AutomatedBuildings.com Article - Is the Smart Grid Interoperable?

The smart grid continues to grow at a rapid rate with billions of investments. Projects from advance metering infrastructure, automated demand response, substation automation and home energy management are being deployed around the world with countless start-up vendors entering the market with cross-functional product offerings to capture a piece of the market. As the market continues to mature from the early stage life cycle, the concept of interoperability needs to be questioned. How interoperable are the smart grid products? How open are the protocols? What happens if a vendor declares bankruptcy? This article examines the concept of interoperability in the smart grid, drawing examples from the building automation industry.

Interoperability defines the ability for a system to work together, where its interfaces are completely understood and operates with other products or systems from multi-vendors without any restricted access or implementation. The key to interoperability is the ability for multi-vendor participation in the same system and if required the ability to switch vendors without a large switching cost. The catalyst for interoperability is open standards. The Building Automation System (BAS) industry is a classic industry where it has evolved from proprietary systems with large overhead costs for ongoing maintenance to interoperable systems with multi-vendor cooperation via open standards. Open communication protocols such as BACnet and LonWorks have opened up a plethora of options to the end user in the BAS industry. No more days of a vendor lockout where the end user has no choice but be mandated by the vendor. Open standards have given the end user the choice to dictate their requirements without large switching costs. Also, it has allowed start up vendors to enter into the market with product offerings which can integrate into systems via the open standards. Interoperability has been a win-win concept for both the end user and the vendor, triggering a significant growth in the BAS industry over the last 10 years.

Figure 1: Interoperable products integrate seamlessly

How interoperable are current smart grid devices? Let’s go back 15 years in the BAS industry. The product offerings were mostly proprietary with options for multi-vendor integration; however complex and costly. At the same time open protocols were being developed by industry organizations with few vendors participating with product offerings.

The current state of smart grid devices is at a similar paradigm. The smart grid evolutions have driven many start-up organizations to develop product ranges in the last 5-8 years with pioneer products being implemented in the market place moving from early stage to mature life cycle. In order to capture the market, the products are being developed at a fast pace with agile project management methodologies by releasing products to the market at a rapid pace to suit the end users. The core standards behind most products are proprietary with end users locked into the system. Open standards in the grid such as OpenADR are evolving, however right now the products are not interoperable. The lack of interoperability is a fundamental risk for the end users and large investments.

What are the risks? Let’s examine an Advance Metering Infrastructure (AMI) deployment as an example to evaluate the risk of products failing to be interoperable with each other. The requirement is to build an AMI for a million households to perform typical AMI functions as read consumption data, load control, price offerings and allow end user more feedback about their energy usage. The utility implementing the solutions does analysis and chooses an AMI vendor to deliver the solution with a billion dollar investment. The vendor is to deliver a million nodes with its core infrastructure required to deliver data from the household back to the utility. Is the solution interoperable? No, at present in the AMI space the concept of one node from one vendor integrating with another vendor is not possible due to lack of an industry communication standard. Current offerings in the AMI include mesh base and carrier base communication. That is if the utility for any reason, or if the utility has to switch vendor, the deployment must start again. Mesh technology utilizes radio network to route through the mesh to transfer data from the end point to the required destination via hopping through an optimal path. Carrier base technology uses 3G and WiMAX by deploying either new infrastructure or using the existing telecommunication network. However these product offerings have many proprietary components, where integration comes at a large cost. Therefore once the utility selects the vendor, it is bound to it forever, unless the decision is made to switch vendor at a loss of millions of dollars. Currently the vendor dedicates the market with little choice to the utility. Also most product offerings in the smart grid space currently are through start up organizations with, the utility running the large risk of the vendor disappearing from the market. What happens if the technology the vendor is offering today is phased out in ten years? In such a case switching to another vendor with a half deployed solution has catastrophic impacts to the business. Unlike the BAS industry where 10 years ago if an end user in the worst case decommissioned a proprietary system and replaced it with another vendor, the financial implication was manageable due to scale, but replacing an AMI is not an option.

It is clear that interoperability of smart grid devices is a must. It is a must for utilities in their decision making process when choosing smart grid vendors and it must drive the industry to open standards.

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