Communications and energy network modernization readiness is something that numerous cities and utilities are eager to reach. Yet, only 28% of cities and utilities believe their existing communication networks are ready to support smart initiatives within the next five years, according to a from Zpryme.

In its Network Trends for Utility & City Infrastructure Modernization report, Zpryme canvassed cities and municipalities to rank their main drivers for network modernization. The top two drivers are rising customer expectations and improving resiliency from storms and outages.

Beyond that, cities seek to provide improved integrated distributed energy resources, the development of smart cities and improved economic viability through network modernization. While utilities share some of the same drivers, they also emphasize the need for digital resiliency from cyber attacks.

Current Pain Points & Challenges

Before we can dive into the challenges specific to network modernization, we need to understand the current issues municipalities and utilities are facing. Regarding communication networks, cybersecurity concerns outstrip other pain points by a significant amount (54%). Following within a few points of each other comes inadequate network coverage (36%), obsolescence issues (31%) and operating costs (31%).

The top challenge to network modernization that municipalities and utilities cited in this report was budget limitations, 80% and 68% respectively. Other concerns include limited access to viable technology and vendor solutions, business benefits/ROI, and security.

Yet, municipal budget shortfalls will only get worse in the coming months as the pending stimulus package stalled due to the presidential election, creating difficulties for utilities and residents alike. Despite the $900 million dedicated to the Low Income Home Energy Assistance Program, roughly 82 million households were expected to lose utility shut off protections last month. By and large, utilities are working with residents on payment programs as the effects of the pandemic linger longer than expected.

Without federal support, cities are going to have to be creative about how they allocate resources to one of the most important pieces of post-pandemic recovery. Utilities will also struggle greatly as residents lose the ability to pay for necessary services, constricting the cashflow necessary for network upgrades to match increasing expectations from customers.

“With the prospective additional fiscal aid dwindling, consumers, business, and local governments will have to fend for themselves in the coming months.” –Gregory Daco, US Economist at Oxford Economics (AP News).

An Answer in IIoT Investments

Despite these challenges, there are practical steps that utilities and cities can take today to move forward in grid modernization strategies. Network modernization is a foundational piece to what is really going to bring about dramatic shifts in how cities and utilities can manage crisis and the demands of the future. The deployment of modern, multi-purpose networks, industrial monitoring devices and data-driven analytics is now aiding communities in planning and response to unforeseen events

In Zpryme’s Network Trends report, 90% of all respondents agreed that a city of the future will need an advanced communication network to power Industrial Internet of Things (IIoT) devices. Utilities are driven by a faster, more responsive grid (58%), while cities are keen on improved data-driven decision-making capabilities (56%).

As of now, 54% of respondents said they are already utilizing some IIoT solutions and 57% plan to budget for IIoT Technologies over the next three to five years. Budget limitations, however, may slow the ability for cities and utilities to deliver on their IIoT strategies over the next few years. Even so, 80% of respondents recognize that IIoT is a critical component for addressing digital transformation and 73% believe it’s critical for integrating renewables and distributed energy resources moving forward.

To support these modernization efforts, communications networks will have to be flexible and able to support a diverse mix of use cases. Public cellular carrier (LTE, 5G) and Radio Frequency (RF) and Wi-Fi networks are expected to carry much of the telecommunications load over the next 10 years, so inclusive networks that can support multiple transport methods will be key.

Looking Ahead

While cities and utilities work to provide services during the COVID-19 crisis with as little disruption as possible, they will be under additional pressure to source future-proof infrastructure and support in the coming years. Industry partners and vendors will need to find creative, affordable solutions that scale quickly and deliver the consistency we are all desperately needing.

If nothing else, the challenges heightened by the pandemic have helped refocus on the importance of building on foundational operational use cases. Now more than ever, we’re learning to adapt and use technology to overcome challenges. We’re seeing first-hand the benefits of intelligently connected distribution networks in terms of gaining remote visibility and ensuring public safety while maintaining economic viability and continuity. By building on a solid IIoT foundation and paying close attention to market trends, we can navigate our new normal and step into a more connected and resilient future together.

Learn more about network adoption & investment trends in our new interactive report.