Cisco: Smart grid will eclipse size of Internet

Cisco knows a bit about building networks and it sees a $100 billion market opportunity in the smart grid.

The company, whose networking gear is installed in all corners of the Internet, on Monday will announce its intention to make communications equipment for the electricity grid--everything from routers in grid substations to home energy controllers. CEO John Chambers is scheduled to discuss Cisco's smart-grid push Monday morning at a JP Morgan conference in Boston.

Cisco's move is a sign that the creaky electricity distribution system is poised for a digital upgrade. Other high-tech companies, including IBM, Intel, and several start-ups, are ramping up smart-grid efforts to capitalize on expected investments from utilities and federal governments. Cisco estimates that the communications portion of that build-out is worth $20 billion a year over the next five years.

The idea of the "smart grid" is to modernize the electricity industry by overlaying digital communications onto the grid. Smart meters in a person's home, for example, can communicate energy usage to utilities in near real time. That allows the utility to more efficiently manage the electricity supply and potentially allow a consumer to take advantage of cheaper rates.

Cisco started devising a strategy to enter the smart-grid arena last fall. Some utilities are already testing how well its routers and switches can help more efficiently manage the flow of electricity and prevent outages in grid distribution equipment. Cisco also released EnergyWise software earlier this year for managing energy use in office buildings

Cisco's smart-grid program covers goods already part of its product portfolio, such as data center equipment. But in other cases, such as home networks and smart-meter security, Cisco is developing new products, said Marie Hattar, vice president of marketing in Cisco's Network Systems Solutions group.

For example, Cisco could make a home energy controller device or software for its Linksys routers and set-top boxes to give consumers a read-out of how much energy different appliances use.

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There's potential for communications gear in "neighborhood-area networks" as well. Using sensors or an embedded router in substation, a local utility could send information on the demand for electricity in real time to power generators. That will allow generators to run more efficiently and incorporate more wind and solar, said Hattar.

A "smart grid" infrastructure adds digital communications to the power grid so it can manage the flow of energy to run more efficiently and to incorporate more wind and solar power. Click to enlarge.

(Credit: Department of Energy)

Over time, people's homes will have more sensors in appliances, which will give consumers more detailed usage information to help cut usage and help utilities avoid stressing the grid during peak times, smart-grid advocates say. More sensors also mean that utilities will need to bulk up their data center communications to handle much more data, Hattar said.

Cisco's position is that the communications over the grid should be done using IP (Internet Protocol) in conjunction with existing industry protocols and standards. Not all smart-meter companies use IP to communicate information and the utility and IT industries are still defining a number of different standards.

Even though Cisco advocates IP, Hattar said that a modernized electricity grid will be separate from the Internet, which she indicated should lessen security vulnerabilities.

"Our expectation is that this network will be 100 or 1,000 times larger than the Internet. If you think about it, some homes have Internet access, but some don't. Everyone has electricity access--all of those homes could potentially be connected," she said.

Even though many vendors expect a lot of money to be spent on modernizing the grid, smart-grid technology is for the most part still in the testing phase at utility-sponsored trials.

Many utilities tend to be conservative about investing in IT. Another factor that makes at least some utilities unenthusiastic about smart-grid technology is that many states have regulations structured around power plant investments rather than efficiency-related IT.

Cisco--along with General Electric and SilverSpring Networks--was picked for a large smart-grid project in Miami from Florida Power & Light, which aims to install 1 million two-way utility meters.

[supoman]

If this would mean I can dump AT&T as my voice and data provider then BRING IT ON!!!

[Austin_Mike]

WERD!

[Archullus]

Reminds me of some business development work I did 10 years ago. The name is slightly different, it lacks the killer product points and it isn't clear how clever their funding model is, but I'm sure the guys at Cisco know their job and aren't hanging everything out for view yet.
One wonders if they scaled the technical hurdle that the Brits baulked at when I looked at it.

