The global transition to electricity smart grids is creating new business opportunities for broadband power line (BPL) communications vendors, driven by utilities' need for real-time, two-way communications networks in their electricity distribution networks.

This new communications infrastructure will support functions such as automated meter reading, the delivery of electricity usage and pricing information to in-home displays, the command and control of smart in-home devices (e.g., smart thermostats, heating/AC systems and white goods), and applications for plug-in electric vehicles (EVs) and home micro-generation (e.g., solar panels).

BPL communications vendors have repositioned their technologies to address this global phenomenon of smart grid development, and they can take a share of the billions of dollars that utilities will invest in their communications networks over the next 25 to 30 years. The opportunity is there, and is of sufficient scale, for BPL vendors to develop lasting, profitable businesses.

Developing a communications network over existing power line infrastructure is potentially appealing to utilities in terms of costs and network ownership. The abundant bandwidth provided by BPL communications also gives utilities plenty of headroom to develop applications beyond those envisaged today.

However, there is fierce competition from alternative wired and wireless communications technologies. High-data-rate power line communications (HDR PLC) technologies providing non-broadband data rates, such as G3-PLC and Prime, are emerging from Europe and are backed by several major continental utilities, including ERDF, Iberdrola and Endesa. Other competing technologies include private wireless mesh networks, which have gained early support in the U.S., and solutions based on public cellular or DSL networks.

The latest Heavy Reading Insider report, "Smart Grids Boost Broadband Power Line Communications" examines the current and future role of BPL communications in the context of the global development of utility smart grids and provision of broadband Internet services. It reviews the way that vendors are incorporating BPL into their solutions and compares their approaches. The report profiles nine leading vendors of BPL/PLC solutions for utility smart grids.

For their smart grids, utilities will choose the technology (or often a mix of technologies) that they believe best meets their needs, based on criteria such as cost, performance, scalability, ease of rollout, technology maturity and longevity. They will look at the business case in light of the utility's envisaged smart grid applications, and in conjunction with the characteristics of its electricity network (e.g., number of households per LV transformer, the presence of trees, the mix of underground and overhead cabling) to determine the appropriate technology or mix or technologies for its smart grid.

How compelling BPL is compared to other technologies will depend on what a utility requires for its smart grid. If the company plans to do smart metering with few additional services, then it will probably look closely at HDR PLC instead of BPL. It may not consider the extra headroom of BPL to be a benefit at all. For a utility with ambitions for large-scale expansion into home automation or home security (or even Internet access), broadband bandwidth will be an advantage.

Communications providers and equipment vendors must see BPL as a threat to any plans they may have to try to capture extra spend from utilities rolling out smart grids. BPL will be used to supply broadband Internet and other communications services in limited circumstances; and if broadband Internet is supplied by utilities as a marketing tool or as a low-cost add-on service, it will also encourage continued price erosion on broadband Internet services.

— Simon Sherrington, Analyst, Heavy Reading Insider

Smart Grids Boost Broadband Power Line Communications, a 23-page report, is available as part of an annual subscription (12 monthly issues) to Heavy Reading Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.heavyreading.com/insider.