The elusive pot of gold

5 October 2002

The prospects for high speed long distance power line communications in North America remain uncertain. L Carmichael, EPRI, Palo Alto, CA, USA; R E Abbott, Plexus Research, Boxborough, MA, USA

The use of power lines for high speed data communications has long been seen as a promising source of additional income for power companies. Work continues around the world, but this pot of gold at the end of the power line is proving more elusive to secure than anticipated by some of the early proponents.

The requirements

Any commercially relevant development of high speed data communications systems that takes advantage of existing power lines must satisfy three absolute requirements:

• The product or system must actually work, meeting the important data communications requirements that have been established for it. This can be a formidable challenge.

• The product or system obviously must have a value that is greater than its installed cost. This cost has many components:

• The cost of the communications equipment itself, including terminal and interface units at both ends.

• The cost of any "grooming" of the power lines. This includes equipment to neutralise the effects of distribution apparatus that impairs data communications.

• The cost of installing, powering and maintaining the equipment. This includes the installation labour, the ancillary hardware, the provision of a suitable power supply for system components and the periodic maintenance of the system.

• The technology and its implementation must be legal and non-interfering. Stringent standards exist (these are somewhat more rigorous in Europe than in North America). Any system that both performs well and meets cost targets may still fail because of compliance problems with interference standards.

The challenging frontier

Within the North American context, all PLC technologies can be lumped into one of four categories:

• short distance, low speed communications;

• short distance, high speed communications;

• long distance, low speed communications; and

• long distance, high speed communications.

Short distance essentially means within the home. Long distance refers to medium voltage lines.

The first three of these categories are well represented in the market by many proven and available products. The fourth of these is the challenging frontier, a frontier that currently is attracting some very good minds and substantial investment.

Very significant development efforts are underway in Israel, Europe, the Pacific Rim and North America. These efforts, and the results claimed, may be confusing because they are often not directly comparable. An approach that may be technically and economically sound in Europe may not be attractive in

North America.

In North America the distribution system differs in very important respects from its typical European or Asian counterpart. There may be feeders emanating from the substation that serve customers up to 60 km or more away at voltages that generally range between 4 kV and 34 kV. There may be intermediate levels of transformation in isolated circumstances.

Eventually the communications path reaches the last distribution transformer before serving the customer. At that transformer the distribution voltage is reduced to the service voltage of 240 volts. In North America an average of five to eight customers may be served by that transformer, even fewer in rural locations. This contrasts with the much larger number of customers served on the secondary of a typical European substation transformer.

These differences in the distribution system and in the number of customers served on the secondary profoundly impact the technical and economic picture for North American PLC systems.

What other factors make the challenge so formidable? Many things. Noise from all sources, including corona, micro arcing at connections, licensed and unlicensed radio sources and electrical loads, is clearly something that must be addressed.

Distribution transformers severely attenuate higher frequencies, although several firms are now claiming their technology will permit them to communicate through transformers sufficiently well to operate effectively.

Capacitor banks can also challenge certain technical approaches, while distribution line switching and phase and load balancing may mean that the communications path between the transmitter and a given customer's receiver could change dramatically and often without notice.

The industry participants

The eyes of the utility industry in North America are on the small number of companies that are developing high-speed long distance PLC. Some of these are listed in the table below.

Several of these companies are basing their systems on chip sets provided by European or Israeli companies such as DS2 or ITRAN.

Each of these system developers has sought to involve one or more electric utilities as test beds and even as investors.

The business case for PLC

The utility perspective

Utilities, understandably, are attracted to any source of revenue that can be derived from existing assets and that can be harvested to provide a recurring revenue stream. Assuming that technical, cost and regulatory issues are not barriers, a utility would postulate a business model, make the needed assumptions, and see if there is an attractive business proposition.

There are several potential models for such a business:

• The utility acts simply as a "landlord" that possesses an asset (the distribution system) that can be leased as a potential communications medium to a third party. In this case the utility would make its distribution systems available but would not own or operate the PLC system. Obviously, such an arrangement must carefully define safety issues and co-ordinative practices.

• A second option is where the utility owns and maintains the PLC system, and leases out capacity on that system to one or more content and service providers.

• Another option is for the utility to assume the role of system owner/operator and content provider, offering and billing directly for the services the customer chooses to subscribe to.

