SMARTER OPERATIONS The global power industry is facing rapid change. In the face of increasing power demand, more stringent regulations governing carbon emissions and the need to manage distributed generation from renewables, utilities every- where are turning to intelligent electric transmission and distribution systems enabled by IP. Yet as with any major transition, power providers need to plan their migration carefully to avoid pitfalls and assure maximum success especially in a largely regulated industry where strategic CAPEX timelines typically can run 20 years into the future. INVESTING IN IP TECHNOLOGY: 10 KEY STRATEGIES FOR VALUE Spending on smart grid systems based on IP/MPLS is accelerating. In fact, GTM Research forecasts that by 2016 about 6.8 billion will be spent MANAGING THE IP EVOLUTION WITHIN AND OUTSIDE OF THE ORGANIZATION The steady modernization of the electric transmission and distribution system based on IP will have social impact on PLANNING THE PATH TO IP SUCCESS: RELIABILITY, SECURITY AND EFFICIENCY After the success in the Telco market, IP is now revolutionizing the utilities world with unprec- edented operational efciency CREOS LUXEMBOURG: LEARNING TO GET THE MOST FROM IP/MPLS Creos Luxembourg S.A. has successfully embarked on an ambitious, multi-faceted IP/ MPLS project for its national electricity and gas network SOCIAL VIEW ECONOMIC VIEW CUSTOMER VIEW EXPERT VIEW GRIDTALK POWER UTILITIES COMMUNICATIONS E-ZINE Thanks to its capability of dynamically sup- porting multiple mission-critical services in a single converged network, IP/MPLS has become the technology of choice for utilities implementing these converged smart grid communications networks. As a utility-grade communications network architecture, it sup- ports the exibility and scalability of IP, while maintaining the reliability and predictability of traditional, mission-critical TDM networks, including the most critical and latency-sensitive utility applications such as teleprotection. The widespread adoption of IP-based communications networks will impact on all stakeholders from government and power providers to the consumers they serve. Regulation will evolve to address the new paradigm, and utilities will have to be involved in educating and guiding the local, regional and national agencies that oversee the sector. Financial planning, project management, operational processes, employment proles and business models will change as well, with new efciencies and additional revenue opportunities coming to the fore. Consumers will need to adapt to new pricing structures and energy consumption incentives, in some cases generating electricity themselves. All will take a greater, more interactive role in the energy ecosystem. In this issue of GridTalk, four experts provide their valuable perspectives on the economic, social and technical considerations for utilities planning and embarking on that all-important transition to smart communications systems based on IP/MPLS. They identify the key challenges, highlight the experiences and success stories of those that have prospered. SUBSCRIBE www.alcatel-lucent.com/blogs/gridtalk/ CONTACT lynn.hunt@alcatel-lucent.com VISIT www.alcatel-lucent.com/smartgrid GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 2 SOCIAL VIEW However, Katz says that achieving these benets isnt simply about buying the latest equipment, but more signicantly is tied to the social challenge of fully assimilating the new technology. Changing the business processes, training employees, adapting your organization and operations to the benet you can derive from technology in economics this is called the accumulation of intangible capital means that once you purchase the systems it will take you some time to get to that point, especially in large companies. Its called the lag effect. Weve typically seen this take three to ve years, because youre dealing with human beings and social systems. Katz notes that the experience of a corporate leader in a particular sector can have great inuence. In any given industry you might have one company say a Citibank or a company such as Oklahoma Gas & Electric that has been an early adopter in assimilating new technology. Behind that leader the rest of the sector tends comes along, and thats what ultimately makes the blip on the radar. He adds that in order to speed up adoption of ICT innovations, large companies need to implement change management programs and training. The workforce understands how technology has improved the opera- tional environment and sees how it ts in. In many cases, the programs need to be combined with incentives not necessarily material to adopt the new modes of operation. These could range from recogni- tion to additional training activities. MELDING CORPORATE CULTURES Successful technology assimilation takes careful planning with attention to human capital. As power providers increasingly migrate from proprietary networks to new architectures and services, the need for IP experts in the workforce will grow tremendously while increasing in value. Yet depending solely upon those experts wont be enough, according to Katz, who has served