May 18, 2009

Cisco Outlines Smart Grid Strategy

Cisco outlined its plan to deliver an end-to-end, highly secure network infrastructure solution that helps utility companies and their customers manage power supplies and energy consumption more efficiently.

Cisco's plan establishes a complete communications fabric from electrical generation to business and the home based on Internet-Protocol standards. This will build intelligence, resiliency and two-way communications into an electricity distribution system that has been traditionally fragmented. Cisco®'s Smart Grid solutions will address critical points within the energy infrastructure: from data centers and substations, through neighborhood-area networks, to businesses and homes. The company's experience in designing networks based on industry standards will bring much-needed expertise to utilities striving to integrate smarter, on-demand energy utilization capabilities that result in greater energy conservation, lower greenhouse gas emissions and innovative end-user services.

Cisco has already begun sharing its networking expertise with leading utility providers around the world and is building innovative network solutions for them and their customers to monitor electricity utilization, optimize energy delivery, reduce energy usage and cost, improve system security, and lessen their impact on the environment. In the months to come, Cisco plans to deliver products and additional services to support this initiative - one that is aimed squarely at addressing the growing Smart Grid communications infrastructure market projected by Cisco to reach $20 billion annually over five years.

Facts/Highlights:
Cisco's end-to-end strategy for a secure, intelligent electrical system will deliver benefits for utilities, businesses and consumers as well as mitigate environmental impact:

•Electricity outages cost U.S. industry about $50 billion per year, according to EPRI (Electrical Power Research Institute). A Smart Grid will significantly reduce the impact of these outages in the future and will also reduce U.S. greenhouse gas emissions equivalent to 60 to 211 million metric tons of CO2 annually in 2030, according to EPRI estimates.

•Various pilots including one sponsored by the U.S. Department of Energy's Pacific Northwest Laboratory have shown a 10-15 percent reduction in household energy consumption when Smart Grid technologies are used.

•The GridWise Alliance, of which Cisco is a member, estimates that Smart Grid incentives and investments as encouraged by the American Recovery and Reinvestment Act of 2009, will generate approximately 280,000 direct jobs across various categories.

Cisco will deliver Smart Grid solutions for service innovation and grid optimization that impact the entire spectrum of an energy infrastructure from power generation to businesses and homes:

•Secure, resilient and remotely managed Transmission & Distribution Automation solutions will optimize grid management and cost. Cisco Switches and Routers are standards-based platforms designed to bring intelligence, security and efficiency to large and small electricity substations.

•Cisco will provide solutions for efficient, IP-based backhaul communications for smart meters that will integrate proprietary solutions into the overall smart grid platform.

•Cisco's Home Energy Management and Business Energy Management solutions will help optimize energy demand, use and cost by providing greater access to data and analysis tools. Cisco EnergyWise solutions, announced in January '09, will be the basis for Business Energy Management, enabling business customers to use their network as the platform to optimize power throughout their operations and real estate.

•According to Carnegie Mellon University and other leading research centers, 49% of cyber security threats to the electrical infrastructure initiate from breaches of physical security. Cisco's product portfolio and leading experience in both physical and cyber security is helping leading organizations create a Secure Architecture for Energy. This comprehensive and converged approach results in reduced operating costs and improved cyber security for critical infrastructure.

•Cisco's state-of-the-art, standards-based data center portfolio enables utilities to use sophisticated data collection techniques and storage solutions for power grid data analysis and subsequent optimization.

•Cisco Lifecycle Services can offer system-level support for creating and maintaining a resilient, converged network that meets the unique operational needs of Smart Grid solutions.

To achieve its vision, Cisco will partner with systems integrators, industry vendors and utility customers to deliver solutions that evolve energy management and conservation:

•Cisco is currently working with a number of leading utilities around the world (see supporting quotes) and recently announced its involvement in "Energy Smart Miami," a collaboration with General Electric, Florida Power & Light and Silver Spring Networks to build out the most comprehensive Smart Grid deployment in the nation for the City of Miami.

•Cisco is also working with the City of Austin and others including the Environmental Defense Fund on the "Pecan Street Project" to make the municipality a virtual laboratory for clean energy and the nation's Smart Grid goals.

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