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Top 5 Considerations for a Utility Wireless Telecommunications Strategy

image credit: Matthew Acton

In developing strategies and business cases for utility telecommunications networks, there are 5 considerations in my experience that set the direction and drive the narrative.

Utilities and infrastructure intensive industries (including transportation, energy and mining) currently own and operate a range of wireless technologies to meet the operational requirements for a safe and reliable service.

There are many use cases for wireless voice and data services for utilities including:

  • Land Mobile Radio systems providing critical Push-to-Talk communications during catastrophe to a mobile and increasingly connected workforce
  • Mesh radio networks providing Smart / Advanced Metering features such as billing information and remote disconnect (and emerging customer 'black start' inverter controls)
  • Broadcast radio networks for telemetry and SCADA to monitor and remotely control plant and equipment
  • Microwave radio providing the back-haul data pipes to bring it all together at a central control/data center.

Often the telecommunications solution is deployed at a point in time by use case, resulting in independent, bespoke networks of proprietary technologies.

This private telecommunications infrastructure collection is often complemented with a costly grab bag of mobile data 2G/3G/4G SIM cards from a local carrier for smartphones and mobile computing, vehicle telematics, revenue metering, coverage infill and additional Internet of Things sensors such as equipment monitoring and fault indication.

The Operational Technology applications required to service changing customer needs are evolving, and the demand for mission-critical wireless data continues to increase; whilst needing to maximize shareholder return (i.e. maintaining or reducing expenses, recovering regulated investment).

To aggregate wireless data needs, many utilities are considering their wireless telecommunications strategy and the business case for deploying a private wireless network, such as evaluation the of architectures and technologies including 3GPP standard LTE, LTE-M, Digital Mobile Radio, P25 Phase II or WiSun Alliance mesh.

Below are the top five considerations for a wireless technology that are the most sensitive to the options analysis and the cost model outputs used to develop a compelling business case.

1. Changes to external obligations

There may be an external trigger, either proposed or eventuated, that forces a re-evaluation of the utilities current wireless technology mix. It could be a change to a legal obligation, contract expiry or equipment End of Life announcement. This consideration will likely drive the timing of a wireless network investment.

Wireless communications likely require a frequency assignment to operate, with licensed radio frequencies providing increased certainty and security to the operating environment (compared to unlicensed). The frequency licenses are administered and managed by national agencies such as by the ACMA (Aus), FCC (US) or Ofcom (UK). On occasions, there are changes to the license rules to maximize the wider utilization of the finite (and very valuable) radio spectrum; requiring action by the license holder (such as reconfiguration or equipment replacement) and possibly the radio equipment vendors (such as product redesign).

Examples in the US include the 3.5 GHz CBRS frequency band changes (affecting utilities with IEEE 802.16 WiMax deployments), 900 MHz frequency (affecting utilities with Sensis and Harris OpenSky deployments), 450 MHz re-banding (affecting LMR deployments). Similar changes are anticipated in Australia's draft Five-year spectrum outlook 2020–24.

Cyber security is not yet a legal obligation for distribution utilities, but if mandated, the rigor of compliance monitoring of data 'access, audit and authentication' can be expected to emerge in time.

Electronic component supplier and vendor product road maps would also trigger change, such as the retirement of analog radio products.

2. Increased bandwidth of technology use cases

The total bandwidth requirement for a geographic area (i.e. density) drives frequency spectrum needs which is a significant financial (and technical) consideration.

The total wireless bandwidth required by the utility use cases for a given geographic area is the volume of equipment x size of the data (/second). The geographic area is determined by the operating environment (i.e. terrain, noise) and radio propagation characteristics of the frequency spectrum options.

Volume of equipment

The utility will require targeted telemetry and remote control of plant and equipment. The density of field automation will continue to increase (i.e. switches, valves, indicators), advanced (smart) meters will come online and the connected field workforce will roam between for maintenance and emergency fault response.

Also emerging is data connectivity of behind the meter devices (such as inverters, electric vehicles), and unmanned aerial vehicles (i.e. drones) for field surveys.

Size of the use case data

The use case requirements will inform the size of the data per second. Three key factors are that inform the data size are :

  • Payload and number of use cases, such as devices, equipment and data 'points'
  • Resolution and sampling rates, also known as scanning, refresh, polling rates or frames per second
  • Whether data encryption is enabled (or not).

Often in collecting the use cases and functional requirements from stakeholders, it is very easy for size of the data to blow out based on these factors. Collecting and critically prioritizing requirements will require an informed discussion to shift:

from "I want all telemetry data now, encrypted"
to "I need these critical read-only data points within 30 seconds of the change of event".

Based on the frequency spectrum availability, it will likely be a case of prioritizing the use cases within the constrained bandwidth.

3. Reduced unit costs

For mission-critical SCADA applications, a ruggedized modem typically costs $1000 +. Essential features include serial data ports and industrial housing ratings.

An application specific data-radio can be replaced with an application agnostic data modem (even if serial data traffic is encapsulated over IP).

With the benefit of international standards and demand, commodity equipment and components, the cost of field telecommunications user equipment can be significantly reduced (although, recent industry examples with branded modems appear to have not yet realized this financial benefit).

