More is expected of the power grid than ever before, especially as air conditioning becomes an even more typical feature of summer life and consumers grow to expect uninterrupted power wherever and whenever they want it.
To keep pace with demand, power utilities must look closely at a different kind of power, i.e., the power of the smart grid to sustain and improve the security, reliability and efficiency of the grid.
Key to the smart grid is a dynamic communications network that is secure, highly scalable and always available.
“Such a network must reach out to the periphery of the smart grid to enable end-to-end visibility and control for the utility,” according to a recent paper by Alcatel-Lucent (News 
- Alert), “Dynamic Communications for the Smart Grid: Driving smarter energy management and usage.” As the authors point out such a network,”Must support the smart grid’s potential to generate massive amounts of real-time data, and it must enable the distribution network to support the monitoring and management of millions of devices and smart meters in real time. And it must be cost effective.”
A dynamic communications network ensures reliable power delivery and quality by employing a wide area network infrastructure based on IP and Multiprotocol Label Switching (IP/MPLS) combined with the appropriate sensors in the distribution network, according to the paper. This allows power utilities to collect and transport increased volumes of real-time usage data that enable DA and Substation Automation, and in case of an outage, an IP/MPLS infrastructure enables smart grid fault detection, allowing protection applications to take immediate and automatic actions to limit its spread, and then dispatch the right work force with the best tools and most accurate information to restore power as soon as possible.
A smart grid network also delivers high quality power combining a robust communications infrastructure with smart meters at the periphery of the grid and smart sensors embedded throughout, distribution operators can deliver consistent high-quality power despite the increase in distributed and variable power sources, motorized appliances and other factors that could reduce quality.
Operational efficiency and environmental renewability are improved with a dynamic Communications network, too. Such a network improves communication at the periphery, and when combined with an IP/MPLS-based core network that is highly reliable, fast and secure, allows power utilities to rapidly transport the data required to manage the more complicated electricity flows of renewable power sources, according to the paper. This same foundation also drives efficiency.
While upgrading to a smart grid is very cost-intensive, Alcatel-Lucent has shown that it also brings cost savings that more than make up for the investment.
The financial benefits can easily exceed $100 million over a 10-year period according to a Utilities Telecom Council (UTC) research paper, noted Alcatel-Lucent. Although the cost of implementation is significant, the Net Present Value (NPV) of the project is a positive $292.7 million and the Internal Rate of Return (IRR) is calculated at 13.8 percent, or 55.5 percent after customer satisfaction is factored in, calculated Alcatel-Lucent in its paper.
It should also be noted that the deployment of a dynamic communications enabled smart grid approach is a way that electric utilities are literally and figuratively powering their way into the communications business under what has been called “UTelco,” and are leveraging the communications network to create additional and innovative new revenue streams.
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