Market success will depend on delivery of benefits beyond consumer Internet services, study indicates

Palo Alto, Calif. — December 7, 2004 — The Electric Power Research Institute (EPRI) and its subsidiary Primen today released Broadband Over Powerline: Status and Prospects 2004, a white paper summarizing the state of emerging technology that allows for high-speed data communication over existing electric power lines.

Broadband over powerline (BPL) has been heralded as a potential "third wire," competing with DSL and cable as a means of providing Internet access to U.S. homes and businesses.

"This white paper is a guide to where BPL stands right now, including information on vendors, projects, and commercial deployments," says Karen George, a principal at Primen, a Boulder-based energy market intelligence company affiliated with EPRI. George co-authored the study with EPRI's Clark Gellings, vice president for Innovation.

As a means of high-speed Internet access, BPL has a number of appealing features, including transmission speeds that can be higher than cable, and symmetrical speed—meaning that both uplink and downlink speeds are equally fast, compared to the slower uplink speeds of cable and DSL options.

But Internet access is only one of the services enabled by BPL. Other offerings such as voice-over-Internet Protocol and video on demand are possible with BPL as well. "Other broadband providers are bundling telecommunications and video services—and those offering Internet access using BPL will likely need to do so as well in order to boost revenue per subscriber," contends George.

This will be especially important as competitive pressure leads to lower prices for Internet access, and as alternative broadband technologies emerge in coming years. "Verizon and other telecommunications companies are making huge investments in fiber networks so they can offer customers bundled service packages that include TV and video," reports George. She also notes that increasing deployment of wireless broadband networks such as Wi-Fi and WiMax will also likely heighten market competition.

A critical factor in the business case for BPL is that it offers electric utilities a high-value communications network that could enhance the power delivery system. "Functions related to energy and utility network management—from outage detection to dynamic pricing to distribution system monitoring—hold promise as a means of reducing utility operating costs and improving reliability," says George. "For electric utilities, these BPL applications may be even more valuable than the potential profits from consumer Internet services."

What could such utility applications be worth? George points to work conducted by the EPRI Consortium for Electric Infrastructure to Support a Digital Society (CEIDS) to assess the business case for applications related to a customer communications and control hub, what EPRI calls an "energy portal" for on-site energy management and home management.

"Returns can be compelling. The economics of demand response are especially strong," says George. Demand response refers to programs for signaling customers when electricity demand is high, enabling them to automatically or manually reduce energy use and thus their utility costs.

Savings from using BPL as the communications platform for a smart electric transmission system, or IntelligridSM, which is fully automated, self-healing, adaptive, and predictive, also holds tremendous promise.

"Although it's difficult to factor in all the benefits and costs, EPRI believes that investment in a communications system that enables energy and network management could be worth in the range of seven times the initial expenditure," reports George.

To obtain a copy of the 26-page white paper, visit http://my.primen.com/Registration/BPL1204/signin.asp (registration required).

Primen (www.primen.com) is an energy market intelligence company that develops, analyzes, and delivers timely information and analysis tools related to electric and natural gas markets, competitors, pricing, and new energy products and services. Primen is a subsidiary of the Electric Power Research Institute (EPRI).

EPRI (www.epri.com), with major locations in Palo Alto, Calif., and Charlotte, NC, was established in 1973 as an independent, non-profit center for public interest energy and environmental research. EPRI's collaborative science and technology development program now spans nearly every area of power generation, delivery and use. EPRI's members represent over 90% of the electricity generated in the United States. International participation represents over 10% of EPRI's total R&D program, with 62 members and more than 130 funders.