Hyperscale Automation for the Energy Networks of the Future
Rapid improvement in the efficiency and economics of solar-, wind- and other renewable-based energy generation technologies has dramatically reduced the cost per kilowatt-hour of electricity generated from renewable energy sources. These economic forces have driven today’s electric power industry to a tipping point. In many parts of the world, the cost of generating clean, renewable energy in homes, enterprises and neighborhoods is now at or within striking distance of the cost of legacy bulk fossil- and nuclear-based generation. This disruptive force will fundamentally transform the way electric power is generated and consumed, reshaping the electric power industry.
As a result of this techno-economic shift, the locus of value creation is shifting to where these devices are installed: electric utilities’ low/medium-voltage distribution grids. Creating future value in this new world will require utilities to deploy hyperscale automation and analytics in the distribution grid. In the near term, this approach is needed to drastically lower operational expenses, as today, renewable generation “behind the meter” is eroding the revenues of many utilities. Analytics will also be needed to help utilities control the flow of power in their distribution grids – allowing them to sweat the heavy capital investments they have made in grid infrastructure (e.g., transformers) that were not designed for the two-way energy flow characteristic of electric grids with high penetration of distributed energy resources.
Hyperscale automation and analytics will be required to also generate new revenue from the new energy-related business models that will emerge in the massive-scale distributed generation era. The energy networks of the future will increasingly rely on virtual power plants instead of traditional bulk generation. Virtual power plants carefully orchestrate distributed generation, storage and consumption, turning renewable energy resources in homes and enterprises into a networked source of reliable power. New value will be created by those companies that figure out how to seamlessly and continually match electric supply and demand in this massively distributed system.
To achieve hyperscale automation, the world’s electric grids will require an upgraded nervous system – the communications networks that utilities use to measure, monitor and control the grid. These communications networks will require scale, performance, capacity and agility far beyond the capabilities of most utility networks today. At Nokia Bell Labs, we call a network with these capabilities a “Future X network” – where X denotes the more than 10-fold improvements. Further, it will require massive connectivity within the distribution grid where today – due to limited fiber penetration and lack of mission-critical broadband wireless connectivity – most utilities are largely blind.
During this time of transformation, utilities are presented with a series of no-regret investments to prepare for the hyperscale automation of their electric grids:
- To be able to measure, monitor and control distributed energy resources, storage devices and consumption, utilities will need to have access to 4G (LTE) – and eventually 5G – wireless network technologies. Given the extreme reliability requirements of many of these control applications, utilities are in the early stages of adopting private broadband wireless networks. This step is already being made in many parts of the world (e.g., the US and Brazil), where utilities are beginning to deploy private broadband wireless networks using 4G (LTE) technology. These private LTE networks have a rapid return on investment, as they drive down opex and are built to utility standards for reliability and security. With wireless network technologies, utilities can rapidly and economically deploy new networks and services. This flexibility and speed of deployment will be needed to meet the challenges and opportunities of the future electric grid.
Because of the wide areas that need to be covered and the need to provide this coverage with favorable economics, utilities will need access to similar bands used by commercial service providers today. Some of this spectrum will come from commercial service providers who find ways to work with utilities to build networks which satisfy their requirements for extreme reliability and performance. Some will come from spectrum license holders and government spectrum regulators.
- Utilities will need to drive fiber deeper into their distribution grid. Additional new value will be created by those utilities who are able to monetize the fiber and broadband wireless systems they deploy to automate the electric grid. Pushing fiber deeper into the distribution grid has the dual benefit of supporting grid applications and providing opportunities for additional revenue from business-to-business communications services such as base station backhaul for commercial service providers, as well as providing highly reliable connectivity for future energy services.
- Because of the growing scope and scale of their networks, utilities will need to adopt the same technologies and operations used by commercial service providers to connect devices and automate and secure their networks. These technologies include IP/MPLS, software-defined networking, virtualization and cloud networking.
Deep fiber penetration and broadband wireless technologies (4G and 5G) are the key building blocks of the nervous system of the utility of the future. Hyperscale automation using these technologies will be the key to unlocking new value in the utility of the future.
