploying a private network go well beyond AMI as utilities look to the future.

Beyond AMI

As the rush to deploy AMI solutions intensifies, savvy utilities are also planning to leverage their high-speed communications networks for a variety of additional applications. These networks are built upon sound business cases for providing enhanced productivity, service, security and ROI. Additionally, wireless communications networks make it easier to add new distributed energy resources (such as solar and wind power) to the grid as they become available. Other expanded applications include: Remote Monitoring and Control; WiFi Hot Spots; Demand-Response Services; and Load Management.  Even as they work at breakneck speed to implement their initial AMI systems, a great many utilities are planning for increased usage of the Smart Grid. By installing private wireless broadband networks to complete their AMI solution, these utilities are ensuring future growth in both service and profitability by preparing themselves for these and other energy-wise applications on the horizon.

The Ultimate Goal

Ultimately, the goal of the new Connected Utility is the empowerment of the entire utility enterprise through mobile and fixed intelligent devices and high-speed two-way connectivity with virtually every part of the organization. As they complete deployment of their powerful AMI systems, the best-in-class utilities will leverage their own private wireless broadband networks to deliver increasing value from a broad range of powerful and productive automated applications. Bottom line, the connected utility will be able to leverage the Smart Grid and its AMI system to efficiently and cost-effectively meet public service, environmental, regulatory and competitive needs today... and well into the future.