Halving the duration of blackouts after disasters saves more than just vast sums of money.

Quite a bit of the yes-it-can-no-it-can't surrounding the NBN relates to whether fibre networks are needed to support electricity utility infrastructure.

The two sides mostly argue about bandwidth: smart grids need the capacity provided by fibre / smart grids don't need that capacity (if the latter were true, I'd ask "why has every important electricity utility in Australia built its own private fibre network?" - but that doesn't actually address the question).

A Question:

Could non-fibre technologies (wireless, copper) support smart grids?

The Answer:

Yes, subject to a very long footnote...

The Very Long Footnote starts with a simple observation. If you think of "smart meters" as "smart grids", you're missing most of the picture. A smart meter is good for demand-side management - telling people the current price of electricity, and how much they're using. If it's a smart meter at the cutting edge, it gives utilities access to control what's happening in the consumer's home (subject, of course, to permission!).

A smart grid is a different creature: it puts intelligence throughout the network (most of which belongs to the utility), and is designed for the twofold purpose of reducing overall consumption (and therefore the costs of wholesale electricity and, hopefully, the carbon footprint of the grid as a whole) and making the network more reliable.

Smart meters are the sizzle: the smart grid is the steak.

Apart from the smart meters, the components of a smart grid are distribution automation, SCADA, and meter data management. Each of these on its own has only a modest bandwidth requirement - but some of these will cover thousands upon thousands of individual locations (not just households) and will aggregate into something that probably does need fibre.

Here are some brief definitions of the other, non-smart-meter aspects of the smart grid.

Distribution Automation - covers the ability to switch loads around the network in response to demand, and to route around faults.

SCADA - Supervisory control and data acquisition, performing activities such as controlling substations.

Meter Data Management - gathering data back from smart meters, either in batches or realtime, for analysis by the utility.

Bandwidth

None of these are particularly bandwidth-intensive. You don't need a 100Mb/s network connection to send the current price of electricity to a household, nor to receive the current usage data from the household. For a smart meter, a few tens or perhaps a hundred kilobits per second will suffice.

The most intensive single application of the four (smart meters, distribution automation, SCADA and meter data management) is, for each device, only in the order of a few hundred kilobits per second.

However, with lots of devices, the aggregate quickly becomes large - and some parts of the smart grid might need as much bandwidth as it can get, but only for a very short time.

Some, particularly distribution automation and SCADA, are latency-intensive. If you want to switch around a damaged cable to minimize the number of affected users, you want to do it quickly.

Bandwidth will affect how long it takes the system to respond. A medium-bandwidth connection that can get information in or out of the SCADA system in ten seconds is adequate for most of the network, most of the time. But if there's a "system event" of some kind, you want to know immediately, and you want the systems to respond immediately.

A well-designed smart grid can respond so quickly that a place on the periphery of a blackout - a home that could be fed from two different transformers, for example - could be switched from one to the other with only a momentary flicker of the lights.

At 1Mb/s, 100 Kb/s of distribution automation data takes a tenth of a second to send from the network to the office, probably a handful of milliseconds to process, but another tenth of a second to send back - if the network is uncongested. If the same even affects thirty transformers, the response time might be seconds?

Anyone who says "So what? We can stand a five second power outage" has never torn out their hair when a desktop computer or a business server goes dark (and the electricity network itself is much more likely to make a graceful recovery from a "flicker" than a "blackout").

In other words: what's adequate for normal operation is inadequate in an emergency - which is why so many of our grid operators have run fibre to their city substations. They used to use microwave point-to-point radio or copper; fibre is now the technology of choice.

And, as we'll see in the discussion of the Chattanooga rollout, fibre's killer advantage is reliability.

Australian utilities haven't run fibre out to their poles and transformers and in-network switchgear, however - not because there's no case to do so, but because the world of the smart grid is still in its infancy, and these things take time.

Dedicated channel

There's another reason that fibre is attractive, if not mandatory: it's very easy to create a dedicated channel that won't be visible to, or affected by, other network traffic.

If you (the householder) have bought a 100Mb/s NBN broadband connection, there's no reason for you to volunteer some of your capacity for a freeloading utility - and the utility won't want its ability to reach the meter to be subject to what else is happening on the link.

