Authors: Raj Sonak, Najeed Khan
To address industry modernization and digitalization needs in the utilities sector, the use of 3GPP connectivity and LTE/5G-based cellular private networks on licensed and unlicensed spectrums is growing. US-based utilities believe they need secure, scalable and prioritized control of their infrastructure and can justify the ROI from private networks, encouraging them to seek out custom-built solutions, including spectrum and investment considerations. Availability of access to spectrum, in both the low-band (900MHz) and mid-band (CBRS), has accelerated the consideration for investments in private networks.
A number of these companies have run POCs on experimental 900MHz licenses for private LTE networks:
- Ameren, a large electric utility company based in the US Midwest, has signed an LOI with Anterix (the owner of 900MHz spectrum assets), which is expected to result in the first signed commercial agreement.
- Southern Company, based in Atlanta, is one of the 10 largest US electric and gas utilities and the first to implement its own LTE network. It has deployed private LTE networks for utilities on the sub-1GHz spectrum.
- National Renewable Energy Laboratory, in Colorado, specializes in renewable and efficient energy research and development. Funded by the US Department of Energy, it has successfully demonstrated increased reliability of a distributed generation system on 900MHz.
- Exelon, the largest electric parent company in the US based on revenue, was granted an experimental 900MHz license in October 2019 and is initially piloting sites in Maryland.
- NYPA, the largest public power utility in the US, aims to be the one of the first digital utility companies and is looking to deploy private LTE for several use cases, including mobility and drones.
Many countries are considering offering spectrum specifically for utilities. In the US, as of May 2020, the FCC has cleared a 3×3 TDD block in the 900MHz band for private network communications. Such low-band spectrum is ideal for wider coverage, and therefore the best fit economically for private network buildout, supporting mission-critical applications.
Utilities have several options for deploying networks: partnering with CSPs, securing their own spectrum, and taking a hybrid approach. While opex reduction is one of the primary drivers for US utilities, each business model poses different levels of benefit, risk, financial flexibility, reliability and control.
The economic analysis in this paper is based on multiple engagements with different-sized utilities in the US. The specific results referenced reflect a medium-sized, vertically integrated utility with generation, transmission and distribution facilities covering both electricity and gas in multiple US states. The model can accommodate smaller or larger utilities with different footprints, densities and operational parameters. For this analysis we assume a typical situation with an existing wireless network comprised of multiple technologies, many becoming obsolete.
These technologies could include WiMAX and P25 LMR and be used for inter-substation transport, metering infrastructure and real- time communications.
To address the challenges, Ericsson’s business strategy and technology consulting division inCode Consulting analyzed the usage demand, network capacity requirements and economic aspects of building a private cellular network, including an investment
and deployment roadmap and based on a portfolio of use cases. It was important to understand the data and bandwidth demands of traditional mission-critical systems, such as SCADA, DA, DER, tele-protection and mission- critical push-to-talk. Consideration was also given to mobile workforces of linespersons and engineers, who require sufficient bandwidth for their mobility needs and for smart meter rollout across service areas, as well as the need for a network able to support evolving and advanced use cases in the future, such as UAV and AR-based asset management.
The use case analysis was followed by an assessment of the spectrum options, where the feasibility of using 900MHz and CBRS bands to support the use cases was investigated. Each spectrum band comes with unique considerations of coverage, capacity, cost and availability. It is important to study the spectrum from these perspectives in order to develop a TCO model, outlining capital and operational expenses. As mentioned in the cited case study, the utility company has an existing infrastructure of communication towers, site leases, owned and leased fiber routes and microwave backhaul, which should be optimally reused to minimize capital and operating costs. Lastly, an ROI analysis justifies the spend and how private networks can offset existing capital and operating expenses.