Duke Energy embraces cellular for smart grid

Updated: Duke Energy (s duk) is turning to cellular networks as the backbone for its smart grid. The utility detailed the network plan in a white paper released earlier this month, and revealed one of the most aggressive uses of cellular networks by the utility industry in the U.S.

In the white paper, Duke Energy’s Manager of Technology Development David Masters wrote that Duke plans to invest $1 billion into digital grid technologies, and the utility decided to rely heavily on already available networks like cellular connections for a variety of reasons. Cellular networks are based on existing standards that have been used extensively; carriers will continue to invest in the network infrastructure to the benefit of the utility; and carriers use Internet Protocol as the transport layer. In addition, Masters writes that one of the most compelling reasons is that:

Duke Energy has no desire to be in the communications business. We need to harness already- existing expertise and capabilities that the cellular networks provide in designing, building, and maintaining the communications.

Duke didn’t name specific carriers in the report, but said it would be working with multiple carriers, and already has a relationship with Verizon (s vz). This local article in the Charlotte Business Journal also names Verizon as one of Duke’s partners for the smart grid.

Public vs Private Debate

It’s been a big debate in the smart grid industry whether utilities will want to use public networks, or build their own private networks. Vendors selling various equipment have emerged on both sides of the debate. We’ve featured the thoughts of industry guest authors like Narasimha Chari, co-founder, CTO Tropos (Smart Grid Networks: The Public vs Private Debate) and Stephen Johnston, CEO SmartSynch (10 Reasons Why Utilities Want to Use Public Networks for Smart Grid).

As Duke Energy explains it, public networks have a lot of benefits. But many utilities want to build their own private networks like what PG&E and Florida Power & Light are doing with Silver Spring Networks. Some utilities fear that public networks can’t offer them the reliability and security they need to run utility operations.

It seems like at this point a lot more utilities are planning to build private networks, and there are only a few networks I can think of that are connecting smart meters to cellular connections. One reason for that is carriers have tended to charge high prices and there’s been an economic barrier to embedding cellular chips in smart meters.

Communications Node

But Duke is routing around that cellular smart meter issue and designing its network rather differently than many of its utilities peers. Each transformer will connect to a carrier network, and the transformer will be hooked up with something Duke is calling a “communication node.”

The communication node will act as a gateway on the network and will both process and analyze data and connect with devices on the edge of the network like smart meters, home energy systems, plug-in vehicles, and other distribution devices.

Masters says to think of the communication node like “an iPhone (s aapl) for the modern grid”:

It is a device with the future communications capability for multiple networks, with capability to route the data between multiple devices and with enough storage and processing power to enable an extensible ecosystem of data applications which are anticipated to be built over a number of years.

Update: Several reports (and readers) have said the nodes come from Ambient Corporation (s AMBT). The communication node sounds like SmartSynch’s GridRouter device, and SmartSynch has been piloting its router with Duke Energy. Duke says it has already installed hundreds of thousands of nodes and other grid gear for the network.

Duke actively didn’t want the core of the network based around smart meters and said all of the standard systems on the market wouldn’t work for Duke’s unique footprint.