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Thanks to a number of technological advances, as well as declines in the price of equipment and monthly services, satellite communications are emerging as a viable and attractive means of connectivity for many smart grid applications - including substation automation, distribution automation, advanced metering infrastructure backhaul and remote monitoring - according to a report from Pike Research.

Revenue from satellite services and equipment for smart grid applications will reach $368 million by 2020, increasing from just under $67 million currently. Numerous satellite service providers and equipment manufacturers are now aggressively pursuing the utility market, a trend that should further reduce the cost of satellite service and equipment even as bandwidth and connection speeds improve, according to the report.

"Satellite-based communications have historically been a last resort for grid operators, mostly for remote substation connectivity," says Bob Gohn, vice president of Pike Research. "But improved cost and performance is allowing satellite communications to be used in an increasing number of grid applications, enabling a tripling of forecasted equipment revenue over the next eight years, with even higher service revenue growth."

He adds that although satellite-based systems will remain a niche technology compared with terrestrial options, utilities will increasingly consider them for communications options.

Many utility executives remain wary of using satellites for critical smart grid applications because of concerns over latency, interoperability, security and bandwidth efficiency. Pike Research's analysis, however, indicates that many of these concerns are based on outdated perceptions.

New technology and product offerings have addressed many of the cost, performance and reliability challenges associated with earlier systems. At 600 milliseconds, round-trip satellite communications latency is adequate for most smart grid applications and compares favorably with many terrestrial options, according to the report. In addition, data rate options of up to several megabits per second are commonplace, while planned systems may even be faster than some cable or 4G broadband services today.

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