The consumer perspective

The other side of the equation deals with the customer for the various services that would be supported by the high speed PLC system. What does the customer want? What is he willing to pay? What are his alternatives? When could the PLC option exist?

Currently, there are only a handful of residential services that require "broadband" data rates. These include internet access, email, and certain entertainment services with rich video and audio content. Most other services may be supplied by slower, more mature systems and delivery.

What other value-added services might be supported? Various security, wet basement monitoring, third party outage notification, and health assistance features are readily added, but these do not require high-speed service. Many consumers want a community information centre that would provide such items as school lunch menus, football schedules, weather, etc. The value of these services to the consumer and his willingness to pay needs to be established.

A question that looms larger is that of competitive alternatives that substantially meet the customer's needs. The broadband needs are increasingly being met by cable, hybrid fibre/coax (HFC) systems, DSL (digital subscriber line) telephone lines, fibre to the home (FTTH) and satellite. If customers are already served with a high-speed data service that they feel is adequate at a suitable price, there may be no interest in switching to the alternative. Clearly, the PLC high speed communications offering is likely to be more attractive in rural areas, where service by other means is not an option.

Going forward Regulations

Certain earlier PLC systems tested in Europe were found to radiate radio frequency emissions, which could interfere with other communications services. European regulations concerning radiation have been more stringent than counterpart regulations in North America. However, the US Federal Communication Commission (FCC) has recently moved to bring its regulations into harmony with the IEC/CISPR. Some observers believe that the challenge of avoiding radiation problems while maintaining high data throughputs, is one of the most formidable problems in developing a system having broad commercial appeal.

Development and publication of data

Utilities are notoriously conservative, and most utilities make major decisions cautiously. Their decisions traditionally rest upon well-developed business cases and upon published comprehensive data on technical characteristics and performance. What data? Unfortunately, there has been almost no general publication of comprehensive technical performance data in peer-reviewed journals and symposia in North America. PowerComm Systems is one of several notable exceptions.

It is obvious that many of the early deployments are still truly experimental in nature. As such, the data from these deployments are dynamic, and will continue to change as techniques are evaluated and refined. This business is competitive, not for commercial sales but for credibility and for venture investment. Utilities have a vested interest in these technologies. Accordingly, many of the vendors are in promotion mode, and treat early performance data as proprietary information. Eventually, a clear sign of emerging maturity in the high-speed, long distance PLC arena will be the presentation of high quality useful data in prominent public forums.

As high-speed, long distance PLC systems may eventually demonstrate their usefulness there will be a need for some accepted objective means of benchmarking them. This may include establishing certain consistent and representative test and demonstration environments, and evaluation testing in standardised environments by disinterested third parties.

The partial business case

The efforts at developing a clear business case for the North American market have been directed at explorations of the potential residential market for PLC based broadband services, assuming that a suitable system was installed. These business cases look at how much of the market might be obtained at various price points, including the effects of competitive broadband options such as fibre-to-the-home, hybrid fibre/coax, digital subscriber line, wireless broadband, satellite, and others. Various ownership models are also explored.

Any complete business case must also recognise the cost of coping with the complex and dynamic technical issues implicit in a presumed deployment. For example, if repeaters are required at locations every 500 metres along distribution primaries, the business case must contain the cost of each repeater installation. That installation involves dispatching a two-person bucket truck crew, their working "hot" on the primaries, and mounting and connection of the mounting hardware, protection and cutout devices, coupling apparatus, and the low-voltage power source for the repeater. No matter how low cost the repeater may be, the costs of this equipment and labour are significant. Recurring routine and emergency maintenance must be considered, along with the implications of various "down time" scenarios. The full definition of the installation labour and equipment issues, and the support issues, cannot be developed with precision until the systems are further defined. Until then, most attempts at PLC business cases are broad estimates of only parts of the overall picture.

Get involved or wait and see?

In some ways, the current activities to develop high-speed long distance (primaries) PLC may mimic the fevered development of low-speed long distance PLC by a similar number of companies in the 1970s. Those systems were designed to perform automatic meter reading and load control. Several evolved into profitable businesses and were widely deployed, but later faded from popularity. One system has continued to evolve and is in increasingly widespread use today.

Some utilities are eager to be involved in the early experimentation, and some see these developments as investment opportunities. Other utilities have adopted a "wait and see" posture, noting that if the PLC technology is proven to meet the hopes of its developers, and if it becomes commercially attractive, there will most certainly will be an opportunity to become involved at that time.

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