Cellular Communications and the

Future of Smart Metering

Olivier Pauzet
Sierra Wireless, Inc.
September, 2010

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Introduction

The Smart Grid era is upon us, as energy suppliers around the globe invest in new technologies to
optimize antiquated grids. With an end-to-end digital, two-way intelligent communications infrastructure,
utilities will be able to capture details about how energy is transmitted and consumed in real time. As a
result, they will be able to enhance electricity generation and distribution, reduce peak consumption by
shifting demand loads and boost efficiency through improved diagnostics. The end result: the ability to
serve more customers with less energy supply.

The Smart Grid concept encompasses a continuum of technologies, including:

Energy generation (renewable energy, distributed generation sources, etc.)

Transmission and distribution (load management,
demand response)
Smart Metering
Smart metering (residential, commercial, and
Global Trends
industrial)
Electrical vehicles (charging station management) ABI Research projects that
about 212 million smart
This paper focuses on Smart Metering as one of the meters will be deployed
cornerstones of the Smart Grid vision. It explores the drivers worldwide by 2014 (up from
and benefits of Smart Metering in an intelligent energy grid 76 million in 2009).
and examines the role that cellular technology is playing in
these projects. The paper also discusses the critical success European Union member
factors for Smart Metering communications infrastructures and countries are required to have
smart meters across 80
details the best practices that should be kept in mind when
percent of their metering
designing wireless Smart Metering solutions. infrastructures by 2020.

The American Recovery and

Reinvestment Act of 2009
Smart Metering: An Overview included approximately $11
billion for Smart Grid and
Smart Meters help modernize the power grid by providing the Smart Metering projects, with
ability to remotely monitor and transfer energy consumption $7.1 billion earmarked for
and power quality information more frequently and reliably. 2010.
This allows utilities to work both behind the scenes and with
their customers to manage the distribution network more Asia-Pacific has the largest
efficiently. By collecting real-time energy consumption and fastest-growing smart
meter population, now
information, Smart Metering infrastructures empower suppliers
approaching 1 billion units,
to: according to Berg Insights.
Reduce operating expenses by managing manual Berg Insights also reports that
operations (meter reading, service disconnection) State Grid Corporation of
remotely China (SGCC), the power
Improve forecasting and smooth power-consumption utility covering 80 percent of
Improve customer service through profiling and the population, will invest
$200 billion annually in Smart
segmentation
Grid infrastructure through
Reduce energy theft (a serious problem in some 2020.
markets)
Simplify micro-generation monitoring and track power
generated as well as consumed

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Smart Metering also benefits end customers in the form of energy savings, reduced carbon emissions,
improved service reliability and improved customer service and responsiveness.

To make all of these benefits a reality, however, utilities need a secure and flexible two-way
communications infrastructure to connect and communicate with Smart Meters. Several options are
available, including Power Line Communications (PLC), low-power radio frequency (RF) mesh solutions
and cellular wireless wide-area network (WAN) technologies.

Wireless Communications in the Smart Grid

Energy suppliers have long used wireless WAN solutions to communicate with concentrators monitoring
large numbers of meters in neighborhood-area networks (NANs). Increasingly, they are using cellular
solutions for point-to-point communications with individual meters as well. As a result, cellular
technologies are becoming an important part of Smart Metering deployments and the Smart Grid as a
whole.

Energy suppliers have two primary WAN/cellular technology options: second-generation (2G) and third-
generation (3G). Most cellular point-to-point Smart Metering infrastructures today are part of Global
System for Mobile Communications (GSM) networks and use the General Packet Radio Service (GPRS)
data service, a low-cost 2G solution. New 2G cellular Smart Metering infrastructures, however, are more
likely to use the evolution of GPRS, Enhanced Data Rates for GSM Evolution (EDGE). EDGE
technologies offer more bandwidth and higher connection speeds than GPRS, and are now comparably
priced. EDGE is also the preferred 2G technology from the carriers standpoint, as its higher bandwidth
allows more devices to be connected over the network. In North America (especially in the United States),
Code Division Multiple Access 1 times Radio Transmission Technology (CDMA 1x RTT) is also a very
popular, reliable, and widely available 2G connection option.

With its much higher bandwidth and data rates, 3G technologies also play an important role in Smart
Metering deployments. 3G solutions have traditionally been reserved for the NAN level connecting
wireless concentrators that send large amounts of data. For point-to-point metering communications
consisting of very small messages, 3G has often been viewed as an unnecessary additional expense.
However, as todays mobile carriers seek to move more customers to 3G networks for their own cost and
capacity reasons, they are now more likely to work with energy suppliers to make 3G networks more
attractive and cost-effective for Smart Metering projects. As a result, energy suppliers may have a surplus
of wireless bandwidth available in their metering deployments, presenting opportunities for additional
revenue-generating services such as consumer-targeted HAN equipment, and even reselling of wireless
capacity to other utilities as part of HAN deployments.