as a management consultant to the telecommunications industry for the past 25 years. Instead, he says, successful management requires a fully integrated approach to the melding of the new- generation ICT and core business processes. When managing in these situations, you cannot segment. You must have senior business unit managers who are completely uent and conversant with the new technology and all of its implications, he says. I think the biggest problems that Ive seen have been where management doesnt understand technology and they believe that they can rely on those internal techies to translate it to what they need. That creates a gap. They lose time, and they lose response capability to competitive pressures. In that situation they need to HIGHLIGHTS Achieving the benets of IP is tied to the social challenge of fully assimilating the new technology which can take three to ve years. Big data will be a critical tool for utilities looking to better understand consumer behavior, allowing them to tailor better products to specic segments of the population. In planning and executing new IP investments, it important for the seller and the buyer of the technology to be trusted partners. MANAGING THE IP EVOLUTION WITHIN AND OUTSIDE OF THE ORGANIZATION WITH RAUL KATZ, PH.D., DIRECTOR OF BUSINESS STRATEGY RESEARCH, COLUMBIA INSTITUTE FOR TELE-INFORMATION; ADJUNCT PROFESSOR, DIVISION OF FINANCE AND ECONOMICS, COLUMBIA UNIVERSITY BUSINESS SCHOOL The steady modernization of the electric transmission and distribution system based on IP will have social impact on all stakeholders, from government and power providers to the consumers they serve. The effect of information and communica- tions technology (ICT) on large business has been felt since the mid-1990s, says Raul Katz, Ph.D., Director of Business Strategy Research, Columbia Institute for Tele-Information; Columbia University Business School. While previously its boost to productivity has been most prevalent in industries such as nancial services, telecommunications and transpor- tation, we now will start to see other sectors, such as electric power, beneting much more. In its case, the focus of the main ICT impact will shift from internal business operations to smart grid and customer support. Adapting your organization and operations to the benet you can derive from technology in economics this is called the accumulation of intangible capital means that once you purchase the systems it will take you some time to get to that point. GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 3 SOCIAL VIEW either recycle themselves, learning and assimilating, or they have to create the space for younger generations who grew up in those new environments to assume leadership positions. BIG DATA AND CONSUMER BEHAVIOR Looking outside of the organization, its clear that big data will be a critical tool for utilities looking to better understand consumer behavior, allowing them to tailor better products to specic segments of the population. The consumption of electricity, while being a universal good, has been seen as pretty uniform, whether you live in the middle of a city or the countryside, Katz says. But everyone has their own power consumption patterns that may be particular to their lifestyle or business, with their own essential needs. And with telecommuting, the dramatic differences between ofces and residences are eroding because so many more people are working at home. This leads to new consumer requirements and services that can be tailored to those. In such cases your computer is essential it cant go down. So in the event of an overall power failure, you need to consider what utility can prevent this from happening for example, a backup power system that is maintained to provide assured continuity. Katz says that implementing these are the kinds of outside-the-box ideas will now be possible with advanced ICT. MOTIVATING COMSUMER ADOPTION A key part of the success equation for power utilities migrating to new technolo- gies means motivating consumers to embrace innovations such as smart meter- ing, dynamic demand pricing and overall energy conservation. With rates becoming more segmented and complicated, the consumer education challenge itself will become more complex. This means using all the tools available, including big data and social media anything that will help build and activate an engaged, educated commu- nity of customers. Education is critical, Katz says. If you were to tell your customers that they have to consume less electricity because that has an impact on climate change, youre going to get less of a following than if you perhaps say You know something? Youre consuming 50 percent more power than your neighbors. In a case such as this, the actual names would not be revealed, but data could be provided in a form such as In your neighborhood, heres the mean, the high and the low and here is where you t in. When you introduce that level of comparison of your behavior relative to those surrounding you, the social pressure is a key element. Thinking out of the box and out of the industry also can be effective, especially when you start with