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IP MIGRATION FOR UTILITIES -

MANAGING CHANGE FOR


SMARTER OPERATIONS
The global power industry is facing rapid change. In the face of increasing
power demand, more stringent regulations governing carbon emissions and
the need to manage distributed generation from renewables, utilities every-
where are turning to intelligent electric transmission and distribution systems
enabled by IP. Yet as with any major transition, power providers need to plan
their migration carefully to avoid pitfalls and assure maximum success
especially in a largely regulated industry where strategic CAPEX timelines
typically can run 20 years into the future.
INVESTING IN IP
TECHNOLOGY: 10 KEY
STRATEGIES FOR VALUE
Spending on smart grid
systems based on IP/MPLS
is accelerating. In fact, GTM
Research forecasts that by 2016
about 6.8 billion will be spent
MANAGING THE
IP EVOLUTION WITHIN
AND OUTSIDE OF THE
ORGANIZATION
The steady modernization of
the electric transmission and
distribution system based on
IP will have social impact on
PLANNING THE
PATH TO IP SUCCESS:
RELIABILITY, SECURITY
AND EFFICIENCY
After the success in the Telco
market, IP is now revolutionizing
the utilities world with unprec-
edented operational efciency
CREOS LUXEMBOURG:
LEARNING TO GET THE
MOST FROM IP/MPLS
Creos Luxembourg S.A. has
successfully embarked on an
ambitious, multi-faceted IP/
MPLS project for its national
electricity and gas network
SOCIAL VIEW
ECONOMIC VIEW
CUSTOMER VIEW
EXPERT VIEW
GRIDTALK
POWER UTILITIES COMMUNICATIONS E-ZINE
Thanks to its capability of dynamically sup-
porting multiple mission-critical services in
a single converged network, IP/MPLS has
become the technology of choice for utilities
implementing these converged smart grid
communications networks. As a utility-grade
communications network architecture, it sup-
ports the exibility and scalability of IP, while
maintaining the reliability and predictability
of traditional, mission-critical TDM networks,
including the most critical and latency-sensitive
utility applications such as teleprotection.
The widespread adoption of IP-based
communications networks will impact on all
stakeholders from government and power
providers to the consumers they serve.
Regulation will evolve to address the new
paradigm, and utilities will have to be involved
in educating and guiding the local, regional
and national agencies that oversee the sector.
Financial planning, project management,
operational processes, employment proles
and business models will change as well,
with new efciencies and additional revenue
opportunities coming to the fore. Consumers
will need to adapt to new pricing structures
and energy consumption incentives, in some
cases generating electricity themselves. All
will take a greater, more interactive role in
the energy ecosystem.
In this issue of GridTalk, four experts provide
their valuable perspectives on the economic,
social and technical considerations for utilities
planning and embarking on that all-important
transition to smart communications systems
based on IP/MPLS. They identify the key
challenges, highlight the experiences and
success stories of those that have prospered.
SUBSCRIBE www.alcatel-lucent.com/blogs/gridtalk/
CONTACT lynn.hunt@alcatel-lucent.com
VISIT www.alcatel-lucent.com/smartgrid
GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 2
SOCIAL VIEW
However, Katz says that achieving these
benets isnt simply about buying the
latest equipment, but more signicantly
is tied to the social challenge of fully
assimilating the new technology. Changing
the business processes, training employees,
adapting your organization and operations
to the benet you can derive from
technology in economics this is called the
accumulation of intangible capital means
that once you purchase the systems it will
take you some time to get to that point,
especially in large companies. Its called the
lag effect. Weve typically seen this take
three to ve years, because youre dealing
with human beings and social systems.
Katz notes that the experience of a
corporate leader in a particular sector can
have great inuence. In any given industry
you might have one company say a
Citibank or a company such as Oklahoma
Gas & Electric that has been an early
adopter in assimilating new technology.
Behind that leader the rest of the sector
tends comes along, and thats what
ultimately makes the blip on the radar.
He adds that in order to speed up adoption
of ICT innovations, large companies need to
implement change management programs
and training. The workforce understands
how technology has improved the opera-
tional environment and sees how it ts in.
In many cases, the programs need to be
combined with incentives not necessarily
material to adopt the new modes of
operation. These could range from recogni-
tion to additional training activities.