As with GPRS and EDGE, suppliers have a choice of data services over 3G networks, including
Wideband CDMA (W-CDMA), High-Speed Downlink Packet Access (HSDPA), and Evolution-Data
Optimized (EVDO) Revision A. Newer HSDPA technologies can now be acquired at comparable cost to
W-CDMA and have become the preferred solution. In CDMA networks, EVDO devices are more widely
available than 1x RTT technologies, however 1x RTT remains the preferred option for Smart Metering
applications due to its lower cost and the fact that higher data speeds are typically unnecessary.

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Requirements for Successful Smart Metering Deployments

Regardless of the communication technology employed, the Smart Metering

Smart Metering communications infrastructure must meet Communication
several core requirements. These include: Success Factors
High reliability and long lifespan: Smart meters (and
High reliability
the communications technologies supporting them) Low maintenance
should be able to stay online for 10, 15, or even 20 Interoperability
years without requiring that components be replaced or Cost-effectiveness
directly maintained. Therefore, metering Strong security
communications technologies must be highly reliable Low power consumption
and designed with industrial-grade specifications to Low installation costs
meet extreme environmental conditions of shock, HAN interoperability
corrosion, temperature, vibration and humidity.

Low maintenance: During the 10- to 20-year life span of a Smart Meter communication device,
the communication modules firmware will likely be upgraded for example, to add new features,
enhance security, or maintain compliance with the latest wireless communication standards.
Utilities need to be able to remotely manage, configure, test, validate and upgrade firmware over
the air using secure wireless device management services that the utility or service provider can
easily deploy. Smart Metering solutions should also employ modular designs so that, for example,
a WAN module can be changed without having to replace the entire meter.

Interoperability: Smart Metering solutions need to employ standard metering protocols to assure
interoperability with changing energy supplier equipment as well as consumer equipment over
the life of the meter.

Cost effectiveness: Smart Metering communications technologies that will be deployed on a

massive scale must be designed to minimize those costs and provide excellent value.

Security: When two-way command and control systems are embedded into energy management
systems, several security threats must be addressed. These include consumer privacy, data
integrity and maintaining continuity of service throughout the grid.

Low power consumption: In a modular design, the WAN or other communication module will
rely on electricity provided by the meter, which means that certain design requirements must be
met. First, the communications module must be designed to operate using the low supply of
current that the meter can provide. Second, suppliers need to ensure that communication
systems are extremely power-efficient for cost reasons. After all, even when Smart Meters and
their communication systems are consuming a relatively small amount of power, that
consumption adds up when millions of meters are connected point-to-point.

Low installation costs: Beecham estimates that installation makes up 30 percent of the total
system cost of any Smart Metering project. Suppliers need solutions that simplify installation and
reduce the time and expertise required to deploy Smart Meters. For example, in a low-power RF
deployment, installation technicians require an advanced skill set and a variety of equipment to
verify that the Smart Meter communication system and antenna are properly deployed and
functioning as intended. Indeed, one reason that many energy suppliers are now looking to

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 cellular communications is the lower installation costs involved. Cellular communication modules
can be designed with built-in network analysis technologies that make them quicker and easier to
deploy.

Support for Home-Area Networks (HANs): Energy suppliers and analysts expect HANs home
networks linking smart thermostats, appliances, electric vehicles, etc. to the metering
infrastructure to play an important role in influencing consumer behavior. With HANs,
consumers will be able to respond on a minute-by-minute basis to energy pricing changes and
remotely shift demand into off-peak periods, when energy is more available and less expensive.
To enable these benefits, however, Smart Meters and their communication systems must be
designed to interoperate with HANs. That means having the ability to support multi-utility
configurations (i.e., to integrate water, gas and other services) and having IP routing capabilities.

Advantages of Cellular Technology in Smart Metering

Why Cellular?
Deployments
Outsourced network
deployment, operations, and
In the past, while many utilities relied on cellular technologies to
maintenance
connect concentrators and industrial sites, they often used other Low installation costs
communication networks to connect the meters themselves. Now, as Fast implementation
cellular technologies have advanced and carriers have introduced Global coverage
more attractive rate plans, more and more suppliers are deploying Proven and secure
wireless WAN solutions all the way to the meter. technology
Several networks available
Cellular WAN solutions offer a number of advantages for Smart at most locations, allowing
Metering deployments. First, when a utility chooses cellular backup capabilities
communications, they can rely on the mobile operator to provide the
network instead of having to bear the cost of deploying, operating,
and maintaining the entire communications infrastructure themselves. By outsourcing the
communications network to a mobile operator, energy suppliers can radically reduce both installation
costs and implementation times for their Smart Metering projects. In addition, mobile operators
increasingly view machine-to-machine (M2M) communications as an important and growing subscriber
market and are implementing new service offerings and billing approaches to compete for this business.
As a result, data rates for WAN-based Smart Metering communications are now extremely competitive.