the consumers needs in mind. One of my students at Columbia developed this system where he used reward coupons from a major coffee chain to give to his startup customers if they could demonstrate that through recycling they were actually contributing to the environment in a certain way, Katz explains. He expanded the idea, getting a lot of cooperation from socially responsible companies that realized it was also good for business, and he was successfully soliciting change from his consumers because they were getting a little something extra for doing something good for the environment. CHALLENGE, RISK AND PARTNERSHIP Given the rate at which technology is changing, moving to new systems creates challenges and risks for any company. The challenge is addressing the question How am I going to choose the right solution something that will boost productivity the way we deliver our output and what are those technologies?, Katz explains. Secondly, how fast can we assimilate them, considering the necessary retraining required? When considering these critical issues, Katz believes it is important for the seller and the buyer of the technology to be trusted partners. One party holding the other at arms length could be dangerous, he says. I need to have the best possible visibility as to whats going on from a development standpoint. I have to consider the provider of my technology as my partner one who understands what my business is, what my needs are, and at the same time has a window on the future of research and development the things to come. I need someone who can creatively sit down at the planning table with me and help me make the right decisions. THE MOST IMPORTANT ADVICE What is the most important piece of advice Katz would give to power providers in terms of socially managing technology transitions? Get close to where the innovation cycle is; try to avoid being insular in terms of coming up with solutions only within the mindset of the industry, he advises. Katz notes that there is a great debate about whether large companies actually can innovate. Can big companies incubate? I think they can, but they have to change in the way they are being managed and how porous they can become to trends in their environment. We need to nd a way in which large companies can become better innovators through training and encouraging greater creativity on the part of the employees. They need to innovate beyond just keeping the lights on day in and day out. If you were to tell your customers that they have to consume less electricity because that has an impact on climate change, youre going to get less of a following than if you perhaps say You know something? Youre consuming 50 percent more power than your neighbors. GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 4 ECONOMIC VIEW For most utilities, this spending initially has been driven by regulatory or government stimulus, such as the US $7.8-billion Smart Grid Investment Grant Program funded through the 2009 American Recovery and Redevelopment Act says Mark Burke, Vice President, Intelligent Networks and Communications for DNV GL (formally KEMA Inc.) The funding initially has focused largely on AMI, but the entire value proposition to an electric utility includes distribution automation, transmission, teleprotection and other functionalities that can drive economic benet. The factors to be weighed when planning IP investments can be varied and extensive, depending on a utilitys business focus, budget and regulatory environment. Here Burke weighs in on ten strategies that operators can keep in mind. 1. EMBRACE STANDARDS Standards drive innovation while maintaining security and reliability, Burke notes. They encourage mass production, driving the cost of equipment down, while also enabling the development of an ecosystem of value-added products and solutions. They reduce the total cost of ownership for the systems they procure, but also encourage the development of devices that may leverage communications protocols to provide additional value to customers and the society at large. 2. PREPARE FOR DISTRIBUTED GENERATION Deploying a converged IP/MPLS communications throughout a service territory not only provides for increased visibility, automation and resiliency for all operations, but also positions the utility to better manage distributed generation from renewable energy sources such as wind power, photovoltaics and other intermittent energy sources. With IP/MPLS you can accommodate these in a common architecture and in a standards-based environment so that the unit costs are low over time, says Burke. As the smart grid environment matures and gets more diverse with renewables and other new challenges, the total cost of implementation will go down as well. 3. MITIGATE LEGACY COSTS Single- vendor proprietary systems utilities that traditionally have been used for support services such as SCADA, reclosers and other services have become very costly to maintain, particularly when their vendors have gone out of business. We had a one customer who purchased the intellectual property associated with one of their recloser networks, Burke notes. They then had to