MELDING CORPORATE CULTURES
Successful technology assimilation takes
careful planning with attention to human
capital. As power providers increasingly
migrate from proprietary networks to
new architectures and services, the need
for IP experts in the workforce will grow
tremendously while increasing in value.
Yet depending solely upon those experts
wont be enough, according to Katz, who
has served as a management consultant to
the telecommunications industry for the
past 25 years. Instead, he says, successful
management requires a fully integrated
approach to the melding of the new-
generation ICT and core business processes.
When managing in these situations, you
cannot segment. You must have senior
business unit managers who are completely
uent and conversant with the new
technology and all of its implications,
he says. I think the biggest problems that
Ive seen have been where management
doesnt understand technology and they
believe that they can rely on those internal
techies to translate it to what they need.
That creates a gap. They lose time, and they
lose response capability to competitive
pressures. In that situation they need to
HIGHLIGHTS
Achieving the benets of IP is tied
to the social challenge of fully
assimilating the new technology
which can take three to ve years.
Big data will be a critical tool for
utilities looking to better understand
consumer behavior, allowing them
to tailor better products to specic
segments of the population.
In planning and executing new
IP investments, it important for
the seller and the buyer of the
technology to be trusted partners.
MANAGING THE IP EVOLUTION
WITHIN AND OUTSIDE OF THE
ORGANIZATION
WITH RAUL KATZ, PH.D., DIRECTOR OF BUSINESS STRATEGY RESEARCH,
COLUMBIA INSTITUTE FOR TELE-INFORMATION; ADJUNCT PROFESSOR,
DIVISION OF FINANCE AND ECONOMICS, COLUMBIA UNIVERSITY BUSINESS SCHOOL
The steady modernization of the electric
transmission and distribution system
based on IP will have social impact on all
stakeholders, from government and power
providers to the consumers they serve.
The effect of information and communica-
tions technology (ICT) on large business
has been felt since the mid-1990s, says
Raul Katz, Ph.D., Director of Business
Strategy Research, Columbia Institute for
Tele-Information; Columbia University
Business School. While previously its
boost to productivity has been most
prevalent in industries such as nancial
services, telecommunications and transpor-
tation, we now will start to see other
sectors, such as electric power, beneting
much more. In its case, the focus of the
main ICT impact will shift from internal
business operations to smart grid and
customer support.
Adapting your organization and operations to the benet you
can derive from technology in economics this is called the
accumulation of intangible capital means that once you purchase
the systems it will take you some time to get to that point.
GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 3
SOCIAL VIEW
either recycle themselves, learning and
assimilating, or they have to create the
space for younger generations who grew
up in those new environments to assume
leadership positions.
BIG DATA AND
CONSUMER BEHAVIOR
Looking outside of the organization, its
clear that big data will be a critical tool
for utilities looking to better understand
consumer behavior, allowing them to tailor
better products to specic segments of the
population. The consumption of electricity,
while being a universal good, has been seen
as pretty uniform, whether you live in the
middle of a city or the countryside, Katz
says. But everyone has their own power
consumption patterns that may be particular
to their lifestyle or business, with their own
essential needs. And with telecommuting,
the dramatic differences between ofces
and residences are eroding because so many
more people are working at home.
This leads to new consumer requirements
and services that can be tailored to
those. In such cases your computer is
essential it cant go down. So in the
event of an overall power failure, you
need to consider what utility can prevent
this from happening for example, a
backup power system that is maintained
to provide assured continuity. Katz says
that implementing these are the kinds of
outside-the-box ideas will now be possible
with advanced ICT.
MOTIVATING
COMSUMER ADOPTION
A key part of the success equation for
power utilities migrating to new technolo-
gies means motivating consumers to
embrace innovations such as smart meter-
ing, dynamic demand pricing and overall
energy conservation. With rates becoming
more segmented and complicated, the
consumer education challenge itself will
become more complex. This means using all
the tools available, including big data and
social media anything that will help build
and activate an engaged, educated commu-
nity of customers.
Education is critical, Katz says. If you
were to tell your customers that they have
to consume less electricity because that
has an impact on climate change, youre
going to get less of a following than if you
perhaps say You know something? Youre
consuming 50 percent more power than
your neighbors. In a case such as this, the
actual names would not be revealed, but
data could be provided in a form such as
In your neighborhood, heres the mean,
the high and the low and here is where
you t in. When you introduce that level
of comparison of your behavior relative to
those surrounding you, the social pressure
is a key element.
