In an effort to address the complex issues of climate change, energy independence and sustainable economic growth, global policymakers are requiring utilities to provide more reliable electricity and integrate significant amounts of wind and solar generation -- all of which require new power engineering designs and technology. Further compounding the complexity of this issue, most G20 economies are powered by an electric infrastructure that is 40 to 50 years old and needs replacing, an undertaking that would require massive capital expenditures.

At the same time, consumers’ use of energy and their expectations of services are evolving with the rapid development of new, energy-smart electronics, internet applications/services, household appliances and plug-in electric vehicles.  Industrial, corporate and government sustainability goals are driving widespread adoption of energy and information communication technologies (ICTs) to create energy efficient factories and buildings, produce and store clean energy, and enable carbon-neutral operations.

The challenge for utilities and electric service firms now becomes how to invest in both their existing core business as well as in innovation. Leading utilities are developing integrated business strategies, technology architectures and deployment roadmaps to guide these crucial investments. It will be critical that they deploy energy and ICTs, allowing them to provide service in a manner consistent with present and future customer needs, while remaining flexible enough to accommodate changes in market structures and highly distributed resources.

Disruptive Technologies on the Horizon

The leading smart grid designs integrate energy technology with information technology to create a smarter, more secure and more robust grid. Key technologies that should be considered in any architecture are:

·Distributed Generation (DG): Distributed generation is at the inflection point of the adoption curve in the North American market, well past that in Europe, and just emerging in AsiaPac. In Europe, energy from renewable resources in some countries is reaching 50% or more of energy delivered on a given day. The focus on distributed resources to reduce the complexities of building new transmission in several areas around the world means renewable generation on distribution circuits will continue to grow for the foreseeable future. 

·Sensors: Widespread deployment of sensor technology across the electric grid is occurring in the form of synchrophasors, which provide real-time measurement of electrical quantities from across a power system, in substation and distribution equipment and smart meters. In North America, synchrophasor and smart metering deployments have been accelerated by the U.S. Smart Grid stimulus funding.  Australia has also recently awarded smart grid funding that will result in a significant deployment of grid sensing technology. 

·Energy Storage: Energy storage has the potential to enable the electric system to be more reliable and stable, and provide better power quality and customer-side energy management. Climate and energy policies are advocating energy storage as an asset that can be used to mitigate renewable energy intermittency, and storage technologies that can provide adequate dynamic response are becoming commercially viable at grid scale.

Networks: Utilities worldwide are rethinking their telecommunications needs and infrastructure architectures. These architectures are addressing requirements for highly available, low latency wired networks to link substation and control center operations as well as robust, secure wireless field area networks to support distribution automation, mobile field force automation and smart metering.  The electric utility industry is adopting Ethernet/IP-based architectures to address today’s needs and those in the future. 

·Data Analytics: Analytics will leverage data from many sources including smart meters, distribution and substation intelligent energy devices, and phasor measurement unit (PMU) devices.  Advanced analytics will enable smarter, faster decisions by automated utility information systems, utility personnel and customers. The challenge of managing this mountain of data will be managed more effectively through the use of network based tools. Advanced data management technology will be used in both utility data centers and cloud services. This scale of data will require effective visualization and intelligent alarming tools to provide useful and actionable information to system operators.

Near-Term Technical Challenges

Several complex, short-term technical challenges face utilities, electric services firms and technology suppliers in developing a smarter grid, including Ultra-Large Systems Architecture, cyber security and distributed intelligence.

Ultra-Large System Architecture

The scale and scope of the grid as described above is vastly more complex than the existing electric system -- which has been described as the most complex machine on earth. This increased complexity requires new architectural approaches to manage data and controls across tens of millions of endpoints, federated controls to manage various latency requirements for certain grid operations, and system security, reliability and extensibility.