hire a lab to create the radio systems and the proprietary back ofce system. This gets very expensive when youre operating out over a very long time frame, as utilities tend to do. With IP/ MPLS utilities can maintain their TDM HIGHLIGHTS Investment in smart grid systems based on IP/MPLS is accelerating. Ensuring a maximum return on investment in IP requires managing these upgrades in a way that will bring the most value to utilities and their customers. Factors to consider in planning an IP migration strategy include regulation, standards, distributed/ renewable generation, legacy equipment costs, changing employment patterns and opportunities for monetizing advanced assets. Operators planning IP grid investments should select solutions that have a large vendor base and model those prior to implementation. INVESTING IN IP TECHNOLOGY: 10 KEY STRATEGIES FOR VALUE WITH MARK BURKE, VICE PRESIDENT, INTELLIGENT NETWORKS AND COMMUNICATIONS, DNV GL (FORMALLY KEMA INC.) Spending on smart grid systems based on IP/MPLS is accelerating. In fact, GTM Research forecasts that by 2016 about 6.8 billion will be spent each year on IP-based smart grid investment in Europe, with the largest share going to advanced metering infrastructure (AMI), distribution automation and utility enterprise systems. In the U.S., investment could hit US$35 billion in 2021, with US$200 trillion projected in global expenditures by 2030, according to Memoori Business Intelligence. Ensuring a maximum return on investment requires managing these upgrades in a way that will bring the most value to utilities and their customers. The entire value proposition to an electric utility includes distribution automation, transmission, teleprotection and other functionalities that can drive economic benet. GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 5 ECOMONIC VIEW services while at the same time taking advantage of the convergence and a standards-based solution that allows the migration to more IP services without interruption. 4. ANTICIPATE CHANGES IN EMPLOYMENT PROFILES Burke notes that with the move toward IP, job descriptions will change, as will the number of jobs. The greater level of automation and integration of distributed energy resources will have a stimulus effect on energy-related jobs, particularly in areas such as energy management, big data analysis, communications and other high-tech skill sets, he says. There also will be new opportunities in engineering, energy efciency, demand response, customer and behavior dynamics and the correlation of energy data with other industry and customer groups. 5. MONETIZE EXCESS CAPACITY Laying high-bandwidth ber throughout a service area can be a substantial investment, but also can open the doors to monetizing excess capacity with video and other communications services to more quickly recoup investment costs, even creating new prot centers. You have to look at the regulatory structure and become expert at that, then consider how the systems legally can be exploited by being entrepreneurial or establishing an unregulated subsidiary, Burke suggests. Consider the long-term economic benet, the committed infrastructure and the cost of ownership. You can try to develop it in house, you can outsource all or some of it or you can partner with others who are good at it. All of those examples have happened in different markets. 6. ENSURE BUSINESS CONTINUITY Ensure business continuity during the evolution by selecting solutions that have a large vendor base and model those prior to implementation, planning the migration with different techniques, such as overlays and segmentation, so that any failure can either have minimal or no impact on operations. Utilize the experience from other utilities and third parties if that expertise isnt already resident, Burke advises. 7. WORK TO SHAPE EVOLVING REGULATION Burke notes that regulatory thought is moving beyond AMI into areas such as integrating renewables, distributed energy resources and energy efciency programs. Power providers should really get involved with educating both consumers and regulators, which may have very small staffs and are overburdened, Burke notes. Only through that level of engagement will help maximize the value of moving to a more sophisticated energy system including IP/MPLS- based smart grid. The regulators are quite sensitive to the needs of the customers. 8. CONSIDER PUBLIC-PRIVATE PARTNERSHIPS Burke notes that in the areas where there is a traditional lack of investment in energy infrastructure there can be a large role for private investment in building new delivery systems. There is an interest in utility and private investment in campus infra, storage networks and community energy consortia sort of a macro grid development that may or may not involve the utilities. In some markets demand response cant be exploited by governmental entities and utilities need a third party to capture the value. So there are a lot of different potential combinations of public-private and utility participation. 