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The Cellular Smart Grid Grows Up

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One of the first trials by a utility to use public wireless networks for the smart grid has now turned into a full-fledged deployment. Texas utility Texas-New Mexico Power (TNMP) plans to expand its smart grid project, which uses SmartSynch and AT&T (a T) to manage 10,000 smart meters in Texas homes, to 231,000 meters over the next five years.

TNMP was the first utility to tap the AT&T/SmartSynch partnership announced last year, which uses AT&T’s wireless network to connect SmartSynch’s smart meter technology to utility control stations. SmartSynch says the $123 million deployment will be the largest U.S. residential deployment of smart meters using a public wireless network.

Some of the advantages for a utility to operate a smart grid network over a phone company’s network is that the utility doesn’t have to put down the capital expense of building out and operating a network, but can, instead, rent space on the existing network. Cellular operators can also offer the utility the tech advances that the large telecoms can deliver. Network builder Silver Spring Networks also announced a partnership with AT&T in December.

Phone companies have been looking into creative ways to use their 3G networks for “machine-to-machine” services like the smart grid, which don’t include consumer customers and cell phone accounts (for a new report on machine-to-machine networks see here, subscription required). Consumers can be fickle, with churn and continuous upkeep — in contrast, a smart grid utility deal can be relatively low maintenance — and machine-to-machine services can diversify their networks. The smart meter traffic on the wireless network — largely real time pricing, but perhaps also demand response events — will also likely be pretty minimal compared to say a wireless video stream.

On the other hand some utilities are opting to build their own networks. Owning the network gives the utility control and avoids any issue of having to share bandwidth with other telecom customers. In addition regulated utilities also get to earn profits on capital expenses like building their own networks.

It’s still up for debate — at least in my mind — what method is more beneficial and cost effective. It seems like there’s major advantages for really large utilities to build their own networks, as well as for municipal utilities that can build networks and sell other services like broadband access. Smaller utilities, which have less access to capital, are probably better off renting the smart grid network space.

For more research on machine-to-machine and smart grid check out GigaOM Pro (subscription required):

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Image courtesy of james_jhs’ photostream.