Thinking out of the box and out of the
industry also can be effective, especially
when you start with the consumers needs
in mind. One of my students at Columbia
developed this system where he used
reward coupons from a major coffee
chain to give to his startup customers
if they could demonstrate that through
recycling they were actually contributing
to the environment in a certain way,
Katz explains. He expanded the idea,
getting a lot of cooperation from socially
responsible companies that realized it
was also good for business, and he was
successfully soliciting change from his
consumers because they were getting a
little something extra for doing something
good for the environment.
CHALLENGE, RISK AND
PARTNERSHIP
Given the rate at which technology is
changing, moving to new systems creates
challenges and risks for any company. The
challenge is addressing the question How
am I going to choose the right solution
something that will boost productivity
the way we deliver our output and what
are those technologies?, Katz explains.
Secondly, how fast can we assimilate
them, considering the necessary retraining
required?
When considering these critical issues,
Katz believes it is important for the seller
and the buyer of the technology to be
trusted partners. One party holding the
other at arms length could be dangerous,
he says. I need to have the best possible
visibility as to whats going on from a
development standpoint. I have to consider
the provider of my technology as my
partner one who understands what my
business is, what my needs are, and at the
same time has a window on the future of
research and development the things to
come. I need someone who can creatively
sit down at the planning table with me and
help me make the right decisions.
THE MOST IMPORTANT ADVICE
What is the most important piece of advice
Katz would give to power providers in terms
of socially managing technology transitions?
Get close to where the innovation cycle is;
try to avoid being insular in terms of coming
up with solutions only within the mindset of
the industry, he advises.
Katz notes that there is a great debate
about whether large companies actually
can innovate. Can big companies incubate?
I think they can, but they have to change
in the way they are being managed and
how porous they can become to trends
in their environment. We need to nd a
way in which large companies can become
better innovators through training and
encouraging greater creativity on the part
of the employees. They need to innovate
beyond just keeping the lights on day in
and day out.
If you were to tell your customers that they have to consume
less electricity because that has an impact on climate change,
youre going to get less of a following than if you perhaps say
You know something? Youre consuming 50 percent more
power than your neighbors.
GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 4
ECONOMIC VIEW
For most utilities, this spending
initially has been driven by regulatory
or government stimulus, such as the
US $7.8-billion Smart Grid Investment
Grant Program funded through the 2009
American Recovery and Redevelopment
Act says Mark Burke, Vice President,
Intelligent Networks and Communications
for DNV GL (formally KEMA Inc.) The
funding initially has focused largely on
AMI, but the entire value proposition to
an electric utility includes distribution
automation, transmission, teleprotection
and other functionalities that can drive
economic benet.
The factors to be weighed when planning
IP investments can be varied and extensive,
depending on a utilitys business focus,
budget and regulatory environment. Here
Burke weighs in on ten strategies that
operators can keep in mind.
1. EMBRACE STANDARDS Standards
drive innovation while maintaining
security and reliability, Burke notes.
They encourage mass production,
driving the cost of equipment down,
while also enabling the development of
an ecosystem of value-added products
and solutions. They reduce the total
cost of ownership for the systems
they procure, but also encourage the
development of devices that may
leverage communications protocols to
provide additional value to customers
and the society at large.
2. PREPARE FOR DISTRIBUTED
GENERATION Deploying a converged
IP/MPLS communications throughout
a service territory not only provides
for increased visibility, automation and
resiliency for all operations, but also
positions the utility to better manage
distributed generation from renewable
energy sources such as wind power,
photovoltaics and other intermittent
energy sources. With IP/MPLS you
can accommodate these in a common
architecture and in a standards-based
environment so that the unit costs are
low over time, says Burke. As the
smart grid environment matures and
gets more diverse with renewables and
other new challenges, the total cost of
implementation will go down as well.
3. MITIGATE LEGACY COSTS Single-
vendor proprietary systems utilities that
traditionally have been used for support
services such as SCADA, reclosers and
other services have become very costly
to maintain, particularly when their
vendors have gone out of business.
We had a one customer who purchased
the intellectual property associated
with one of their recloser networks,
Burke notes. They then had to hire
a lab to create the radio systems and
the proprietary back ofce system.
This gets very expensive when youre
operating out over a very long time
frame, as utilities tend to do. With IP/
MPLS utilities can maintain their TDM
HIGHLIGHTS
Investment in smart grid systems
based on IP/MPLS is accelerating.