9. GET ENTREPRENEURIAL From retail to wholesale, the advent of IP in the electric power industry is allowing a number of new business models to take hold. However, their value depends on how a utility is regulated. The Utelco model is making much more sense these days, although there are strict regulatory prohibitions in some markets, Burke notes. In the United States a public utility would have to decouple that part of the business from their rate base. Also, some resources might be inside a fenced substation, which makes it subject to NERC critical infrastructure restraints. Outside of the U.S. and the regulated investor-owned utilities the business case can be easier. 10. PLAN CONSERVATIVELY Burke advises that operators take the total cost of ownership over 20 years or more, and migrate toward a standards-based solution with a large, viable vendor community. Plan, scrub, forecast requirements that may be a bit higher giving running room to those, he says. Once an infrastructure is in place, engineers and users may use it in ways that may have not been forecasted, so be a bit more ambitious in forecast requirements and transition it in ways that can allow an error without a large impact on the current system. THE TAKEAWAY The key takeaway is that the new IP/ MPLS technologies offer a great deal of benets within the utility in cost savings, operational efciency and cost savings, and they also mandate a new way to operate, bridging those traditional organizational silos, Burke says. Its good to know that this already is being done by utilities in different parts of the world with great success. With IP/MPLS utilities can maintain their TDM services while at the same time taking advantage of the convergence and a standards-based solution that allows the migration to more IP services without interruption. GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 6 CUSTOMER VIEW Creos Luxembourg S.A. has successfully embarked on an ambitious, multi- faceted IP/MPLS project for its national electricity and gas network to replace its existing TDM-based communications system. Thanks to this single IP/MPLS network, Creos is converging services, including teleprotection, into one reliable infrastructure which allows it to remotely monitor the grid, improve fault isolation and system safety and enjoy operational performance enhancements and cost savings over multiple network management. Under the European Unions 20-20-20 energy savings objectives, by the end of 2018 the company will have installed smart meters with 95 percent of its 300.000 customers, who currently are served through approximately 9,000 km of power lines, 1,900 km gas pipes, four regional distribution centers and a staff of 700. Meter data will be collected every 15 minutes, brought to a central platform in Luxembourg, then back to the customer and also injected as data for SCADA and billing, says Patrick Colling, Creos Communications Expert. And smart meters are only the beginning for Creos. With a national goal of producing 11% of renewable energy by 2020, it also is implementing a major IP/MPLS smart grid investment utilizing advanced commu- nications throughout its network to better coordinate the transport of electricity from decentralized generation sources such as wind and solar installations, while further enhancing reliable, resilient and secure electricity distribution. PREPARING FOR THE FUTURE In early 2011 Creos recognized the need for a fresh round of investment in its communication network infrastructure. We took a look at what was new in the market, and after having analyzed it in the laboratory, we saw that IP/MPLS would provide the best support for us, adapted to the utility sector requirements, says Colling. IP-based services and CCTV are exploding, so we had to start thinking about whether our network is prepared for the next 10 or 20 years. Our high-voltage level is ready for this, thanks to the IP/MPLS technology we chose from Alcatel-Lucent providing a 10 Gb/s backbone interconnected to several 1Gb/s full mesh rings. Now Creos is turning its attention to the medium-voltage level, working closely with a third-party ber optic operator in Luxembourg. We have numerous medium- voltage underground cable ducts, Colling explains. Our partner is renting these ducts and putting in their own ber optic cable, then leasing ber back to us at no cost. So, its an even exchange; they use our ducts and we use their ber. The plan is that inside of ve years we will have all 3,000 medium-voltage stations interconnected with ber optics. These stations will be able to fully interact with the high-voltage stations, and all will be IP/MPLS-based. Given the tight smart meter implementa- tion timeline, Creos is relying on an interim TETRA-based solution using the IP/MPLS network in the high-voltage stations as the backbone to support communications between the medium-voltage stations and the data center where the TETRA servers HIGHLIGHTS Creos Luxembourg S.A. has successfully embarked on an ambitious, multi-faceted IP/MPLS project that includes intelligence throughout its electricity distribution network from power generation to smart meters. After one year of testing, teleprotection over IP/MPLS demonstrates the same level of performance as over a classical interconnection. Knowledge