Utility communications networks have traditionally been implemented within vertical application silos, often using proprietary, application-specific technologies. This has been especially true for advanced metering infrastructure (AMI) and other field-based network systems that support distribution automation and smaller substation installations. According to a recent report from Pike Research, a part of Navigant’s Energy Practice, however, emerging smart grid concepts are driving utilities to consider their communications networks as strategic assets, and to adopt standards-based technologies, built to support the Internet Protocol (IP) suite as well as legacy protocols. In response, vendors are rushing to deliver standards-compliant or standards-capable solutions.

In 2010, only 3% of global shipments of radio frequency-based communications nodes for distribution automation and/or AMI applications were based on fully standard technologies. This figure will increase to more than 70% by 2015, the market intelligence firm forecasts, and to 85% by 2020.

“The promise of standards-based, multi-purpose utility networks is finally arriving,” says chief research director Bob Gohn. “While there is still room for innovative proprietary network elements, the momentum is clearly with standard IP-based wired and wireless technologies, whether provided by public carriers or on privately built networks.”

As utilities shift toward a fully integrated grid-wide communications system that will require more sophisticated, and higher value, networking and communications gear, this market will peak at $2.96 billion in sales in 2014, before subsiding to just under $2.6 billion per year in 2020, according to the report. The revenue peak in the middle of the decade will result from the convergence of major smart grid and smart meter deployments in China, Europe, and North America.