WiMax – A ‘disruptive technology’ just in time for utilities

Disruptive technologies come along periodically; the utility industry needs one yesterday!
Never before has the utility industry been inundated with so many problems all at the same time. One of the largest of these is a looming shortage of electric power supply in the United States. The U.S. Energy Information Administration estimates demand for electricity in the U.S. will increase 41 percent from 3,660 billion kilowatt-hours in 2005 to 5,168 billion kilowatt-hours in 2030. Other estimates put future demand much higher.

Estimates of the number of conventional power plants that would be necessary to meet that demand range from 1,500 to more than 3,000. Building that many power plants in the United States is something that just isn't going to happen. Besides the sheer astronomical cost of that many plants, the U.S. political, regulatory and social climates just won't allow them to be built unless the NIMBY (not-in-my-back-yard) group changes its song or environmental regulation is relaxed. Neither is likely to happen in the 23 years between now and 2030.

Demand explosion (especially for electricity) is the major problem facing the U.S. utility industry, but it is only one of a host of issues utility management faces. Others include the aging infrastructure, the aging workforce, the global warming political storm, transmission congestion and instability, and the political difficulty of building more, as well as fuel prices, market instability, terrorism and related security regulation.

During the past two decades, the industry has turned to technology to overcome a large number of challenges. Technology was able to extend the life of aged systems by providing better command and control of the distribution and transmission networks. Technology was able to multiply the productivity and efficiency of linemen and other field workers by pushing maps, work orders and the right parts into the field through mobile systems. Technology was able to vastly reduce the number of workers needed for such things as billing and collecting payments. Technology was able to automate call centers and get people to talk to machines rather than live workers.

With the expected shortfall of generation – and the inability to build many more conventional power plants, either natural gas or coal – utilities are being forced by regulation and legislation to look elsewhere to close the gap.

Elsewhere includes green power, a set of technologies still in their relative infancy (only 2.3 percent of U.S. supply today, according to the EIA), and demand response. The green power technologies are expected to grow to meet a larger portion of the demand, but that growth is likely to be relatively slow and not without substantial government subsidies to make it competitive with conventional sources.

Demand response is another technology-heavy approach to relieving some of the shortage. Under demand response, utilities have the ability to control demand, especially during peak periods, so as to reduce the need for generation. Demand response, particularly in its earlier incarnation as demand-side management (DSM), currently enjoys widespread political and regulatory backing. Demand response is one of the major drivers behind the current move in California and elsewhere to require or encourage the implementation of advanced metering infrastructure (AMI).

AMI will provide utilities with a wireless, broadband connection to the millions of residential customers they serve. That connection can then be used for advanced in-home appliances, air conditioners, pool heaters, water heaters, and so forth to provide homeowners a level of usage control (in conjunction with special utility incentives and rates) that has not been possible in the past. Customers can reduce their power usage, providing utilities with "avoided generation" to help meet the supply gap.

Utilities also are looking at continuing to automate the transmission and distribution grids to make them more efficient, self-healing and self-reporting. What all these technologies require is high-speed, broadband communications that are ubiquitous in utility service territories. Utilities currently use a hodgepodge of analog communications systems that are at end of life to get work orders to the field and communicate with the network. In the “Intelligent Utility Enterprise of the Future,” all of these systems will have to be able to communicate. What is needed is a widespread communications system to transmit collected metering information and command and control throughout the enterprise.

The “disruptive” communications system needed is being deployed now
Most people are familiar with WiFi, the high-speed, broadband, short-range communications systems already deployed in many homes, buildings, airports and elsewhere. WiFi provides millions with access to the Internet as they travel, or from floor -to floor in their own homes. WiFi has been a boon to the Internet age, but it has its limitations. These include: it is short-range, it is not secure and its capacity is limited to about 54 megabits per second (Mbps). It is not suitable for utility use where routine communications often include highly sensitive data about customers and the operation of the grid.

Now a new technology called WiMax is being rolled out that offers, for the first time, the widespread, high-speed, broadband, secure communications system the Utility of the Future requires. WiMax is based on IEEEEEEEEE 802 Wireless standards and offers data rates of up to 75 Mbps. Both versions are not just line-of-sight, as are many communications systems utilities now use.