sharing with peers and providers is key for utilities stepping into the world of IP to save time and money. CREOS LUXEMBOURG: LEARNING TO GET THE MOST FROM IP/MPLS WITH PATRICK COLLING, CREOS COMMUNICATIONS EXPERT We had to start thinking about whether our network is prepared for the next 10 or 20 years. GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 7 CUSTOMER VIEW are located. The benets in using high- voltage stations as TETRA base stations are that we have no new ground to acquire, and there are no extensive installation costs since we already have our own cabi- nets and support there, so we only have to invest in the equipment for 50 TETRA base stations. On the SDH technology we had before we never could have offered this backbone for the TETRA network, Colling says. MEETING THE HIGHEST STANDARDS REQUIRED FOR TELEPROTECTION Colling explains that Creos must adhere to rigorous standards of reliability and resiliency in its network design, and points to teleprotection as an example of how a traditional, critical service can be successfully supported with IP/MPLS. With latencies of 5ms-6ms between connecting nodes, you have to have a very high level of control to guarantee service and performance, he notes. A year or so ago we invited Alcatel-Lucent and another vendor to come and analyze the situation and test four current differential protections talking together over four high voltage stations inside the ring. We set up a logical ring between protection equipment, based on the IP/MPLS network that we have, and measured latencies, including packetization and depacketization of less than 6ms. It was a really great result. Since the beginning of 2013 teleprotection has worked throughout our network without any incidents, and we can say that for us there is no difference in teleprotection between the classical interconnection and IP/MPLS. Cybersecurity is another concern that Colling says is being handled well by Creos new investments. IP is the best- known protocol around the world, so there is absolutely the need to dedicate a lot of time to analyzing how best to bring cybersecurity into the transmission system, he says. That took us a complete year. We analyzed it and have now nalized our design assisted by Alcatel- Lucent. It includes things like encryption, rewalls and new security features for routers. You need to analyze your services and how to secure them from beginning to end, and we are convinced that through our investments we have done just that. CONFIDENCE IN THE IP EVOLUTION Colling says that Creos has had no qualms about making its transition to IP/MPLS. We were convinced after analyzing the technology that it would operate as needed. When you buy a car you have faith that it is going to work properly and safely, and its the same with this technology. Today we can say we need IEC 101 or IEC 104 or we need 10Gb/s or 100 Gb/s and we get it. Colling adds that, thanks to standards, the performance of new technology can be much more easily proved in the labs. IP/MPLS just makes things easier. Operational ease is also a big plus. With PDH and SDH one had to execute numerous time consuming and complicated actions before transporting that type of data over non-analog support. Now if someone bought a camera and asks to make it operational immediately, connecting two specic points, you can say yes. Even two or three years ago you had to ask for documentation, get information on the interface, look at the capacity of the modem and so forth. Today that is mostly unnecessary. IP/MPLS just makes things easier. The employee learning curve hasnt been a problem for Creos Communication specialists, according to Colling. We had a six-day training session in Antwerp on our equipment, specialized for our people, he says. Then, three of our guys implemented 25 routers by the end of this year. We interconnected and congured them, created the MPLS process, routes, and pipes. We were able to handle everything, including creating services and the APIs. ADVICE FROM SOMEONE WHO HAS BEEN THERE Colling suggest that when embarking on an investment of this magnitude it is important to visit peers to enrich your understanding. This year we had other utilities coming to Luxembourg to visit. We had an exchange and everyone went home with a better understanding. So before you choose a provider, go visiting and compare platforms. That is the most important rst step. With an exchange of experiences you can save a lot of time and money. The Creos migration is ongoing. We will be nished in two or three years, but its not really any pressure as long as we can run two networks, so we do it step-by- step, keeping each service running in a trial period for one or two months. says Colling. So take the time to understand your services and how they would work on your own IP/MPLS network. Play with your new technology, and use that for learning. At rst you may start out slowly, but later on you will progress faster. You are not alone if you have the support of your vendor. Colling adds, Our SDH/PDH equipment has been running for 12 years without any fault, and now for two years weve had IP/MPLS. We expect it