Why Cisco Loves the Smart Grid

When you talk to Cisco about energy, you’re reminded of what the nebulous smart grid term actually is. It is, at its core, a network and Cisco, whose networking gear is pervasive on the Internet, wants a big hand in how it gets built.

Cisco yesterday announced new gear and services aimed at the electric utility industry, filling out a suite of products that touches multiple points on the grid. At every step, there’s a piece of networking hardware involved, whether it’s a gateway on poles collecting data from two-way smart meters, or routers at substations.

The idea of the smart grid is that overlaying a digital network onto the electricity grid gives utilities the ability to monitor their assets, such as power lines and transformers, and to deliver power more efficiently and resolve outages quicker. This control network is important to manage the flow of power, particularly as more distributed energy sources come online.

The challenge for utilities is that in many cases they have heavy investments in older network architectures, such as the TDM point-to-point networks. To handle higher bandwidth and get to a more flexible network, many utilities are transitioning to same technology that runs the Internet: IP and Ethernet.

Cisco’s GridBlocks Architecture recasts the entire utility network around IP, which should improve performance and security, says Sanket Amberkar, a marketing manager in Cisco’s Connected Energy group. “With the wide area network of the grid, there’s the need to run multiple applications on same infrastructure with different requirements on latency,” he says. “The technology utilities have today was architected for point-to-point applications, which becomes very difficult to scale and manage.”

Cisco’s routers and gateways run all traffic over IP, which could be data from line sensors, voice communication between line workers, and even video for security surveillance, according to Cisco executives. The company is also developing applications for specific purposes, such as diagnosing an incident and dispatching workers to fix it. Another tool, which Cisco tested with the state grid of China, lets engineers design the physical power network for new substations along with the wireless data network.

Ultimately, all these devices generate data and, in the case of sensors and smart meters, lots of it. And that, of course, drives demand for Cisco’s main business of selling gear for data centers. 

A few years ago, Cisco scrapped a home energy management product designed to let consumers shift when they ran their dishwasher or charge their electric vehicle to save money. Ultimately, these sorts of features didn’t justify a network and dedicated home display.

But Cisco’s clearly still committed to the energy business and, if it helps establish a standards-based system, we may start to see the benefits of the long-promised smart grid.