The international market is nothing if not an environment of trends. Within the utility market, there is significant buzz surrounding the Smart Grid initiative and the most significant trend in this space is the creation of the “Internet of Energy”. This assessment was provided by Arthur Locke, RVP, North American Utilities with Alcatel-Lucent (News - Alert), in a recent TMCnet interview. During this conversation, Locke noted that the growth of 4G wireless is very important to the success of Smart Grid Initiatives and agreed that the Smart Grid presents the potential of a threat.

While he hopes there is a future for electric cars, Locke believes 2015 will be the year of the Smart Grid. As for the communications market overlapping with the Smart Grid space, Locke believes the Smart Grid will require a significant investment in communications solutions and services to support the right kind of environment. Traditionally, utilities have played the role of the follower, while carriers led the way. Locke and Alcatel-Lucent believe this will change.

At the upcoming Smart Grid Summit, Locke will be discussing the way Smart Grid business applications translate into underlying communications requirements. This is a can’t miss as MPLS offers utilities an elegant way to satisfy competing utility needs. And, if he does say so himself, Locke is an engaging speaker! As for his bold technology prediction for 2011, Locke predicts the most significant Smart Grid deployment will come out of the muni-market.

The entire conversation follows below:

What is the most significant trend impacting the utility market? Why?

It is the incorporation of, ultimately, millions of distributed sensors and appliances within the distribution grid, creating the “Internet of Energy”.  This proliferation of intelligent devices, linked by secure communications, will not only significantly improve the way utilities deliver electricity, but it will also fundamentally alter the pace of innovation supported by the industry.

How much influence should regulators have over Smart Grid initiatives?

We could debate endlessly about “how much” is the right amount – but the fact is they do and will continue to have a lot of influence.  Educating regulators about the way in which ICT will revolutionize grid operations, and addressing concerns about things like security, are useful endeavors in advancing smart grid initiatives.

How important is the growth of 4G wireless to the success of Smart Grid initiatives?

Alcatel-Lucent thinks it’s very important.  Over time, today’s narrowband AMI networks will constrain utilities’ ability to deploy the kind of ubiquitous intelligent sensors and distributed intelligence that will be needed to support smarter grids.  The easiest, least costly way to overcome this constraint will be via 4G technologies, whether WIMAX or LTE (News - Alert), which can support megabits of throughput at the “edge” versus kilobits in today’s 900 MHz RF networks.   Broadband solutions will be required to support the aggregation of application data supporting DMS, DR, OMS, etc.; video (perimeter security); and voice (push to talk and/or VoIP) that will exist in a mature smart grid.  The adoption of 4G solutions would be greatly facilitated if the FCC (News - Alert) would find a way to allocate at least 10 MHz of spectrum to the industry.

Don’t smart grids potentially present a major security threat?

Potentially they do – which is why Alcatel-Lucent, like many other experts, argues for “defense in depth.”  The topic of security is a very complex one, spanning perimeter security, access control, logical security, policies and procedures.  Insufficient design or a lack of compliance, in any one of these areas, can expose vulnerabilities than can be exploited.  The use of IP itself does not increase the security threat utilities face today in thwarting deliberate attacks on their infrastructures.  The IP suite of technologies offers the needed levels of reliability, redundancy and availability, and can leverage an extensive ecosystem of products and services designed for telecommunications.  Moreover, IP has been subjected to decades of significant vetting as a network routing protocol, resulting in a robust technology and a mature set of management and security appliances to employ.

Is there a future for electric cars?
We hope so! 

Which will be the year of the Smart Grid?
 2015.

How do you see the communications market overlapping with the Smart Grid space if at all?

The smart grid will require a significant investment in communications solutions and services to support the kind of secure, ubiquitous intelligent sensing and control applications that will deliver customer value.  Today the telecommunications market is largely driven by what carriers need, and utilities play the role of “follower”, because historically they haven’t represented a large enough market for equipment and solution vendors to drive design requirements.  Alcatel-Lucent believes this will change as smart grid telecommunications is becoming a very significant market, both for its potential size over the next 10-20 years, and for its double-digit CAGR.  And the utility/ Smart Grid market will require levels of security and reliability that surpass the needs of residential customers that drive much of today’s telecommunications services, and therefore, R&D by providers and vendors.

You are speaking at the upcoming Smart Grid Summit in Los Angeles. What is your session about?

We’ll be discussing the way Smart Grid business applications – like AMI, DR, DMS, OMS, etc. - translate into underlying communications requirements and why Multi-Protocol Label Switching (MPLS) is a  cost-efficient, reliable and secure solution for the integration and management of these applications. 

Why is it a can’t-miss session for attendees?

Because MPLS offers utilities an elegant way to satisfy competing utility needs:  minimizing upfront CAPEX investment in ICT; maintaining the integrity, priority and security of different types of application traffic; and minimizing OPEX (News - Alert) costs needed to maintain and operate new network and IT technologies once they are deployed.   Plus I’m an engaging speaker!

Please make a bold technology prediction for 2011.

The most significant Smart Grid deployments, ones that demonstrate the real value of using real-time data to improve grid operations, will come out of the muni market.