LTE4SE

Considering a specific innovation objective, the project aims to evaluate and demonstrate how LTE technologies can enable Smart Grid applications, from monitoring to real time control. In particular, the project will produce a holistic view on the economic and technical tradeoffs for delivering Smart Gird services using public LTE infrastructure. Running under the “Smart Energy Systems Action” Line, the project brings together the following partners: Siemens, Ericsson and KTH.

Expected outcome

In addition to private infrastructures, public networks and LTE will play an important part in the overall Smart Grid Communication Architecture. Depending on the type of application dedicated M2M services are needed. This activity will (a) identify for which concrete use cases public networks are required, (b) evaluate how the technical LTE capabilities have to be used to fulfill the QoS requirements, (c) validate the concepts in test setups, (d) verify the business cases for all stakeholders.

The key deliverables are:

• Use cases and Requirements
• Technical concept and Proof-of-concept
• Business Aspects

The project is divided into three major tasks:

1. Use Cases and Requirements:

In this task the main system requirements of the project will be addressed, which include both business and technical aspects. Partners will define selected use cases to deduce specific requirements that subsequently lead to the key performance indicators of the project. The use case domains Smart Market and Smart Grid will be considered.

Domain Smart Market: Integration of Smart Meters; Challenges: (indoor-) availability; large number of continuously connected nodes (smart meter gateways), especially in rural areas; requirements on IT security & privacy.

Domain Smart Grid: Integration of Distributed Energy Resources (DERs); demand for controlling the feed-in of renewable energy like photovoltaic in order to avoid overload in the system and to ensure the system reliability; Control functions of DER need to be offered through a highly available communication channel; Control of stations, substations can also be a service which is possibly transmitted over a LTE channel. Requirements with respect to the number of nodes, operational environment (rural, urban), traffic classes, quality of service, SLAs, RF-attenuation have to be specified to evaluate the appropriateness of LTE.

The final objective in this task is to add service and business model aspects to the use cases, including value network options

2. Technical Concept and Proof of Concept

Focus of this task is to provide a Proof-of-Concept (PoC) validation of the applicability and the performance of LTE in the smart grid. Based on the selected use case(s) a concept for smart grid communication over LTE is designed following open standards and protocols. By using LTE these standards or protocols might need to be adapted or new components like LTE gateways need to be integrated in the communication architecture. A test setup will be designed and realized for the PoC by building on activities in Stockholm Royal Seaport and the IEC 61850 gateway prototypes from E-DeMa. Performance and the suitability of LTE for smart grid protocols will be explored through experimentation in the LTE test bed. Default configuration of LTE in terms of latency, throughput, etc. in regular deployed mobile operators’ networks is investigated as well as characteristics of the latest LTE releases – Guarantees for smart grid communications over a shared LTE infrastructure are analyzed. We will demonstrate and validate the benefits of the proposed approaches in terms of metrics translatable to user experience and financial gains for the involved stakeholders.

3. Business Aspects

The business aspects task is subcategorized into the following:

• Analysis of cost-performance characteristics of using public LTE networks for Smart Grid;
• Analysis on scalability in terms of capacity when using public LTE networks for Smart Grid applications;
• Business comparison between using public LTE networks or alternative communication solutions in terms of drivers and obstacles
• Identification of feasible business models, relationships between actors and pricing schemes for an LTE enabled Smart Grid.

Business Proposition

The work is targeted towards virtually all Smart Grid market segments, e.g. advanced metering, demand response, distributed generation, energy automation and grid optimization, since the communication infrastructure is a key component in the Smart Grid architecture, regardless of application. We consider two types of markets and the related business values:

1. The cost savings and improved efficiency enabled for utility companies,
2. The sales of equipment to enable these savings/benefits.

The enablement of Smart Grid applications using a public LTE infrastructure would provide value to several actors. First, utility companies would not be required to build and operate a complex communication infrastructure. Furthermore, the competition between mobile operators could be leveraged to obtain competitive pricing schemes for the LTE services. Mobile operators would gain customers with a reduced churn rate. Finally, device manufacturers would benefit from decreasing LTE module prices as a result of an increased adoption of the technology.

Eventually, this project will contribute to the integration of LTE systems in Smart Grids. The results will be of high benefit for utilities and telecommunication companies, on which future investments can be based. Looking into the future market the order of magnitude of overall investments in energy systems is impressive. For example, each year approx. €1 billion of RWE’s total investment budget is invested in RES. EIT estimates the market size for decentralized ICT infrastructures for smart energy in 2020 with 25B€. Figures in the same order of magnitude are estimated by McKinsey with the global market potential for smart grid equipment manufacturers and solutions providers between $15billion and $31 billion annually by 2014. Assume that 1% accounts for communication solutions resulting in an addressable market size of around 250M€. Four to five different communication technologies are applicable for Smart Grid Communication resulting in a possible market share for public cellular of 10-20%.