Utilities Could Benefit from Standardized Networking

Around the world, tens of thousands of utilities are managing hundreds of thousands of communications networks—for smart metering, SCADA and teleprotection, substation automation, mobile workforce management, distribution automation, and more. These often proprietary networks are built and managed within operational silos. A single utility may be running more than 20 different communications networks for different purposes. This approach represents an inefficient use of capital and personnel. 

Looking ahead, as the electric utility industry prepares for transformation to its business model and competitive environment, the industry should consider standardizing around the 4G LTE wireless standard. New spectrum bands, including licensed and shared options, are becoming available globally. The 4G LTE standard is mature and economies of scale have been achieved thanks to global deployment by public wireless carriers. 4G LTE has the latency and capacity to handle virtually all utility use cases, and opens a path to 5G and its accompanying technical advances. Furthermore, widespread standardization by utilities in a region or country could help create a network effect, amplifying the benefits to each participant as more utilities join.

The Network Effect in Platform-Based Businesses

The network effect accelerates the value of products or services exponentially with increased participation. Examples include many gig economy businesses—Uber, Airbnb, Facebook—but basic telephony is one of the earliest examples. When only a few people had a telephone, there was little incremental value to having one. The more people who joined the network, the greater the value of the network to everyone. Today, millions of apps have been created for the mobile network platform, and smartphones are infinitely more valuable than when devices offered only voice service.

Utilities that take a holistic view of their networking needs internally, and participate in a regional network of networks, stand to benefit in the near term—and potentially even more over the longer term.

Utility Network Effect Benefits Could Be Meaningful

Guidehouse Insights believes there could be immediate benefits to creation of a standardized utility network of LTE networks. For example, when fires or hurricanes result in mobile workforce crews travelling to assist with restoration in a foreign territory, they could roam onto the local utility’s network, allowing for access to necessary systems and documentation. Less time would be wasted coordinating crews and outages would end more rapidly.

Over the longer term, a coordinated network of networks could help utilities ensure they have best-in-class cybersecurity, facilitate industry consolidation, support regional balancing of distribution level load, and allow for cross-territory transactive energy. Ultimately, as 4G evolves, the network of networks becomes a platform on which utilities can build new offerings enabled by the ubiquitous high speed and high capacity of 5G. 

Want to Know More? 

To read more about how Guidehouse Insights believes a network of private LTE utility networks could benefit the industry, see the white paper Private LTE Networks Position Utilities for Industry Transformation, sponsored by Anterix and available here.