Ensuring a maximum return on
investment in IP requires managing
these upgrades in a way that will
bring the most value to utilities
and their customers.
Factors to consider in planning
an IP migration strategy include
regulation, standards, distributed/
renewable generation, legacy
equipment costs, changing
employment patterns and
opportunities for monetizing
advanced assets.
Operators planning IP grid
investments should select
solutions that have a large
vendor base and model those
prior to implementation.
INVESTING IN IP TECHNOLOGY:
10 KEY STRATEGIES FOR VALUE
WITH MARK BURKE, VICE PRESIDENT, INTELLIGENT NETWORKS AND COMMUNICATIONS,
DNV GL (FORMALLY KEMA INC.)
Spending on smart grid systems based
on IP/MPLS is accelerating. In fact, GTM
Research forecasts that by 2016 about
6.8 billion will be spent each year on
IP-based smart grid investment in Europe,
with the largest share going to advanced
metering infrastructure (AMI), distribution
automation and utility enterprise systems.
In the U.S., investment could hit US$35
billion in 2021, with US$200 trillion
projected in global expenditures by 2030,
according to Memoori Business Intelligence.
Ensuring a maximum return on investment
requires managing these upgrades in a way
that will bring the most value to utilities
and their customers.
The entire value proposition to an electric utility includes
distribution automation, transmission, teleprotection and
other functionalities that can drive economic benet.
GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 5
ECOMONIC VIEW
services while at the same time taking
advantage of the convergence and a
standards-based solution that allows
the migration to more IP services
without interruption.
4. ANTICIPATE CHANGES IN EMPLOYMENT
PROFILES Burke notes that with the
move toward IP, job descriptions will
change, as will the number of jobs.
The greater level of automation and
integration of distributed energy
resources will have a stimulus effect
on energy-related jobs, particularly in
areas such as energy management, big
data analysis, communications and
other high-tech skill sets, he says.
There also will be new opportunities
in engineering, energy efciency,
demand response, customer and
behavior dynamics and the correlation
of energy data with other industry
and customer groups.
5. MONETIZE EXCESS CAPACITY
Laying high-bandwidth ber throughout
a service area can be a substantial
investment, but also can open the
doors to monetizing excess capacity
with video and other communications
services to more quickly recoup
investment costs, even creating new
prot centers. You have to look at
the regulatory structure and become
expert at that, then consider how the
systems legally can be exploited by
being entrepreneurial or establishing an
unregulated subsidiary, Burke suggests.
Consider the long-term economic
benet, the committed infrastructure
and the cost of ownership. You can
try to develop it in house, you can
outsource all or some of it or you can
partner with others who are good at it.
All of those examples have happened
in different markets.
6. ENSURE BUSINESS CONTINUITY
Ensure business continuity during the
evolution by selecting solutions that
have a large vendor base and model
those prior to implementation, planning
the migration with different techniques,
such as overlays and segmentation, so
that any failure can either have minimal
or no impact on operations. Utilize the
experience from other utilities and third
parties if that expertise isnt already
resident, Burke advises.
7. WORK TO SHAPE EVOLVING
REGULATION Burke notes that
regulatory thought is moving beyond
AMI into areas such as integrating
renewables, distributed energy
resources and energy efciency
programs. Power providers should
really get involved with educating
both consumers and regulators, which
may have very small staffs and are
overburdened, Burke notes. Only
through that level of engagement will
help maximize the value of moving to
a more sophisticated energy system
including IP/MPLS- based smart grid.
The regulators are quite sensitive to
the needs of the customers.
8. CONSIDER PUBLIC-PRIVATE
PARTNERSHIPS Burke notes that in
the areas where there is a traditional
lack of investment in energy
infrastructure there can be a large role
for private investment in building new
delivery systems. There is an interest
in utility and private investment in
campus infra, storage networks and
community energy consortia sort of
a macro grid development that may or
may not involve the utilities. In some
markets demand response cant be
exploited by governmental entities and
utilities need a third party to capture
the value. So there are a lot of different
potential combinations of public-private
and utility participation.
