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Utilities to Pump $11.2B Into Smart Grid – Study

Jason Meyers
8/26/2014
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The smart grid as a service market will exceed $11.2 billion by 2023, a new report from Navigant Research forecasts, signaling the growing importance of communications technology in the utility sector.

Smart grid as a service -- or SGaaS -- platforms essentially outsource the communications functions of the smart grid, meaning more utilities will rely on communications service providers and technology vendors for the communications functions required of services such as smart metering, distribution and substation automation and analytics.

The development would be a major shift for utilities, which are grappling with the challenges of operating outdated communications networks but have been historically slow to migrate to advanced communications technologies. (See UTC Telecom 2014: More Power to You.)


For in-depth coverage of the smart grid and other utility communications topics, go to Light Reading's dedicated utility content channel.


Navigant's report predicts that outsourcing of communications functions related to smart grid deployments will become more palatable for utilities as they struggle with budget constraints and a dearth of internal IT intelligence, and as cloud-based solutions prove successful for businesses of all types. The report cites $1.7 billion in SGaaS spending in 2014.

If it pans out as the Navigant report predicts, SGaaS could provide market growth opportunities for telecom industry vendors and service providers that have traditionally not seen as much business from the utility sector. AT&T Mobility LLC , Verizon Communications Inc. (NYSE: VZ), Sprint Corp. (NYSE: S), Alcatel-Lucent (NYSE: ALU) and Ericsson AB (Nasdaq: ERIC) are all cited as key industry players in the report.

— Jason Meyers, Senior Editor, Utility Communications/IoT, Light Reading

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thebulk
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thebulk,
User Rank: Light Sabre
8/26/2014 | 12:33:51 PM
makes sense
This makes a lot of sense for utility companies, if they can not mantain their own communications networks then outsourcing that piece is a good fit. 
jabailo
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jabailo,
User Rank: Light Sabre
8/26/2014 | 1:15:46 PM
Networks as a Utility
It could be the final evolution of the Internet, much as we did with water, energy, sewage, transportation, mail delivery...now digital communications.   Public Utility Districts in rural areas already supply optical broadband, in many cases at Gig speeds, faster than what commercial customers have been getting in cities!   

Also, there are many mobile applications that are data-only and need a low bandwidth, but pervasive system.  For example, keeping track of buses, where subscribing to phone networks would be prohibitive.

 
jasonmeyers
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jasonmeyers,
User Rank: Blogger
8/26/2014 | 1:57:12 PM
Re: makes sense
Agreed - I just think it will be a matter of the communications decision-makers within the utility organizations trusting that a cloud-based managed service will meet their expections for reliability, security, etc.   
DHagar
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DHagar,
User Rank: Light Sabre
8/26/2014 | 2:26:50 PM
Re: makes sense
@jasonmeyers, which also assumes that they even understand what their needs are and how they are different with the smart grid.  Also, if they are going to outsource segments or the total function, as with the cloud, you won't get want you want if you don't know what you need.

 
bosco_pcs
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bosco_pcs,
User Rank: Light Sabre
8/26/2014 | 2:42:43 PM
Re: makes sense
A minor nitpick, people should stop bolting 'aaS' on to everything as if rebranding will create markets!

Back to Smart Grid, it is interesting Echelon decided to get out of smart grid (a portion of it anyway) biz so it can focus on IIoT. Perhaps size matters and it sees writing on the wall, so it chooses to refocus its asset and it has nothing to do with smart grid viability
thebulk
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thebulk,
User Rank: Light Sabre
8/26/2014 | 2:45:19 PM
Re: makes sense
I am also a bit sick of seeing aaS on everything. But sometimes it does make sense.
MikeP688
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MikeP688,
User Rank: Light Sabre
8/26/2014 | 4:02:23 PM
Re: makes sense
It is a "buzz" that gets old--for sure.   But I see no other choice as we have to deal with climate change and the changing dynamics of energy itself--including the continued challenge to traditional power genearting capabilities.    For instance, Lake Mead is at its' lowest level--and if it drops to 900 Ft I believe, the generators @ Hoover Dam will stop supplying electricity.   With San Ofore offline in California and a clamour to decommision the last working nuclear plant in California, there needs to be a radical rethink.  There is a big question indeed as to whether this will work--but there is hardly a choice.   Elements of it has already been happening with the installation of smart meters and ways to help control the flow of power as it is--but that can only so far.    
thebulk
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thebulk,
User Rank: Light Sabre
8/26/2014 | 10:50:02 PM
Re: makes sense
I think as explained here it has a good shot, but there can always be complications.
MikeP688
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MikeP688,
User Rank: Light Sabre
8/27/2014 | 12:05:21 AM
Re: makes sense
Complications are part of change--but I view this as of those "Must Do's" in order to guarantee a reasonably decent energy future.    It is worth a shot.  
thebulk
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thebulk,
User Rank: Light Sabre
8/27/2014 | 12:07:10 AM
Re: makes sense
I agree, smart grids will be a key factor in securing the energy future of the planet.
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