Todays cellular coverage also extends literally everywhere, covering approximately 99 percent of the
addressable population for Smart Metering infrastructures. Indeed, most areas are covered by multiple
cellular networks, allowing utilities to deploy Smart Meters using the best cellular network available
depending on location, and maintain backup network capabilities.

Finally, cellular WAN is now a proven technology that is more than capable of supporting Smart Metering
infrastructures. Cellular technology has existed for more than 20 years, and the security and flexibility of
wireless communications is no longer debated. In fact, 1 billion machines already use cellular networks
today, and data communication (typically IP-based) now makes up 20 percent of all cellular
communications worldwide.

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 Cellular Smart Metering
Best Practices for Wireless Smart Meter Design
Best Practices
As more suppliers incorporate wireless WAN technologies as part of
Build intelligence into the
their Smart Grid initiatives, the industry is establishing a number of
communication module, not
best practice design guidelines for cellular Smart Metering the meter.
infrastructures, described in the following paragraphs. By following Employ strong IP-based
these guidelines, energy companies, meter manufacturers, and other security mechanisms.
stakeholders can help assure that cellular Smart Metering Allow for software upgrades
technologies deliver high performance, high value, and long service via patches not just
lives. complete firmware upgrades.
Use embedded SIMs to meet
Intelligent Communication Modules industrial-grade
specifications.
The most fundamental best practice now widely accepted in the Choose a solution with a
industry is that smart meter designs should build intelligence into the robust development platform
to continually add value.
communications module, rather than the meter. In this design, the
Be sure that backup
meter is responsible only for metering. The communication module
communication paths are
handles all of the more sophisticated decisions related to the available.
management of metering information, such as: Simplify installation with
modules that include network
Opening the connection with back-end servers quality analysis tools.
Monitoring signal strength Use power-efficient features
Managing the security of the connection and design.
Acting as gateway between the WAN and HAN Design to integrate with
HANs.
Selecting alternative communication paths if the primary path
is unavailable
Detecting a jamming attack on the meter

This model offers a number of benefits for energy suppliers. First, it allows them to use a modular
architecture, in which the same meter can be used with any communication technology (cellular, PLC, RF
mesh, etc.).

Building the intelligence into the communication module rather than the meter also makes the solution
more future-proof. Suppliers retain the flexibility to change communication technologies and even
complete modules over time (for example, migrating from 2G to 3G cellular technology in the future)
without having to replace the meter itself. By avoiding hard-coding functions into the meter itself, they also
retain the ability to add new capabilities or meet new requirements (such as complying with new security
standards) via software updates.

In order for the communication module to deliver this level of adaptability and intelligence, the module
should be built with operating system-like processing capabilities, and potentially with an actual
lightweight operating system.

Information Security

Wireless and cellular infrastructures must include strong and proven security technologies. They should
incorporate mature defense mechanisms employed by critical public safety and government wireless
applications today, as well as Smart Metering-specific security measures. These security measures
include:

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 Secure connectivity and encryption: In any communication system, it is essential to ensure
that sensitive information reaches its intended recipient and that it cannot be intercepted or
understood by an individual or device attempting to intercept it. This is especially true when the
information is contractual data used for billing purposes. Strong authentication processes are also
mandatory to prevent hackers from accessing sensitive data, uploading malicious software or
turning meters on and off. Wireless communication systems should employ strong and mature
encryption protocols such as Secure Sockets Layer (SSL) which is already widely used to
protect retail and web-based payment card transactions or Internet Protocol Security (IPSec)
encryption, which is already widely used to secure virtual private network (VPN) connections.

Jamming detection: In some higher-risk environments, defensive systems are needed to thwart
deliberate network attacks. Modern smart meters should be equipped with wireless technologies
that quickly detect such attacks and take appropriate actions, such as triggering an alarm,
sending an alert through another communications channel, recording the event for further
investigation and so on.

Autonomous operation: In the event that the meter loses connectivity with the wireless
communications network, the meter must be able to continue operating.