9. GET ENTREPRENEURIAL From retail
to wholesale, the advent of IP in the
electric power industry is allowing a
number of new business models to take
hold. However, their value depends
on how a utility is regulated. The
Utelco model is making much more
sense these days, although there are
strict regulatory prohibitions in some
markets, Burke notes. In the United
States a public utility would have to
decouple that part of the business from
their rate base. Also, some resources
might be inside a fenced substation,
which makes it subject to NERC critical
infrastructure restraints. Outside of the
U.S. and the regulated investor-owned
utilities the business case can
be easier.
10. PLAN CONSERVATIVELY Burke advises
that operators take the total cost of
ownership over 20 years or more, and
migrate toward a standards-based
solution with a large, viable vendor
community. Plan, scrub, forecast
requirements that may be a bit higher
giving running room to those, he
says. Once an infrastructure is in place,
engineers and users may use it in ways
that may have not been forecasted,
so be a bit more ambitious in forecast
requirements and transition it in ways
that can allow an error without a large
impact on the current system.
THE TAKEAWAY
The key takeaway is that the new IP/
MPLS technologies offer a great deal of
benets within the utility in cost savings,
operational efciency and cost savings, and
they also mandate a new way to operate,
bridging those traditional organizational
silos, Burke says. Its good to know that
this already is being done by utilities in
different parts of the world with great
success.
With IP/MPLS utilities can maintain their TDM services while
at the same time taking advantage of the convergence and
a standards-based solution that allows the migration to more
IP services without interruption.
GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 6
CUSTOMER VIEW
Creos Luxembourg S.A. has successfully
embarked on an ambitious, multi-
faceted IP/MPLS project for its national
electricity and gas network to replace
its existing TDM-based communications
system. Thanks to this single IP/MPLS
network, Creos is converging services,
including teleprotection, into one
reliable infrastructure which allows it to
remotely monitor the grid, improve fault
isolation and system safety and enjoy
operational performance enhancements
and cost savings over multiple network
management.
Under the European Unions 20-20-20
energy savings objectives, by the end
of 2018 the company will have installed
smart meters with 95 percent of its
300.000 customers, who currently are
served through approximately 9,000 km
of power lines, 1,900 km gas pipes, four
regional distribution centers and a staff of
700. Meter data will be collected every
15 minutes, brought to a central platform
in Luxembourg, then back to the customer
and also injected as data for SCADA
and billing, says Patrick Colling, Creos
Communications Expert.
And smart meters are only the beginning
for Creos. With a national goal of producing
11% of renewable energy by 2020, it also
is implementing a major IP/MPLS smart
grid investment utilizing advanced commu-
nications throughout its network to better
coordinate the transport of electricity from
decentralized generation sources such as
wind and solar installations, while further
enhancing reliable, resilient and secure
electricity distribution.
PREPARING FOR THE FUTURE
In early 2011 Creos recognized the need
for a fresh round of investment in its
communication network infrastructure.
We took a look at what was new in the
market, and after having analyzed it in the
laboratory, we saw that IP/MPLS would
provide the best support for us, adapted to
the utility sector requirements, says Colling.
IP-based services and CCTV are exploding,
so we had to start thinking about whether
our network is prepared for the next 10 or
20 years. Our high-voltage level is ready
for this, thanks to the IP/MPLS technology
we chose from Alcatel-Lucent providing a
10 Gb/s backbone interconnected to several
1Gb/s full mesh rings.
Now Creos is turning its attention to the
medium-voltage level, working closely
with a third-party ber optic operator in
Luxembourg. We have numerous medium-
voltage underground cable ducts, Colling
explains. Our partner is renting these ducts
and putting in their own ber optic cable,
then leasing ber back to us at no cost. So,
its an even exchange; they use our ducts
and we use their ber. The plan is that
inside of ve years we will have all 3,000
medium-voltage stations interconnected
with ber optics. These stations will be
able to fully interact with the high-voltage
stations, and all will be IP/MPLS-based.
Given the tight smart meter implementa-
tion timeline, Creos is relying on an interim
TETRA-based solution using the IP/MPLS
network in the high-voltage stations as
the backbone to support communications
between the medium-voltage stations and
the data center where the TETRA servers
HIGHLIGHTS
Creos Luxembourg S.A. has
successfully embarked on an
ambitious, multi-faceted IP/MPLS
project that includes intelligence
throughout its electricity distribution
network from power generation
to smart meters.
After one year of testing,
teleprotection over IP/MPLS
demonstrates the same level of
performance as over a classical
interconnection.
Knowledge sharing with peers and
providers is key for utilities stepping
into the world of IP to save time
and money.