Once the NBN is in place, however, directing a little bit of traffic over a dedicated channel within the fibre will be a matter of network provisioning and configuration - something that NBN Co is working hard to automate - and won't have to clash with the household's channel.

The Chattanooga experience

Neither capacity nor private network ability really provide the "killer punch" that makes fibre a must-have for the smart grid, and yet there's at least one utility - the geek-famous EPB in Chattanooga - that found fibre so attractive it decided to install its own, rather than wait for the telcos to do so.

Right now, EPB is well short of completing the network that it first decided was necessary back in 2005. It has, however, progressed far enough that we can glean useful data from its experience.

Here's a quick outline of the EPB fibre network:

Maximum household broadband speeds of 1Gb/s

64,000 smart meters connected

415 intelligent power network switches connected

Services now available throughout EPB's 600 square mile service area

31,000 households using fibre broadband services

US$46 million broadband income in 2010-2011

I'll take a look at the network from a financial point of view later.

The EPB deployment demonstrates that wireless is a viable channel for its smart meters - around half of its meters use wireless, the other half fibre. If you compare the number of smart meters to the number of subscribers, it's easy to surmise that as soon as a household connects to the fibre, so is its meter (releasing, by the way, the spectrum to be used by another meter).

EPB's long-term vision includes paying customers to let it manage their heating/cooling and water heater - so that at peaks, the utility, rather than the customer, works out the most efficient use of power (the payoff to EPB being, of course, that it can avoid some of the high cost of wholesale energy during peaks). Trialling the demand side application, EPB claims that it can reduce customers' spend by $50 annually without affecting their comfort - and at the same time, reducing its own costs.

The city of Chattanooga has since piggy-backed its own wireless strategy - a truly ubiquitous public safety network - off the back of the EPB network.

As is clear from its annual report for 2010-2011, EPB's experience is that the fibre is at its most valuable when things go wrong. The technology "beneath the covers" is a network of 465 "IntelliRupters" - not data network switches, but power protection switches designed to be deployed on poles (for example, transformer poles).

They're critical, infrastructure-level components, and EPB is particularly proud of how the network performed during tornadoes in 2011 which severely disrupted its power infrastructure.

The outage was considerable: 1,130 poles down, 415 transformers, and around 90km of wire.

EPB's communications infrastructure was also hit, with three of its seven radio towers downed - however, because of the fibre network, the company says it only lost contact with two of its 27 substations.

By controlling power switching over the still-operational fibre networks, EPB says it was able to avoid outages in 100 areas (where the local infrastructure was still intact, but where power had to be routed around damaged feeders), and avoid 250 truck rolls. The result, EPB says, was that it avoided "thousands of customer hours" of outage - and could devote its effort to where there was damage to repair.

With that event in mind, EPB believes its self-healing power network will reduce the duration of outages by an average of 40 per cent.

I don't have to hand the cost of outages Australia-wide - but nearly halving the duration of outages would be of considerable economic value.

If we consider that all urban electricity utilities in Australia run multi-million-dollar fibre networks less extensive than Chattanooga's, it's easy to imagine a national revenue stream to NBN Co of tens of millions of dollars, with a far greater economic benefit.

EBP's consumer customers

It's a new network, but even so, there are a few things we can glean about the network: Average Revenue Per User (ARPU) is high, new customers are connecting with enthusiasm, and customers add extras at a measurable rate.

At the end of FY 2010, ARPU for households connected to the fibre network was US$166.67 - this is a pretty impressive number for a new network, even if it only had 18,000 subscribers.

What's more surprising is that if I allow a ramp-up for the network's income over the year, to the 31,000 subscribers by the end of FY 2011 generated nearly $46 million income - and ARPU had grown to around US$178 per month per household.

In other words, although the network is large enough to be reaching well beyond the top local demographics, ARPU has grown at around 0.6% per month, passing 7% growth year-on-year. That's down to users buying more services - in its 2010-2011 annual report, EPB said its "upgrade requests" ran at 500 per month.

Actually, the Chattanooga strategy looks brilliant in the long term: it gets a more reliable electricity network, consumers eventually save on their power bills - and they pay a high and so-far-growing ARPU for internet services, the profits of which will help pay for investments over on the utility side.