A bright idea

A smart grid is an electricity network for the 21st century and beyond. It comprises thousands of sensors that send information about consumption, quality and flow. Thanks to the quantity of information, sophisticated data-modeling techniques can provide early warnings of potential issues and pinpoint accuracy on consumption patterns. Going further, devices fitted in homes and offices allow customers to monitor and modify their usage habits and make smarter decisions about how they consume their electricity. This sophisticated flow of data only can be enabled by a high-speed, reliable and secure communications infrastructure.

EPB, the municipal electric utility serving Chattanooga, Tenn., is using a 100% fiber-optic network as the backbone for its smart grid. The smart grid is providing increased power reliability, greater operational efficiency and more power-management tools for the utility’s customers, as well as reducing customer outage minutes by 40%. In addition, the choice of fiber for the communications backbone opened up a wealth of financial, organizational and community benefits, some of which were not foreseen at the start of the project. Alcatel-Lucent is one of EPB’s key partners on this project, providing a triple-play solution (television, Internet and telephony), as well as components of the fiber network and smart grid.

Like most electric systems around the world, EPB’s was designed decades ago. Back then, it was impossible to foresee the massive changes that the energy markets would witness: the oil crisis; the concern about fossil fuels and global warming; the subsequent rise of renewable energy; and, of course, the world’s unquenchable thirst for electricity. Electric companies are recognizing the need to adapt their networks to these changes and find ways to improve services to customers, which is leading some to consider comprehensive modernization programs.

EPB started early. Indeed, the utility’s interest in deploying a fiber-optic smart grid began last century. Over the course of 15 years, EPB kept an eye on the market, looking at factors such as product maturity and costs, learning from other fiber-network deployments, and talking to technology vendors. Only when EPB felt that the conditions were right for its customers did it launch its smart-grid project.

Smart grids exist first and foremost to improve the provisioning of electricity to customers. To do this, a smart grid relies on data captured throughout the electricity network. The more endpoints that can be measured simultaneously, and the faster that the data can be transferred for analysis, the faster a utility can respond to network issues. A fiber-optic network provides the highest possible speed for this purpose. Fiber also is extremely resilient. For example, a recent tornado ripped fiber-optic cable from the ground and left it at the mercy of road vehicles, but much of the fiber continued to transmit data. EPB has estimated that its smart grid will save its customers roughly $300 million over 10 years in the form of reduced outages and energy efficiencies.

So, for operational reasons alone, fiber is a sound investment. However, EPB fully was aware of the potential of a fiber-optic network as a revenue generator. Specifically, it wasn’t much of a leap to begin offering additional services to business and consumers across the smart-grid network. For instance, residential services such as the triple play, and virtual LAN and bandwidth leasing to businesses, provide additional revenue to EPB.

A community-wide fiber-optic network also attracts investment; businesses are choosing to set up shop in Chattanooga in part because of the benefits of high-bandwidth Internet access throughout the community. The economic benefit of EPB’s fiber-optic network installation across its service area is projected to reach $600 million over the next 10 years.

The fiber-optic network was completed in April 2011. Today more than half of the smart grid’s 1,500 intelligent sensors and 170,000 domestic smart meters have been installed. This is slightly ahead of schedule, and the installation is expected to be completed by next summer.

While deployment has been relatively smooth, there inevitably are some lessons to be learned from a transformation of this scale.

For EPB, deploying a smart grid also became a positive catalyst for change, helping to establish new working practices and a more dynamic company culture. First, realizing the full potential of a fiber-optic network required EPB to prepare for a new marketplace, i.e., the hyper-competitive world of telecommunications. That change required a rethinking of organization structure and mindset in order to be successful. In addition, the smart-grid ethos of speed and agility had a beneficial effect across the organization. Finally, the fact that a smart grid touches so many functions within an organization meant that there was a shared sense of contribution to the success of the project, helping remove silos and strengthen collaboration across the company.

Colman Kean is EPB‘s director of fiber technology.