“WiFi’s fundamental lower-power limitation normally restricts its use to local ‘hotspots’ which naturally would have limited mobility” says Ron Chebra, Senior Principal Consultant with KEMA, a leading utility consulting firm. “The advantage that WiMax offers is that its coverage umbrella is sufficiently large so that high speed mobile connectivity can be effectively achieved.”

Many utilities have fiber-optic communications backbones, but fiber to millions of homes is cost-prohibitive for utility purposes. WiMax can provide a wide-area, high-speed system to collect data from homes, substations, and sensors and controls on the transmission and distribution networks.

"Utilities will be among the first markets to benefit from WiMax," says Don Stroberg, Vice President of WiMAX at Sprint Nextel "WiMax will be an enabling technology that finally will be able to address utility needs for machine-to-machine (M2M) applications such as AMI, Home Area Networking, SmartGrid and Energy Management. WiMax will change the rules on how traditional data services are delivered to the customer. The whole value chain, from devices to quality of service and pay-as-you-use pricing will be impacted."

WiMax has been on the drawing board for several years, but on August 8, 2006, Sprint Nextel announced plans for a 4G wireless broadband initiative based on WiMax. The first two major metropolitan areas, Chicago and Baltimore-Washington, D.C., are being built out this year (2007). In 2008 alone, Sprint Nextel expects to invest $3 billion to roll out WiMax nationwide, reaching as many as 100 million people.

Yung Hahn, general manager of the WiMax Product Division of Intel Corp., Santa Clara, Calif., which will be building WiMax "chips," says the system not only will enable utility "command and control" across their service territories, it also will reach into the home. "An electric meter can have WiMax capability built into it so that it could be the control point both inside and outside the house. It can serve both as a communications conduit and a control point."
Hahn says Intel has been working with GE Systems to develop intelligent grid solutions that will be WiMax-enabled. "If you put WiMax chips into networks, who's going to build the WiMax network? That's where Sprint Nextel is going to play a vital role. What's interesting is that utilities have customers outside Sprint's traditional (cellular) footprint. As Sprint starts to approach more rural areas in its build-out, partnering with utilities that need to communicate in those areas will mitigate risk for both sides," Hahn says.

Having Sprint Nextel operate the network that will enable the Utility of the Future, or the Intelligent Utility Enterprise, also offers utilities the advantage of no longer having to manage complex wireless networks. Utilities, for example, have traditionally operated their own land mobile radio (LMR) voice systems. Many of these lack digital capability, which increasingly is becoming mandatory for utilities, and which will be mandatory in the future.
"I see WiMax as replacing mobile services for utilities," says Philip Mullins, Consultant for Wireless and Pervasive Computing of IBM, which also is interested in the new technology.

"I have to think that LMRs in utility service territories will be replaced. With WiMax, carriers like Sprint Nextel will become part of the critical infrastructure. Utilities now have the opportunity to leverage network investments horizontally across their entire enterprises with few systems that can do more with that like WiMax. This will offer enormous opportunities for both sides."

Outsourcing telecom, especially "disruptive technology" makes sense for utilities
It has been pointed out that because of the increasing difficulty utilities have in maintaining communications technology currency amid the demands of the volatile utility business environment, outsourcing telecommunications may become a growing trend in the industry. All of the critical issues listed at the start of this paper mitigate toward utilities adopting paradigms different from what they have been accustomed to in the past. These changes already are taking place at many utilities and eventually likely will permeate the entire industry.

As such disruptive technologies as WiMax emerge and fit into the matrix of communications systems and technologies utilities will require for Intelligent Enterprises, outsourcing communications to the experts in the commercial carriers just makes sense. The cost of building WiMax on a utility-by-utility basis is cost-prohibitive for the utilities themselves. But in partnership with carriers such as Sprint Nextel the new technology becomes affordable.

Sprint Nextel's new system will offer the following advantages:
• Based on IEEE Standards
• Supported by IT/computer and consumer electronics companies
• Good for the embedded device model
• Dedicated spectrum, no interference
• Designed for wide-area coverage
• Full quality of services
• Consistent customer experience
• Full security
• Inexpensive for frequent use
• Leveraged network investments across multiple initiatives

Disruptive technologies don't come along very often, but WiMax is likely to be one – it will revolutionize the way broadband, wireless communications are handled on a wide-area network basis. It couldn't have come at a better time for utilities.