Cisco Systems is turning its vast networking expertise to the power industry, outlining a strategy to help utilities and their customers more efficiently manage power supplies and energy consumption.
Cisco's Smart Grid initiative, announced May 18, is designed to offer a communications fabric based on IP standards that would touch not only the companies that generate and distribute electricity, but also the end users that consume it, according to company officials.
"Ultimately this will help utilities manage their supply," and end users manage their consumption, Marie Hattar, vice president of network systems and security solutions at Cisco, said in an interview.
Hattar said demand to create more efficient power grids is growing to the point that Cisco expects this will be a $20 billion-a-year global business within five years.
Other vendors also are looking for ways to more power distribution more efficiently. Analog Devices May 18 announced new simultaneous-sampling ADCs (analog-to-digital converters) that officials say will help utilities, under pressure due to rapidly rising electricity demand worldwide, monitor and control energy consumption, cost and quality.
Cisco already has begun aiming its technology at the power industry. A member of the six-year-old GridWise Alliance, Cisco in January rolled out its EnergyWise energy-efficient networking technology for businesses. Hattar said that in a world where power demand is increasing and businesses are looking for ways to reduce their energy costs-for both economic and environmental reasons-creating a more energy efficient power grid is essential.
Cisco also is working with several utility companies-including General Electric, Florida Power and Light and Silver Spring Networks-on a Smart Grid project in Miami, and with other companies and the Environmental Defense Fund on the Pecan Street Project, which is aimed at making Austin a key testing ground for clean energy and Smart Grid technologies.
"The talk is real," she said. "It's no longer a matter of -if,' but when smart grids are going to happen."
Currently, electrical outages cost U.S. businesses about $50 billion a year, according to the Electrical Power Research Institute. The institute says that smart grids will reduce the impact of outages and cut U.S. greenhouse gas emissions by 60 million to 211 million metric tons of carbon each year by 2030. Pilot programs around the country have shown a 10 to 15 percent decrease in household energy consumption when Smart Grid technology is used.
Cisco officials also quoted a GridWise report that said efforts by the Obama administration around renewable energy could result in 280,000 new jobs.
Cisco's ambitious plans call for the use of products the company already offers and a host of solutions that are coming over the next 12 to 18 months, Hattar said. The company's switches and routers already are based on IP standards that can bring intelligence, security and efficiency to large and small electricity substations, and will help bring remote management and automation capabilities to utilities' transmission and distribution platforms.
Cisco's EnergyWise solutions also will be the basis for its Business Energy Management solutions, which will help businesses optimize power throughout their operations by using the network as the platform. The company's network security offerings will form the foundation of its Secure Architecture of Energy.
Cisco also will take advantage of its data center portfolio-which will grown as the company rolls out its Unified Computing System strategy-and lifecycle services also will be key pieces to the overall Smart Grid initiative.
In addition, Cisco will build offerings for IP-based backhaul communications for smart meters that will enable utilities to integrate proprietary solutions and overall Smart Grid platform, allowing them to preserve many of the investments they've already made, Hattar said.
Cisco also will partner with a host of technology and utility companies to build out its offerings.
Company officials said there already is growing demand around the world for smarter energy platforms. For example, Ontario officials in Canada have mandated that smart switches be used in all businesses and homes by 2010, and European governments are shooting for 20 percent of its energy to come from renewable sources by 2020. China has a five-year plan in place to use smart sensors for its largest generators and substations by 2012, and the U.S. government is investing $11 billion in Smart Grids.
There are a number of benefits for both utilities and households from the use of Smart Grid technologies, Hattar said. Utility companies can see a 30 percent increase in reserve capacity and a 39 percent reduction in power generation greenhouse gas emissions.
Homeowners can see savings of up to 12.5 percent on their energy bills, she said.