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Cisco (NASDAQ:CSCO) will partner with systems integrator channel partners, vendors and utility customers to deliver what it says will be an end-to-end, highly secure network infrastructure solution for utility companies to help their customers manage power supplies and energy consumption more efficiently.

Cisco’s so called “Smart Grid” infrastructure plan looks to create a two-way communications fabric smart network that goes from electrical generation to businesses and residences based on Internet-Protocol standards. Cisco says a utility network based on this kind of smart network can reduce power outages and energy consumption. The Electrical Power Research Institute (EPRI) estimates that electricity outages cost U.S. industry about $50 billion a year. The ERPI also estimates that a smart grid could reduce U.S. greenhouse gas emissions equivalent to 60 million to 211 million metric tons of carbon dioxide annually in 2030.

"It will be a great asset to the utility companies to leverage the Cisco networking products for data networking and command and control in conjunction with the smart grid initiatives," says Carol Pochardt, vice president of Data Center and Storage Solutions at Dimension Data, one of Cisco’s largest systems integrator channel partners.  "Cisco partners like Dimension Data will be able to conduct needs assessments and systems integration for the utilities."

The opportunity could be a big one for partners.

"Cisco’s Smart Grid initiative allows partners to build new networks for the energy industry that not only meet business requirements, but also address environmental and ethical concerns – providing clean power intelligently from alternative energy sources while controlling energy demand from the home user and business alike," says Rich Schofield, business development manager for the network integration practice at Dimension Data.  "Additionally, as this Smart Grid infrastructure gains traction and financial incentives increase to control – or allow control of – electricity consumption, businesses will be more and more interested in Cisco’s EnergyWise solution, driving equipment renovations that provide this functionality."

The initiative should also lead to significant integration project opportunities, he says
"Both Smart Grid and EnergyWise will also increase the number of network-attached devices, as equipment that was previously not connected to the network will now need to be in order to provide the optimized power control this solution envisions," he adds. "This, in turn, will drive the need to refresh network infrastructure to accommodate an increase in attached devices.”

The IT networking giant says the project is already underway and will enable monitoring of electricity utilization, optimizing of energy delivery and reduction of energy usage and cost. The plan will also improve system security.

“[Cisco]’s experience in designing networks based on industry standards will bring much-needed expertise to utilities striving to integrate smarter, on-demand energy utilization capabilities that result in greater energy conservation, lower greenhouse gas emissions and innovating end-user services,” Cisco says in a prepared statement announcing the initiative.

The building blocks of Cisco’s smart grid are standard Cisco products including:

  • Switches and routers
  • IP-based backhaul communication solutions
  • Cisco’s home energy management and business energy management solutions
  • Cisco’s data center portfolio of products

Cisco believes its plan will address a fragmented market, and one with the potential to reach $20 billion annually within five years.