Additional Best Practice Design Considerations

Other best practices for successful Smart Metering projects include:

Software patch upgradability: Everyone agrees that the ability to upgrade firmware, software,
and capabilities remotely is essential for any Smart Metering communications technology.
Support for basic firmware upgrades, however, is not efficient enough for large-scale
deployments. After all, if a utility has to replace the entire 1-Megabyte firmware file on millions of
Smart Meters to perform a minor upgrade, the cellular data costs quickly become enormous. With
the ability to roll out software changes as patches, suppliers can upgrade only those parts of the
firmware code that have changed, using a software package of just a few kilobytes. In general,
software patches are often a tenth the size or smaller of upgrading the entire firmware package.

Embedded SIM: Today, the removable plastic Subscriber Identity Module, or SIM cards, used in
some cellular networks are designed for the mobile phone market and have a projected lifespan
of just a few years. Smart metering communications, which must meet industrial-grade
specifications, should use SIM cards that are embedded into the wireless module.

Robust and comprehensive development platform: To enable the intelligent communications

modules energy suppliers need, cellular modules should be programmable and allow energy
suppliers and meter manufacturers to add capabilities and value as they see fit. Along those
lines, cellular communications vendors should offer a mature and comprehensive development
platform that encompasses all of the elements necessary to build customized solutions. The
platform should also allow meter manufacturers to take advantage of proven, mature
technologies for every aspect of wireless communication and management, without having to
reinvent these capabilities from scratch.

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 Sierra Wireless: A Strong
Backup communication paths: The Smart Partner in Smart Metering
Metering communications system should provide Communications
the capabilities and intelligence to employ
alternative communications paths if the primary Sierra Wireless is leading the way in
mechanism is unavailable. For example, if GPRS wireless WAN communication
IP communication is offline for some reason, the technologies for Smart Metering
meter should be able to communicate via Short deployments. Sierra Wireless
Message Service (SMS), i.e., a text message. AirPrime intelligent embedded
modules, AirLink intelligent
Network quality analysis capabilities: To gateways and routers, embedded
simplify deployments and reduce installation SIMs, and the AirVantage
costs, the communication module should be able Management Services Platform
to analyze wireless network quality and clearly provide a comprehensive portfolio of
communicate results to installers. For example, solutions for energy suppliers and
instead of technicians having to check multiple meter manufacturers that meet
SIM cards on their cell phones to measure signal todays demanding Smart Grid
strength, as is commonly done today, the module communications requirements.
could scan and assess the signal strength of the
Sierra Wireless provides:
different networks available and convey this
More than a decade of
information to the technician. Even a simple tool experience in wireless data
such as this can make it much easier and quicker communications for utilities
for installation technicians to determine proper Leadership as a financially
meter placement, which cellular network is best for strong and well-established
the location, when an external antenna is required technology vendor that will
and where it should be located, etc. support smart metering
technologies throughout
their lifespan and beyond
Low power consumption: Communications Energy industry expertise,
modules should be designed to optimize power including membership in key
efficiency at all times. For example, modules industry associations
should include a low-power mode that allows them Established relationships
to switch off the cellular communications module with cellular network
when it is not in use. This is particularly important operators and technology
when the communication module is operating on approval bodies
Broad-based technology
battery power (such in a Gas or Water smart
solutions that accommodate
metering deployment). a variety of wireless
technologies and platforms,
HAN interoperability: The communication and service all regions
module should be able to act as a HAN gateway, Proven reliability with a
with the ability to communicate with other home track record of delivering
devices, collect information from gas and water industrial-grade
communication solutions
meters, and transmit data to remote displays in
the home. To do this, the communication module
must be designed with embedded support for IP
protocols and routing. It should also support
common low-power wireless communication standards such as IEEE 802.15.4, Zigbee, and
Wireless M-Bus.

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Looking Toward Tomorrows Wireless-Enabled Smart Grid

For a variety of reasons, wireless WAN technologies are becoming a compelling choice for Smart
Metering communication and will continue to play an important role in these projects. Suppliers seeking
more flexible, adaptable, and cost-effective Smart Metering deployments are increasingly seeing the
value of outsourcing their network operations to established wireless WAN operators, and incorporating
intelligent cellular communications infrastructures into their Smart Metering projects.

To take advantage of the installation cost savings, flexibility, fast implementation times, and other
advantages of wireless solutions, energy suppliers and meter manufacturers should be carefully
evaluating those areas where cellular technologies can provide the most value in their Smart Grid
initiatives. They should seek out solutions that provide robust, pre-packaged wireless management,
configuration, and security capabilities, without requiring them to build these capabilities from scratch.
And, they should ensure they are working with cellular technology partners capable of meeting the key
requirements and best practices for modern wireless Smart Metering design.

To find out more about how wireless communication technologies can empower Smart Grid deployments,
visit .sierrawireless.com/energy

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