Telecoms and the Smart Grid—Looking Beyond Communications

As utilities roll out Smart Grids, they are working more closely with telecommunication providers than ever before. For many in the energy industry, however, that relationship begins and ends with communications. In fact, communications is just one small part of the story. As the Smart Grid evolves—and as utilities’ data center and security requirements evolve with it—it’s time to take a closer look at the many other areas where telecoms can provide value.

Moving to the Cloud

Service providers like AT&T have been early entrants in cloud storage services, software-as-a-service (SaaS), and other cloud solutions that let customers “pay by the drink,” as we say, or pay for just those IT services they use, rather than building out full-blown data center services themselves. Just a couple years ago, utility executives I spoke with were skeptical of these kinds of services. A common refrain was, “Cloud storage, maybe, but we would never host applications in the cloud.” Today, that perception is changing.

Partly, this shift results from people simply growing more comfortable with the idea of cloud services. After all, when utilities now commonly host their human resources applications in the cloud, or their payroll services in the cloud, it’s hard to argue that cloud services are inherently impractical or unsecure. Fundamentally, however, I suspect the warming attitudes toward the cloud stem from a reaffirmation within utilities of their core competencies and business models. Given the choice, investor-owned utilities would prefer to direct their efforts toward providing reliable electricity at an affordable cost—rather than building and maintaining vast server farms.

As the Smart Grid evolves, however, a utility’s data center requirements grow exponentially. Consider: Many utilities deploying smart meters go from one meter read per month to as many as 96 reads per day, per meter. A daily meter reading may only represent a few kilobytes, but multiply that by millions of meters, and you’re suddenly talking about a vast amount of data. Do utilities really want to be responsible for that data, and for investing in the massive data center upgrades necessary to store and protect it? Or does it make more sense to use cloud-based services, and pay only for the data center resources they need?

Peering Deeper into the Data future will encompass distributed micro-generation from solar panels, electric vehicles, and more, creating far more complex (and often competing) power requirements. To successfully manage that grid, utilities will need a much deeper understanding of consumption behavior—and a far more extensive data analytics capability than they have today.

If there is one thing we hear constantly from utilities, it’s that they are behind in this area. Many in the industry report that even when smart meters are deployed and providing huge amounts of information, much of the data is never mined or evaluated. And today’s smart metering projects are still in their infancy. How much more data will utilities have to contend with over the next five years?

Major telecommunication carriers like AT&T already have analytics infrastructures in place to accommodate massive amounts of data. This should make sense; AT&T alone sees more than 27 Petabytes of data traverse its global network on an average business day. It’s the ability to perform sophisticated analytics on enormous, dynamic data sets that allows telecoms to plan for changing capacity requirements, pinpoint infrastructure vulnerabilities, predict when network attacks are likely to occur, and more. And it’s exactly that kind of analysis that will be needed to enable intelligent Smart Grid distribution and capacity planning.

This kind of analysis, however, is not something the average IT department can simply pick up and add to its responsibilities. It requires highly specialized tools and expertise. At AT&T, most of these capabilities come from AT&T Labs, where they are developed by PhD scientists with decades of experience in data analytics.

Securing the Grid

Along the same lines, telecom providers can also offer valuable security expertise. As utilities contend with a dizzying list of federal, state, and internal security requirements, they once again face a question of core competency: Should they invest in developing state-of-the-art IT security organizations internally? Or, should they outsource those tasks to organizations with proven expertise in this space?

Telecom providers are a natural choice for managed IT security and security consulting, having already invested significant resources into building out security practices to protect their own global communication networks. Telecoms observe malware evolving every day, and have developed the infrastructure necessary to detect it, classify it, and predict trends in malicious activity—expertise that would take utilities many years and significant investment to develop on their own. For these reasons, many utilities are now looking to telecom providers for everything from managing the security of Smart Grid communications, to helping achieve NERC CIP certification, to running a security operations center.

These are just a few of the ways that telecoms can support the growing IT needs of utilities. Energy suppliers are already relying on telecom providers for Smart Grid communications. It may be time to take a closer look at what else they have to offer.

How do you feel telecoms can support the IT needs of utilities?  What do you see that is working now?  What needs to be changed for the future?  Your insights will be most appreciated by your fellow readers.
Rita Mix Utility Industry Lead Marketing Manager AT&T About Rita