to be as stable as the SDH/PDH over the next ten years and beyond. Take the time to understand your services and how they would work on your own IP/MPLS network. Play with your new technology, and use that for learning. For us there is no difference in teleprotection between the classical interconnection and IP/MPLS. GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 8 EXPERT VIEW deploying these technologies. Fortunately we have proven that a single, converged infrastructure with IP/MPLS is the best way to support all of it in a mission-critical infrastructure. Vrancken identies four main challenges associated with the move to IP/MPLS among power utilities. The rst consideration is how to ensure a reliable and high-performance network. Then, how do you attain the kind of exibility that can combine legacy and IP applications? You also have to look at how well you will be able to scale your network, and nally, how you will manage all of your converged services in a single way. Once utilities understand these factors, they will be prepared to move forward on a smooth migration path that will provide the optimal return on investment. RELIABILITY AND PERFORMANCE Vrancken points out that the time is now for utilities to plan for implementing a new-generation, intelligent IP/MPLS communications infrastructure if they havent already begun doing so. The latest grid management applications are moving to IP, but that doesnt mean utilities can use the Internet for communicating command and control messages with the grid. Since the power grid is considered to be critical infrastructure, communication technologies must be able to deliver a high level of reliability and performance. A 99.999 percent reliable IP/MPLS infrastructure and intelligent sensors throughout the distribution layer and at consumer end points yields more reliability, fewer outages, faster response times to issues, reduced cost and increased efciency all while allowing more seamless integration of distributed renewable energy sources, reducing carbon emissions. A single IP/MPLS network allows all of that, and in such a way that you can optimize the bandwidth for multiple applications without impacting the performance of any of them. It also means that this same single IP/MPLS network can also cope with all Enterprise trafc and applications , Vrancken says. Of course, with IP protocol reaching to all corners of the network, cybersecurity becomes an important issue that utilities must address. Were pushing very hard to have IP/MPLS deeper in the network, so security is integrated throughout our solutions all included from the beginning in the design. FLEXIBILITY AND RISK MITIGATION When going through a migration, the main benet of IP/MPLS is the exibility with which it enables and adopts new appli- cations smoothly while still supporting legacy services, mitigating risks and allow- ing a utility to efciently take advantage of extensions and new technology. This means that even while utilities introduce new technologies, they are not forced to migrate their older, existing grid manage- ment applications. We fully integrated those in our solutions portfolio you can have the legacy interface and function, but it can be running on the IP/MPLS network, says Vrancken. Often the biggest challenge in supporting legacy interfaces is that a converged network has to cope with all of them under very stringent requirements. HIGHLIGHTS IP/MPLS is providing unprecedented capabilities for managing electric grids, though utilities must plan their migration carefully to avoid pitfalls and assure maximum success. A single IP/MPLS network can optimize the bandwidth for multiple applications without impacting the performance of any of them. A private IP/MPLS utility network will offer exibility, support for both legacy and IP applications, scalability and easy management. Each utility has a unique set of requirements that need to be considered when planning its evolution to IP, so careful evaluation and testing is important. PLANNING THE PATH TO IP SUCCESS: RELIABILITY, SECURITY AND EFFICIENCY WITH BART VRANCKEN, UTILITIES SOLUTIONS ARCHITECT, ALCATEL-LUCENT After the success in the Telco market, IP is now revolutionizing the utilities world with unprecedented operational efciency, exibility and control. In fact, you could say that migrating to IP has become a mandatory for success going forward. Yet as with any major transition, power providers need to plan their migration carefully to avoid pitfalls and assure maximum success. Utilities telecom used to be very simple, handled in the background with a very small team, says Bart Vrancken, Utilities Solutions Architect, Alcatel-Lucent. The explosive growth in intelligent grid devices with communication capabilities was not foreseen at all several years back. But now we see numerous examples of customers EXPERT VIEW www.alcatel-lucent.com Alcatel, Lucent, Alcatel-Lucent and the Alcatel-Lucent logo are trademarks of Alcatel-Lucent. All other trademarks are the property of their respective owners. The information presented is subject to change without notice. Alcatel-Lucent assumes no responsibility for inaccuracies