| Cisco has played a pivotal role in revolutionizing the Internet and digitalizing voice communications. According to its current management, the next «network revolution» could be in the global energy distribution system. At the same time, Cisco believes that a comprehensive strategy called Cisco® Smart Grid will help utilities and their customers more efficiently manage the delivery and consumption of electricity, as well as reduce the harmful impact of the energy industry on the environment. This is described in an article by Cisco Vice President of Networking and Security Marie Hattar.
Cisco's Smart Grid strategy calls for a two-way, end-to-end communications infrastructure for the electric distribution network. This IP-based infrastructure will span the entire energy system from the power plant to the retailer, home, or business. Today, all communications in the energy grid are typically one-way and provide limited insight into energy consumption.
For example, meters in residential buildings are checked at best once a month, or even once a year, i.e. this system does not work in real time. Communication in it is not two-way, limited to one-way transfer of historical data without feedback, error analysis and continuous efficiency improvement. The new communication infrastructure will allow for reliable two-way communication with intelligent functions and integrated management of energy supply and demand. As a result, utilities will be able to better plan their work, increase the reliability of energy supply and reduce operating costs.
If Thomas Edison were to come back from the dead, he would find little change in the energy system. With little investment in modernization in decades, our energy system is outdated and inefficient. Moreover, it is designed to meet peak demand. As a result, vast amounts of generation and distribution capacity sit idle most of the time, further reducing the overall efficiency of the system.
Meanwhile, demand for electricity is growing faster than supply, energy companies are paying high taxes, and energy systems are periodically failing, costing the United States $50 billion a year. And the situation is getting worse as consumers use increasingly energy-hungry appliances. Just imagine what will happen when we start driving electric cars and plugging them in to charge at roughly the same time every night!..
Another problem is that there is no place to store large volumes of generated energy, and if electricity is not used, it is simply lost. At the same time, the process of generating electricity pollutes the environment, releasing hydrocarbons into the atmosphere. This is why we are so interested in electric vehicles: their batteries can be used to temporarily store energy and transmit this energy to distribution networks during peak load hours. In addition, electric vehicle batteries can be adapted to store electricity from renewable sources (wind generators, solar panels, etc.). In this case, the accumulated energy can be consumed when there is no wind, the sun is covered by clouds, and the demand for electricity remains high. In other words, an electric car can become the first device in history for industrial energy storage, which will reduce hydrocarbon emissions into the atmosphere. These functions should also be regulated using a communication mechanism and an integrated management system for the intelligent infrastructure of the Smart Grid. The intelligent functions of the Smart Grid will give our energy system a «second wind». They will help utilities optimize the use of existing resources without investing extra money in building additional generating and distribution capacities. All the gains will come from better management and optimal energy distribution.
Another problem with existing energy systems is the inability to integrate large amounts of energy from renewable sources (wind, sun, etc.). These sources provide energy when the sun shines and the wind blows, which does not always coincide with peak load times. To increase the role of renewable sources, it is necessary to organize a two-way flow of electricity, which requires communication technologies and communication between transformers, as well as intelligent functions. Smart Grid can provide all this.
Smart Grid includes home energy management systems, smart meters and sensors installed in residential buildings. As you know, knowledge is power. Accurate information about home energy consumption helps people reduce energy costs by 15 percent without compromising their convenience. Home energy management systems will automatically manage the energy consumption of major household devices in the background according to the rules set by their owner. Thus, you can automatically turn on your washing machine, dishwasher or pump during the hours when energy costs are minimal. At the same time, you can choose the energy source yourself (a conventional power station, a solar battery, a wind generator, etc.).
