Cisco and Itron have collaborated to develop the IPV6 standard which is being applies to the smart grid. The standard supports network security, quality service, manageability and reliability- the things you need to build a true multi-service network.
It also enables increased flexibility and modularity so that it can connect multiple devices and communication technologies for various different applications. The standard makes data more freely available and establishes more pervasive monitoring, more analytics, and control over the electrical grid. This modular system allows for more innovation in the market and increased traffic flows.
IP allows for an increase in communications and it supports local device-to-device decision-making with regards to power. The decision-making will be secure, scalable and manageable.
The IPV6 network creates a horizontal knowledge base of how to manage the network- as this grows, the utilities’ operational costs will decrease. IPV6 supports decision-making within the microgrid model.
Multiple inputs from various devices require a virtualization layer to transport multiple services for a common IP network- this must be made manageable by the utility. Manageability and virtualization go hand in hand. This is calling for a whole new mindset change within the utility as it has always been a one way communication and delivery of power. This new two-way flow of data and power poses a challenge for the utility as it affects business processes and organizational systems. This is creating a definite paradigm shift in the communication layer. This will help organizational silos to integrate data and view business processes more holistically.