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Smart Grids and 5G Networks enable next Industrial Revolution

Geschreven door Ben van Lier - 22 juli 2015

Ben van Lier
According to the American economist Jeremy Rifkin, the biggest economic revolutions arose from amalgamating new communication technologies with new energy systems. He states the following about such synthesis in his book[1] the Third Industrial Revolution: “New energy regimes makes possible the creation of more interdependent economic activity and expanded communication exchange as well, facilitate more dense and inclusive relationships”. This brings up the question if merging new developments such as Smart Grids, Intelligent Machines and a new fifth generation mobile telecommunication network (5G) will form a basis for a new industrial revolution.

According to Rifkin, infrastructure is not just a static item consisting of separate components, jointly enabling economic activities. According to him, infrastructure should be seen rather as an organic link between communication technologies and energy sources that jointly create a living economic system. He states that communication technology is the central nerve system of this economic system, overseeing, coordinating and managing the activities of this economic system. On the other hand, energy is the blood circulating through this system, enabling the system to convert possibilities provided by nature in the form of raw materials, for example, into goods and services. These ensure growth and survival of the organism. In Rifkin’s opinion, the development of the Internet of Things, allowing for interconnecting household and external devices in networks, in combination with new power generating options around the home (solar panels, small windmills) will instigate fundamental change in the economic system. Among others, this change arises when users and energy providers are interconnected in networks, simultaneously fulfilling a new role as a ‘pro-sumer’.

Smart Grids

Merging communication networks, such as the internet with new power networks in a smart grid, is a development that has been going on for many years. Among others, Wang (2011)[2] states that this new generation of combined networks will consist of: “electric power systems that incorporate diversified renewable energy resources, automated and intelligent management is a critical component that determines the effectiveness and efficiency of these power systems. The management automation and intelligence are envisioned to offer a variety of advantages over the current systems in terms of digitalization, flexibility, intelligence, resilience, sustainability, and customization, which entitles the name smart grid to the next generation power systems”. The main challenge of these smart grids is controlling demand for and supply of power generated by a range of distributed and interconnected power producers. The power jointly produced must in turn be distributed to an increasingly wide range of energy consumers, such as people and machines. To Wang[3] (2011), developing a fast, reliable and secure communication network plays a crucial role in the development of such an ‘Energy Internet’. He states that this communication network should at least fulfil the following requirement: “Real-Time bidirectional communications are the foundations to support the comprehensive power system management tasks which, in certain cases, requires time-intensive and data intensive information exchange”. In a memorandum, Siemens[4] and other parties conclude that smart grids arising from the combination of new communication and energy networks in essence create opportunity for: “the digital control of the power delivery network and two-way communication with customers and market participants” through the realization of a “fully automated delivery network that can ensure a two-way flow of electricity and information between the power plants and appliances and all points in between”.


To develop smart grids, in the long run we need new, faster and more secure forms of data exchange than available in the current networks. According to Soldani (2013)[5] , this is because the current networks were never invented or developed “for flexible spectrum usage, carrying mission critical or massive machine type of traffic and/or connecting other type of devices than smartphones, with much more stringent performance requirements, especially, in terms of throughput, latency, reliability, robustness, security and dependability”. According to Soldani, in particular the fast-growing ecosystem of Things, surrounding us as a consumer, producer or pro-sumer, will require a new fifth generation of international mobile telecommunication network within a few years. With its partners, the UN Agency for Information and Communication Technologies ITU works on the development of a vision for mobile broadband communication possibilities that will be required in the future. This vision is set out in a programme with the title IMT-2020. This programme is designed as the basis of a new generation of worldwide wireless communication systems that are a match for fiber-optic cable infrastructures in terms of both speed and reliability. The scope of this new mobile communication system can be classed as enormous. According to ITU, it comprises[6]: “the potential application fields of IMT-2020 systems, in addition to voice and video, span from healthcare to industrial automation, virtual reality, automated driving, and robotic systems controlled with an imperceptible time-lag. One-millisecond end-to-end latency is necessary for technical systems to replicate natural human interaction with our environment, a goal that experts say should be within reach of future”. With this statement, ITU clarifies that the new 5G mobile communication networks are no longer intended exclusively for human communications; instead, they also serve other actors such as Things. According to Nokia, the increasing volume of data and information communicated with and between Things, requires[7]: “more reliable communication links but also lower transmission delays (latencies) – machines can simply process information much faster than people.


The development of people and Things being interconnected in networks, mutually exchanging and sharing energy and information, will create a new, complex ecosystem. The independent self-learning[8] and evolutionary development capabilities[9] of this ecosystem will be determined by the software and algorithms that exist in this ecosystem. This new ecosystem simultaneously shifts paradigms from a traditional centralised top-down approach to a distributed lateral development based on collaboration. This new and complex ecosystem will perform and further develop based on interaction and communication between a gigantic number of actors present in this ecosystem. Our knowledge of ecosystems with such autonomous performance and self-development is limited at this point. Perhaps the starting point for new knowledge development can be derived from the words of Herbert Simon: “In such systems, the whole is more than the sum of the parts, not in an ultimate, metaphysical sense, but in the important pragmatic sense that, given the properties of the parts and the laws of their interaction, it is not a trivial matter to infer the properties of the whole.

Ben van Lier works at Centric as Director Strategy & Innovation and, in that function, is involved in research and analysis of developments in the areas of overlap between organisation and technology within the various market segments.

[1] Jeremy Rifkin (2011) The Third Industrial Revolution. How lateral power is transforming energy, the economy, and the world. Palgrave McMillan, New York. ISBN 9780230115217
[2] Wang W. Xu Y. Khanna M., (2011) A Survey on the communication architectures in smart grid. Computer Networks vol. 55, pp. 3604-3629
[3] Wang W. Xu Y. Khanna M., (2011) A Survey on the communication architectures in smart grid. Computer Networks vol. 55, pp. 3604-3629
[4] Siemens AG (2011) Communications network solutions for smart grids. Smart Grid Division, Nuremberg, Germany
[5] Soldani D. and Mazalini A. (2014) A 5G Infrastructure for Anything-as-a-service. Journal of Telecommunication Systems & Management. Volume 3, issue 2, pp. 1-10
[6] http://www.itu.int/en/ITU-T/focusgroups/imt-2020/Pages/default.aspx
[7] Nokia Solutions and Networks Oy (2014) White paper – 5G Use cases and requirements. Espoo, Finland
[8] https://www.centric.eu/NL/Default/Themas/Blogs/2015/05/06/On-the-verge-of-machine-learning-and-machine-intelligence-
[9] https://www.centric.eu/NL/Default/Themas/Blogs/2015/03/13/Artificial-Life-and-Emergence

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