For utilities, the Smart Grid will help them reduce failures and disruptions and reduce peak demand for electricity through better management. Utilities will be able to better monitor the repair and maintenance of their equipment and identify potential «bottlenecks» in their systems in advance. This will allow them to carry out preventive maintenance and thereby prevent accidents, and if an accident does occur, to immediately identify its source and «treat» the power system remotely. As a result, the efficiency of energy transmission will increase dramatically and its losses will decrease. In addition, utilities will improve the reliability of energy supply. If a failure occurs in any segment of the power system, they will be able to quickly activate other energy sources and transmission channels using a new communication mechanism. Currently, the stability of the power system is achieved with the help of flexible but expensive redundant power plants. Smart Grid technology regulates demand in such a way as to eliminate the need for redundant stations, which dramatically reduces the costs and investments required to create reserve capacity.
Smart Grid technology promises many benefits. For example, the active use of renewable energy sources will significantly reduce dependence on imported oil and gas, thereby increasing the economic security of countries that do not have sufficient primary energy resources. In any case, when energy losses are reduced or energy consumption is reduced, less carbon dioxide is released into the atmosphere, and this is good for both business and all the inhabitants of our planet.
Cisco Smart Grid is a combination of products, technologies, services, and ecosystem partners. Our goal is to be as broadly involved as possible in building this infrastructure. We are ready to provide it with highly secure routers and switches designed for utilities, systems for data centers, and technologies like Cisco EnergyWise that help companies manage the energy consumption of their network devices.
Our products and services operate in critical areas of the energy infrastructure. One is automation of energy transmission and distribution, another is connectivity to smart meters, and a third is energy management for homes and businesses. We are also ready to build powerful data centers where utilities will process information coming from Smart Grid sensors. These are the areas where we intend to work actively. Each of them is responsible for a specific department or group. Together, they will build a unified Smart Grid communications infrastructure at all levels — city, national and regional.
Cisco works with governments of several countries and the world's leading energy companies. In addition, we are considering the possibility of partnership in the energy sector with system integrators, suppliers of «smart meters», energy system integrators, suppliers of automation equipment and other market participants.
We participated in the construction of the Internet. Today, a new stage of building large networks is beginning in the energy sector. The effect of deploying the Smart Grid infrastructure will be 10 or even 100 times greater than the Internet: every home and every company has electricity, so in principle any home or corporate device can connect to the new network. In the future, a refrigerator, a washing machine, and any other device can become «smart» elements or nodes in the Smart Grid infrastructure. This process can be considered a fundamentally new stage in the development of the Internet, in which connections will be established not between people, but between machines. At the same time, many intelligent nodes and sensors will operate in the network. This will require a very reliable communications infrastructure based on standards that ensure compatibility and interaction of all connected devices. At Cisco, we have done a lot to turn IP into a generally accepted standard, and such efforts had to be repeated over and over again, and we believe that we, like no one else, can cope with a similar task in the public utility environment.
Over the past 20 years, many critical infrastructures in finance, communications, defense, and security have migrated to the IP standard. However, the Smart Grid IP network is not simply about opening up energy networks to the Internet. The Smart Grid is not an open platform, but a communications fabric that we believe should be woven using IP standards. At the same time, the Smart Grid will use best practices in the field of protecting critical infrastructures. To do this, all business functions will be segmented, and, depending on the segment, certain security measures (authentication, authorization, integrity control, confidentiality, and threat prevention) will be applied to them.
Projects of this scale inevitably encounter problems. For example, energy systems operate differently in different countries, so products and services for North American energy systems would not be suitable for use in Europe. It is also difficult to agree on common standards, since sensors and meters are made by many different companies. However, standards are necessary — otherwise, these devices cannot be connected to the general network. This situation is reminiscent of the early stages of cellular communications, when there were many different standards and devices on the market that needed to be brought to a common denominator.
The Obama administration considers the construction of Smart Grid energy infrastructure one of the priorities for the United States. The US Congress has allocated $30 billion for this and other initiatives aimed at modernizing national energy systems. At the same time, Cisco Smart Grid is a global initiative. According to our estimates, by 2013 a market with an annual turnover of $20 billion will have been created in this area. That's why Cisco has made the Smart Grid program one of its top corporate priorities for 2009 and beyond.
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