The physical installation can be streamlined (e.g. a field worker can install on site, and technician commission remotely), but the typical labor costs of installing a modern data modem are about the same.

4. Corporate strategy and priorities

The 'bottom up' utility telecommunications strategy often calls for limitless wireless data and a cautious migration to the latest technology, with an inferred corporate desire to maintain or reduce capital and operating budgets and employee headcount.

The corporate 'top down' assumed priorities will likely be confirmed during approvals, in which scope or schedule will be adjusted; rather than the necessary rethink of the ownership and operating models require to meet the corporate objectives for rapidly evolving data needs and technologies.

For a power distribution utility, the current corporate green/future energy strategies and priorities are increasingly creating an environment for a 'top down' telecommunications strategy. This is similar to the top-down utility telecommunications strategies to deploy optic fiber ('private wired broadband') during dotcom bubble in the late 1990s. This optic fiber since has proven valuable for the SCADA connectivity of substations and migration to digital tele-protection schemes.

As distributed generation (i.e. solar panels) replaces centralized energy sources (i.e. fossil fuel generation), the transmission and distribution networks are experiencing reduced total electricity demand (although not necessarily daily peak demand). Without a change in pricing structure and/or regulation, the financial result for a utility is reduced tariff revenue and reduced recoverable investment and expenses. Also, whether based on finance, optics or virtue signaling, large investments in fossil fuel or nuclear generation and poles-and-wires infrastructure is increasingly difficult to demonstrate whole of life financial (or carbon?) benefit.

Particularly for private investor-owned utilities, shareholders will require to back-fill deferred or cancelled projects with new, capex-intensive investments to enable the 'energy transformation' and 'grid modernization' (and avoid stranded assets, and ideally reduce opex).

For a private investor owned utility, the result is a 'top down' corporate driver to spend (quickly, and recover costs; OPGW was a favorite and radio spectrum is emerging) on telecommunications and cyber security projects, rather than a 'bottom up' pragmatic asset management driver. Although, consideration is to be given as to whether this will create another islanded telecommunications network...

5. Partnership opportunities

There is a drive for a 'digital economy', '4th industrial revolution' and 'rural broadband' and internet access for everybody.

Utilities hold a number of assets (land, towers, poles, conduit, easements and optic fiber cables) and thousands, if not millions, of potential data subscribers (the use cases and data of #2) that are valuable to the cause. Utilities also typically have a relatively smoother pathway to deploying physical infrastructure through access to routine environmental and land permitting processes and access to cheap credit.

There is the potential to generate additional revenue or (more likely) reduce or offset telecommunications costs (the grab bag referred to above) through collaboration and partnership with neighboring utilities and telecommunications providers.

In many jurisdictions there is a precedent, some power distribution utilities leveraged partnerships to deploy optic fiber ('private wired broadband') during the 1990's, and then some divested the assets to form the backbone of today's major telecommunications operators. For example, transmission utility NYPA has added the lease of excess bandwidth as a sweetener to their recent wireless business case.

Unless there is a corporate commitment to do so (see #4 above), this potential unregulated revenue is usually a minor consideration in business case development today. Although telecommunications companies and utilities currently (legally have to) work together on structure 'co-siting'; any revenue derived from hosting radio antennas is a bonus and negligible to an options analysis.

Collaboration and partnerships can be a game changer in developing a (Net Present Value positive) wireless business case, particularly a broadband or Industrial IoT wireless network. Nurturing the deal is a chicken and egg scenario; requiring both corporate strategic direction, executive support, new skillsets and possibly government support for success. The benefits of this collaboration will be extended to the community, such as emergency services, neighboring utilities and telecommunications carriers.

Summary

Utilities require wireless data for prudent asset management, efficient operations, and to position for changing customer behavior.

There are 5 factors to consider to set the direction and develop a prudent utility telecommunications strategy and business case:

  1. Changes to external obligations
  2. Increased bandwidth of technology use cases
  3. Reduced unit costs
  4. Corporate strategy and priorities
  5. Partnership opportunities

The understanding of each consideration will help set direction and streamline funding approvals, contracts, project delivery and ongoing operations.

This article has been prepared based on my experience developing utility telecommunications strategies and does not reflect the opinion of my clients.

Please comment or feel free to reach out to me personally to discuss further.

Matt Acton's picture

Thank Matt for the Post!

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Discussions

Matt Chester's picture
Matt Chester on Oct 5, 2020 11:46 am GMT

For a power distribution utility, the current corporate green/future energy strategies and priorities are increasingly creating an environment for a 'top down' telecommunications strategy. This is similar to the top-down utility telecommunications strategies to deploy optic fiber ('private wired broadband') during dotcom bubble in the late 1990s. This optic fiber since has proven valuable for the SCADA connectivity of substations and migration to digital tele-protection schemes.

This is a great parallel to draw

Matt Acton's picture
Matt Acton on Oct 20, 2020 1:31 am GMT

The Rural Broadband Initiative (RBI) in the US will provide similar incentives, a new revenue stream and (mostly) posturing to their regulator.

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