contained herein. Copyright 2014 Alcatel-Lucent. All rights reserved. SI2014013973 (January) Teleprotection is a good example for this, since, for example, only 6ms of latency is allowed, Vrancken notes. We have proven that IP/MPLS can support teleprotection through our testing with third-party labs and in real-world operations by customers such as AltaLink in Canada and Creos in Luxembourg. Each utility has a unique set of requirements that need to be considered when planning its evolution to IP, so careful evaluation and testing is important. To effectively manage the risks, utilities normally set up a kind of pilot to test the new technology and applications, maybe with some third-party products, says Vrancken. At Alcatel-Lucent we have introduced our Utility Solutions Lab, where we test the integration of Alcatel-Lucent equipment with partner technology, simulating the high-voltage environment, the wide-area network, the distribution network, and under multiple- use scenarios. With this lab we try to mitigate the risk associated with moving toward the new technology. Our customers are welcome to visit that lab, where we can build a model of their infrastructure and simulate their environment. SCALABILITY: PREPARING FOR THE EXPLOSION IN IP DEVICES Over the next decade the number of devices on utilities networks will explode exponentially, explains Vrancken, meaning that smooth scalability is essential. One study projected that by 2015 we will have as many as 50 billion devices connected to each other all over the world. Twelve percent of these will be in utility space. While traditionally SCADA data has always been sent back to the central control center, now substation automation is bringing intelligence lower into the network, allowing a station itself to take action based on information it is getting from other stations and from central control. Once youre talking about the low-voltage side of your network it means a factor of 100 more nodes than on your high-voltage transmission network. And, by the time you move to a different focus level deeper in the network, you have another device expansion factor of 100. So, if you have 100 high-voltage substations in a small country such as Belgium, for example, the low-voltage distribution sites will grow by a factor of 1,000. The exibility and automation of the IP/MPLS network allows and supports that kind of scaling, so you need to make sure that management is staying on top of that. MANAGING CONVERGED SERVICES EFFICIENTLY This kind of device growth and the move toward realizing the efciencies of a single converged network necessarily creates more complexity. Yes, its complex, but with one single operating system, which can encompass all of the services in an efcient way, and which also supports the DWDM, microwave and enterprise products, you are already half way says Vrancken. On top of this NMS, we developed a dedicated utilities web portal called Service Portal Express, which allows you to add e.g. a substation automation device, or a CCTV camera somewhere in your network, you choose the basic parameters, the connection points, and it takes all the necessary actions. Vrancken adds that although utilities should invest IP/MPLS experts to manage the network, its eld force doesnt necessarily need to have that same skill level, thanks to some of the available management tools. When you have the single network and use Service Portal Express, your maintenance becomes a lot easier. So you have your expert IP/MPLS team with the eld force working over the portal without the necessity of them knowing all of the details they can focus on the services and applications themselves, providing an immediate return on investment. ENSURING RETURN ON INVESTMENT Vrancken notes that Alcatel-Lucent has a department focused on solutions economics, helping its customers prove the business case for their IP evolution. They can analyze investments, building plans and customer satisfaction. That way their return on investment will continue years from now, he says. I would recommend that utilities embarking on this path talk to their peer utility providers who are already in the process of migration, says Vrancken. Although each environment is unique, there is a lot to be learned from their experiences, their challenges, how they do training, how to set up operational teams and so forth. Also, he says, talk to Alcatel-Lucent. We can share our experience in utility space, having worked with many other operators in countries around the world to help them nd the best migration plan per their needs. Although utilities all have very specic conditions related to their infrastructure, their customers and the countries in which they operate, there still is a lot of common ground on the technology side to go along with our local knowledge, and that is where we can be of help. SUBSCRIBE www.alcatel-lucent.com/blogs/gridtalk/ CONTACT lynn.hunt@alcatel-lucent.com VISIT www.alcatel-lucent.com/smartgrid One study projected that by 2015 we will have as many as 50 billion devices. Twelve percent of these will be in utility space. We have proven that IP/MPLS can support Teleprotection.