CREOS LUXEMBOURG: LEARNING
TO GET THE MOST FROM IP/MPLS
WITH PATRICK COLLING, CREOS COMMUNICATIONS EXPERT
We had to start thinking
about whether our network
is prepared for the next
10 or 20 years.
GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 7
CUSTOMER VIEW
are located. The benets in using high-
voltage stations as TETRA base stations are
that we have no new ground to acquire,
and there are no extensive installation
costs since we already have our own cabi-
nets and support there, so we only have to
invest in the equipment for 50 TETRA base
stations. On the SDH technology we had
before we never could have offered this
backbone for the TETRA network,
Colling says.
MEETING THE HIGHEST
STANDARDS REQUIRED FOR
TELEPROTECTION
Colling explains that Creos must adhere
to rigorous standards of reliability and
resiliency in its network design, and
points to teleprotection as an example
of how a traditional, critical service can
be successfully supported with IP/MPLS.
With latencies of 5ms-6ms between
connecting nodes, you have to have a
very high level of control to guarantee
service and performance, he notes. A year
or so ago we invited Alcatel-Lucent and
another vendor to come and analyze the
situation and test four current differential
protections talking together over four high
voltage stations inside the ring. We set up a
logical ring between protection equipment,
based on the IP/MPLS network that we
have, and measured latencies, including
packetization and depacketization of less
than 6ms. It was a really great result. Since
the beginning of 2013 teleprotection has
worked throughout our network without
any incidents, and we can say that for us
there is no difference in teleprotection
between the classical interconnection
and IP/MPLS.
Cybersecurity is another concern that
Colling says is being handled well by
Creos new investments. IP is the best-
known protocol around the world, so
there is absolutely the need to dedicate
a lot of time to analyzing how best to
bring cybersecurity into the transmission
system, he says. That took us a complete
year. We analyzed it and have now
nalized our design assisted by Alcatel-
Lucent. It includes things like encryption,
rewalls and new security features for
routers. You need to analyze your services
and how to secure them from beginning to
end, and we are convinced that through our
investments we have done just that.
CONFIDENCE IN
THE IP EVOLUTION
Colling says that Creos has had no qualms
about making its transition to IP/MPLS.
We were convinced after analyzing
the technology that it would operate as
needed. When you buy a car you have
faith that it is going to work properly
and safely, and its the same with this
technology. Today we can say we need
IEC 101 or IEC 104 or we need 10Gb/s or
100 Gb/s and we get it. Colling adds that,
thanks to standards, the performance of
new technology can be much more easily
proved in the labs.
IP/MPLS just makes
things easier.
Operational ease is also a big plus.
With PDH and SDH one had to execute
numerous time consuming and complicated
actions before transporting that type
of data over non-analog support. Now
if someone bought a camera and asks
to make it operational immediately,
connecting two specic points, you can
say yes. Even two or three years ago
you had to ask for documentation, get
information on the interface, look at the
capacity of the modem and so forth. Today
that is mostly unnecessary. IP/MPLS just
makes things easier.
The employee learning curve hasnt been
a problem for Creos Communication
specialists, according to Colling. We had a
six-day training session in Antwerp on our
equipment, specialized for our people, he
says. Then, three of our guys implemented
25 routers by the end of this year. We
interconnected and congured them, created
the MPLS process, routes, and pipes. We
were able to handle everything, including
creating services and the APIs.
ADVICE FROM SOMEONE
WHO HAS BEEN THERE
Colling suggest that when embarking
on an investment of this magnitude it is
important to visit peers to enrich your
understanding. This year we had other
utilities coming to Luxembourg to visit. We
had an exchange and everyone went home
with a better understanding. So before you
choose a provider, go visiting and compare
platforms. That is the most important rst
step. With an exchange of experiences you
can save a lot of time and money.
The Creos migration is ongoing. We will
be nished in two or three years, but its
not really any pressure as long as we can
run two networks, so we do it step-by-
step, keeping each service running in a trial
period for one or two months. says Colling.
So take the time to understand your
services and how they would work on your
own IP/MPLS network. Play with your new
technology, and use that for learning. At
rst you may start out slowly, but later on
you will progress faster. You are not alone
if you have the support of your vendor.
Colling adds, Our SDH/PDH equipment
has been running for 12 years without
any fault, and now for two years weve
had IP/MPLS. We expect it to be as stable
as the SDH/PDH over the next ten years
and beyond.