[ghostofitpast]

I remember Scott McNealy talking up this sort of a thing at an Oracle World. He claimed that he tried to convince GE of the value of every light bulb having its own IP number. For all I know, Chambers was in the audience at the time; since I think he was giving one of the other keynotes.

[OldCrow726]

Sounds like "Big Brother" is gonna be watching if I charge my Blackberry too long. Gonna get my own windmill and solar panels and get OFF the Grid.

[dadcss]

This technology has fantastic potential to do good - BUT
If humans can find a way to abuse a good thing, history has shown - they will.

[Maclover1]

Umm yeah I read that too in this article, between the lines that is, after I sent it through my CONSPIRACY filter....NOT.

If this technology forces the conspiracy freaks off the grid and into solar and wind, its working.

[OldCrow726]

I dont feel like a conspiracy nut wanting to get off the grid. I just want to insure my freedom to burn my lights when I want, wash the clothes, wash dishes, take a HOT shower. Everyday stuff like that. Please don't lump me in with nuts. You don't know me.

[jemiller0]

As long as it can be done in a cost effective way without a lot of maintenance head aches, I like the idea of generating my own power anyway. If we moved to a model like this we wouldn't need massive infrastructure to pipe the electricity around. I really hope that solar becomes more economical and more efficient. The same thing with small scale wind. I'm for use of smart grid technology, but, I would also like to see consumers be less dependent on the power companies and able to generate at least some their own power. I believe smart grid technology will help that.

[t8]

History is full of conspiracies. What makes anyone think that they have suddenly stopped?
To deny the existence of conspiracies is a conspiracy in itself.

[digginestdogg]

I just hope they thoroughly think through security and not just gloss it over Microsoft style. Phishers, foreign agents, and other adversaries of commercial, governmental, and public interests will otherwise find a gold mine for profit and antagonism that dwarfs the current damage we see. Imagine bot nets on that grid. Cisco likely has the expertise--but will they take the time to get it right and be willing to increase the costs sufficiently? ANother question is the administrators of the systems--the weakest link. I just read a story about a man who was deported from the US in 2005 but stayed an got a job with the Santa Clara Water district and went in the weekend after being fired and wired millions of dollars overseas--they caught it in time and blocked it. But the bigger the network the tougher it will be to ensure all those who have access do no harm. And this network will dwarf the unruly and poorly secured current internet.

[MD_Willington]

They had better start making utility grade products then.. the consumer grade they offer ain't that great.

[Winniroo]

So many smart things computers can do, but we have wasted a decade or more making eye/brain/wallet candy on the WWW instead of focusing on making the world a safer, cleaner, more efficient place.

Postman said we are entertaining ourselves to death.

We are.

[Vegadan_Man]

The only way this "smart-grid" will ever succeed is to give a no-bid contract to Microsoft. They have a long history of provided secure solutions. As long as you download antivirus software and keep it up to date. Oh, and run a software update three times a day. Anyone can do this unless you are an ignorant Apple user. Sheesh.

[timber2005]

If you are running software update for any microsoft product 3 times a day, you have proven youself to suffer ID-10T syndrome.
Microsoft releases once a month (typically) and never back to back days, or even 3 times a day.

[nguyenhtuan]

Has anyone read the book "Hot, Flat, Crowded" by Thomas Friedman. He has a chapter called "when IT (information technology) meets ET (Energy Technology)." This makes the Energy Internet system. And amazingly, Cisco is making the first step.

With the control of Internet over energy, we can control the usage of electricity efficiently and less wastefully. Because of its connection, we can control the every single device at home from everywhere with a mobile phone connecting to the Internet. Yes, this is smart.

http://www.nguyenhtuan.com

[db2776]

Skynet in the making ;)

[timber2005]

Needs to be IPv6 only addressing. All I can say.

Actually, give it is own /64 subnet, and keep it from being accessed on the normal internet (or anything that isn't in that addressing range), and that would boost security quite a bit.

[damfino11]

Can someone confirm for me that this implies the provision of broadband service to anyplace that is linked to the electric grid?

http://www.daniellieberman.org