Cyber Security

The transformation of traditional energy networks to smart grids requires an intrinsic security strategy to safeguard this critical infrastructure. In the U.S., concurrent and complementary efforts are underway to address the development and implementation of a lifecycle approach for the electric industry. This and similar efforts underway in Europe and Australia can be leveraged for electric systems worldwide.

Distributed Intelligence 

Substantial growth is occurring in the quantity and diversity of distributed systems and devices to be connected and coordinated. Distributed intelligence architecture embeds digital processing and software at many locations in and along the power grid infrastructure to implement flexible grid automation.  Such systems may be completely distributed, or involve distributed elements with centralized management and coordination.  The use of distributed intelligence provides opportunities to implement scalable systems to integrate greater amounts of renewable distributed generation, enhance grid efficiency and operations.


Navigating the complexities of integrating information technology with the electric infrastructure will require that all parties work together to address the challenges.  Utilities and their customers, vendors and partners alike, are all taking steps to make a smarter grid the reality.

The Western Electricity Coordinating Council (WECC) is the North American Regional Entity responsible for coordinating the bulk of electric system reliability for the Western U.S., Canada and part of Mexico -- considerably the largest partnership between utilities. Because of the diverse characteristics of the region, WECC and its members (including Southern California Edison, Pacific Gas and Electric, San Diego Gas and Electric, BC Hydro and many more) face unique challenges in coordinating interconnected system operations and the long-range planning needed to provide reliable electric service across nearly 1.8 million square miles. Cisco is collaborating with Harris Corporation, an international communications and IT company, on a five-year contract to provide a Wide Area Network (WAN) for the WECC. Once built, WECC’s WAN will form a communications foundation that will help detect and avert regional electrical system disturbances across an area that extends from Canada through 14 western U.S. states, including California, Arizona, New Mexico and Idaho; the Canadian provinces of Alberta and British Columbia; and the northern portion of Baja California, Mexico. 

Companies like General Electric and First Wind, an independent energy company focused on utility-scale wind projects in the U.S., are using communications technology to more efficiently manage their operations and produce wind power for distributed energy generation.  For example, First Wind has deployed a unified Cisco network throughout various parts of its operations to support data, video and voice communications for lower costs and greater reliability.

BC Hydro and Itron are two companies proving that partnerships will ultimately modernize the grid through the use of secure networks to support smart metering. BC Hydro recently announced that it will contract Itron to provide two million new meters, which will run over a Cisco-powered multi-application communication network, for BC Hydro's Smart Metering Program within the next two years. According to Jesse Berst of Smart Grid News, the contract will keep electricity rates lower than they would have been by saving about $70 million in the first three years of implementation, and will provide a net benefit to consumers over the long term of more than $500 million.

Additionally, with increased energy demand from the ever-growing population and the introduction of electric vehicles (EV) to the grid, utilities will need to be prepared for the impending shifts in energy demand. Added demand from EVs could diminish performance in neighborhoods with the highest EV concentrations. Cisco and ECOtality have partnered to demonstrate how consumers can be made more aware of their energy use through the integration of the ECOtality Blink Network charger interface with the Cisco® Home Energy Management Solution. The on-hand analysis from smart meter devices will enable more intelligent energy management decisions from consumers, which could effectively manage energy demand in highly populated areas with high EV concentrations.

Looking to the Future

The transformation of the electric grid across the globe is being driven by the intersection of energy and climate policy, customer and business value and technological innovation. This journey will likely take 20 years or more, with key policy and technology milestones along the way. Utilities and electric service firms will be challenged to invest in both their existing core business and future innovation. The potential for alignment challenges between policy milestones and the maturity of the energy technology and information technology required to meet those milestones will be significant.  Many key technologies will be vital to the security, scalability, and reliability of the grid, none of which will be built by one company.  This transformation and the innovation necessary to support and accelerate it will only take place via collaboration among many partnerships, both public and private.  


Paul De Martini is the CTO and vice president of the Connected Energy Group at Cisco Systems.