Take the time to understand your services and how they
would work on your own IP/MPLS network. Play with
your new technology, and use that for learning.
For us there is no difference
in teleprotection between
the classical interconnection
and IP/MPLS.
GRIDTALK | IP EVOLUTION ISSUE | JANUARY 2014 | PAGE 8
EXPERT VIEW
deploying these technologies. Fortunately
we have proven that a single, converged
infrastructure with IP/MPLS is the best
way to support all of it in a mission-critical
infrastructure.
Vrancken identies four main challenges
associated with the move to IP/MPLS
among power utilities. The rst
consideration is how to ensure a reliable
and high-performance network. Then, how
do you attain the kind of exibility that can
combine legacy and IP applications? You
also have to look at how well you will be
able to scale your network, and nally,
how you will manage all of your converged
services in a single way. Once utilities
understand these factors, they will be
prepared to move forward on a smooth
migration path that will provide the
optimal return on investment.
RELIABILITY AND PERFORMANCE
Vrancken points out that the time is now
for utilities to plan for implementing
a new-generation, intelligent IP/MPLS
communications infrastructure if they
havent already begun doing so. The latest
grid management applications are moving
to IP, but that doesnt mean utilities can use
the Internet for communicating command
and control messages with the grid. Since
the power grid is considered to be critical
infrastructure, communication technologies
must be able to deliver a high level of
reliability and performance.
A 99.999 percent reliable IP/MPLS
infrastructure and intelligent sensors
throughout the distribution layer and
at consumer end points yields more
reliability, fewer outages, faster response
times to issues, reduced cost and
increased efciency all while allowing
more seamless integration of distributed
renewable energy sources, reducing carbon
emissions. A single IP/MPLS network
allows all of that, and in such a way that
you can optimize the bandwidth for
multiple applications without impacting the
performance of any of them. It also means
that this same single IP/MPLS network can
also cope with all Enterprise trafc and
applications , Vrancken says.
Of course, with IP protocol reaching to
all corners of the network, cybersecurity
becomes an important issue that utilities
must address. Were pushing very hard
to have IP/MPLS deeper in the network,
so security is integrated throughout our
solutions all included from the beginning
in the design.
FLEXIBILITY AND
RISK MITIGATION
When going through a migration, the main
benet of IP/MPLS is the exibility with
which it enables and adopts new appli-
cations smoothly while still supporting
legacy services, mitigating risks and allow-
ing a utility to efciently take advantage
of extensions and new technology. This
means that even while utilities introduce
new technologies, they are not forced to
migrate their older, existing grid manage-
ment applications. We fully integrated
those in our solutions portfolio you can
have the legacy interface and function, but
it can be running on the IP/MPLS network,
says Vrancken.
Often the biggest challenge in supporting
legacy interfaces is that a converged
network has to cope with all of them
under very stringent requirements.
HIGHLIGHTS
IP/MPLS is providing unprecedented
capabilities for managing electric
grids, though utilities must plan their
migration carefully to avoid pitfalls
and assure maximum success.
A single IP/MPLS network can
optimize the bandwidth for multiple
applications without impacting the
performance of any of them.
A private IP/MPLS utility network
will offer exibility, support for both
legacy and IP applications, scalability
and easy management.
Each utility has a unique set of
requirements that need to be
considered when planning its
evolution to IP, so careful evaluation
and testing is important.
PLANNING THE PATH TO IP SUCCESS:
RELIABILITY, SECURITY AND
EFFICIENCY
WITH BART VRANCKEN, UTILITIES SOLUTIONS ARCHITECT, ALCATEL-LUCENT
After the success in the Telco market, IP
is now revolutionizing the utilities world
with unprecedented operational efciency,
exibility and control. In fact, you could
say that migrating to IP has become a
mandatory for success going forward.
Yet as with any major transition, power
providers need to plan their migration
carefully to avoid pitfalls and assure
maximum success.
Utilities telecom used to be very simple,
handled in the background with a very
small team, says Bart Vrancken, Utilities
Solutions Architect, Alcatel-Lucent. The
explosive growth in intelligent grid devices
with communication capabilities was not
foreseen at all several years back. But now
we see numerous examples of customers
EXPERT VIEW
www.alcatel-lucent.com Alcatel, Lucent, Alcatel-Lucent and the Alcatel-Lucent logo are trademarks of
Alcatel-Lucent. All other trademarks are the property of their respective owners. The information presented
is subject to change without notice. Alcatel-Lucent assumes no responsibility for inaccuracies contained herein.
