4.3.
Exploring synergies between
digital communications, energy
and other infrastructures
Telecommunications, energy utilities and other utilities and infrastructures have historically operated as separate industries.
This is despite the fact that investors have largely seen telecoms as utilities, and despite obvious network synergies
between telecoms and other network infrastructures, in both construction and maintenance. Telecoms companies
usually do not want to be seen as utilities for two main reasons.
Telecoms usually want light touch regulation, which is only possible when they can credibly claim that they
operate in competitive markets and, unlike utilities, offer differentiated products.
Telecoms usually want to be able to use exclusive spectrum to keep potential competitors and disruptors out of
their markets. Again, this is only feasible if the industry can claim to have competitive and differentiated products.
Telecoms have pursued their non-utility status with the aim to maximize return on their investments through light touch
regulation, spectrum privilege and service differentiation. Meanwhile, utilities such as energy companies have so far
been cautious not to act as major telecom disruptors, because different regulations and entry barriers in telecoms such
as spectrum.
However, energy utilities are now beginning to look at expanding into telecom infrastructure for the following reasons:
1.
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Energy utilities need telecom-powered smart grid solutions. The sustainability agenda is likely to influence the
electricity market in a major way, particularly through pressures on energy efficiency (saving) and investments into
renewable energy sources. This will lead to a requirement to remotely control and manage power consumption
directly at the end-user appliances, i.e. remotely managing power supply for example for factory machinery,
battery-charging stations or household appliances. In addition, there will be a need to manage large numbers of
small local power sources (e.g. solar, wind) in relation to the national power grid. All this needs digital connectivity,
in some cases wireless. Given the risk of failures causing power blackouts, any communications infrastructure used
in the smart grid has to be highly reliable, and by default as strategically important as the power grid itself. This is
why some utility companies are now building their own communications networks, with both fibre and wireless
components, to get greater control. Excess capacity of these networks may be sold on a wholesale market or even
used in the utility companies’ own consumer telecom businesses.
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