Copyright 2014 Alcatel-Lucent. All rights reserved. SI2014013973 (January)
Teleprotection is a good example for this,
since, for example, only 6ms of latency is
allowed, Vrancken notes. We have proven
that IP/MPLS can support teleprotection
through our testing with third-party labs
and in real-world operations by customers
such as AltaLink in Canada and Creos in
Luxembourg.
Each utility has a unique set of requirements
that need to be considered when planning
its evolution to IP, so careful evaluation and
testing is important. To effectively manage
the risks, utilities normally set up a kind
of pilot to test the new technology and
applications, maybe with some third-party
products, says Vrancken. At Alcatel-Lucent
we have introduced our Utility Solutions
Lab, where we test the integration of
Alcatel-Lucent equipment with partner
technology, simulating the high-voltage
environment, the wide-area network, the
distribution network, and under multiple-
use scenarios. With this lab we try to
mitigate the risk associated with moving
toward the new technology. Our customers
are welcome to visit that lab, where we can
build a model of their infrastructure and
simulate their environment.
SCALABILITY: PREPARING FOR
THE EXPLOSION IN IP DEVICES
Over the next decade the number of
devices on utilities networks will explode
exponentially, explains Vrancken, meaning
that smooth scalability is essential. One
study projected that by 2015 we will have
as many as 50 billion devices connected
to each other all over the world. Twelve
percent of these will be in utility space.
While traditionally SCADA data has always
been sent back to the central control center,
now substation automation is bringing
intelligence lower into the network,
allowing a station itself to take action
based on information it is getting from
other stations and from central control.
Once youre talking about the low-voltage
side of your network it means a factor of
100 more nodes than on your high-voltage
transmission network. And, by the time
you move to a different focus level deeper
in the network, you have another device
expansion factor of 100. So, if you have
100 high-voltage substations in a small
country such as Belgium, for example, the
low-voltage distribution sites will grow
by a factor of 1,000. The exibility and
automation of the IP/MPLS network allows
and supports that kind of scaling, so you
need to make sure that management is
staying on top of that.
MANAGING CONVERGED
SERVICES EFFICIENTLY
This kind of device growth and the move
toward realizing the efciencies of a single
converged network necessarily creates
more complexity. Yes, its complex, but
with one single operating system, which
can encompass all of the services in an
efcient way, and which also supports
the DWDM, microwave and enterprise
products, you are already half way
says Vrancken. On top of this NMS, we
developed a dedicated utilities web portal
called Service Portal Express, which allows
you to add e.g. a substation automation
device, or a CCTV camera somewhere
in your network, you choose the basic
parameters, the connection points, and it
takes all the necessary actions.
Vrancken adds that although utilities should
invest IP/MPLS experts to manage the
network, its eld force doesnt necessarily
need to have that same skill level, thanks
to some of the available management
tools. When you have the single network
and use Service Portal Express, your
maintenance becomes a lot easier. So you
have your expert IP/MPLS team with the
eld force working over the portal without
the necessity of them knowing all of the
details they can focus on the services
and applications themselves, providing an
immediate return on investment.
ENSURING RETURN
ON INVESTMENT
Vrancken notes that Alcatel-Lucent
has a department focused on solutions
economics, helping its customers prove the
business case for their IP evolution. They
can analyze investments, building plans
and customer satisfaction. That way their
return on investment will continue years
from now, he says.
I would recommend that utilities embarking
on this path talk to their peer utility
providers who are already in the process
of migration, says Vrancken. Although
each environment is unique, there is a lot
to be learned from their experiences, their
challenges, how they do training, how to set
up operational teams and so forth.
Also, he says, talk to Alcatel-Lucent. We
can share our experience in utility space,
having worked with many other operators
in countries around the world to help them
nd the best migration plan per their needs.
Although utilities all have very specic
conditions related to their infrastructure,
their customers and the countries in which
they operate, there still is a lot of common
ground on the technology side to go along
with our local knowledge, and that is where
we can be of help.
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www.alcatel-lucent.com/smartgrid
One study projected that by 2015 we will have as many as 50
billion devices. Twelve percent of these will be in utility space.
We have proven that IP/MPLS
can support Teleprotection.