Smart Opportunities

Eltel was a product of the intense wave of telecoms deregulation that swept through the Nordic countries at the beginning of the last decade. Its specialist business units cater to the needs of utilities, mobiles, and fixed telecommunications and transport companies. It is a true pioneer in the infrastructure business, managing healthy growth and over 50 acquisitions. But recently Eltel has turned its considerable experience to a new enterprise: smart grid infrastructure. Eltel works with some of the biggest utility companies in northern Europe, providing intelligent solutions to their network needs.

“In general, we have all the biggest utilities in northern Europe as our customers, and the hiring of our services is a big spend for them,” explains Axel Hjärne, President and CEO of the Eltel Group Corporation. “We typically deliver the seed services, both in build and maintenance. We have many long-term contracts, where we work in an extremely integrated fashion with our clients.

“What is happening now is our utilities clients are requesting new solutions in new areas in order to develop their scope of work. Having extensive maintenance contracts means we are present in the networks everyday, and know very well what is happening out there. This gives us an edge over many other companies and developers.

“We are in a good place here at Eltel because we have telecom knowledge, experience and capabilities – as well as vast experience in the electricity sector. We combine all our experience in the infranet market. It is a very strong position indeed. We are delivering our services in 10 countries in northern Europe, Germany, the UK and around the Baltic Sea region, both in electricity and telecom.”

With the fast development of the smart grid industry, Eltel is making the most of its privileged position in the infrastructure and electricity industries. In the 12 years since its inception, the company has garnered unique experience and know-how in IT, telecoms and electricity provision. Hjärne says: “The development of this smart grid technology to meet the needs and demands of the utilities companies we service is a very good opportunity for us. We are also looking to explore the opportunities offered by the emerging smart grid industry in order to widen our service a bit. There are opportunities emerging like electric vehicles, sensors and smart meters.”

Growing consumption
The opportunities are there. As Juha Luusua, President of Eltel’s Power Distribution division succinctly puts it: “The more energy you want to save, the more electricity will be consumed.” It might sound contradictory, but Eltel is onto something: efficient electricity. “Electric vehicles are a great example, because, as we want to save energy – or fossil fuels – we need more electricity.”

According to Luusua, when the company first spotted an emerging trend in smart grids, it moved fast. “We started our activity with smart metering: providing house-meter management services,” he says. “We have converted over three million meters in northern Europe to date. We are active players in developing charging networks for electric vehicles. We also have a project and service solution for wind power generation and we have a range of services for network management for the medium- and low-voltage network.”

The more energy you want to save, the more electricity will be consumed

The smart grid market is developing, with demand skyrocketing. Companies like Eltel will have a number of challenges ahead of them. The current system is built around an outdated model in which electricity is produced centrally and then distributed by the grid. Luusua explains: “The world is changing and a centralised power generation model will not be dominant. Germany is a good example, where the nuclear plants will be shut down.

“The trend will be for more and more distributed, local generation, with a focus on green energy. That is a big challenge for the electricity networks, as they are more or less designed to serve the antiquated centralised generation, and then to transmit
and distribute the power. Decentralised generation means there needs to be a technical and business solution by the providers to feed locally produced electricity to the grid and other consumers.

“Two-way energy management demands more intelligence in the electricity network. Also, the instability of grids is increased due to the nature of green energy like wind and solar power. This need for intelligence is the main drive behind our smart grid solutions; to increase network reliability.”

A big concern when it comes to grid conversion and the installation of intelligent systems is the cost of implementation. But Luusua dismisses the issue: “Conversion into smart grids is not as expensive as one expects. It must be done step-by-step; starting with smart metering, where the utility network company will change all the meters to the new generation two-way communication meters. This is, of course, a big investment, but quite often it is the biggest investment companies have to make when converting their grids.

“It takes several years, but while network companies are preparing their business plans, it is easy for them to see how they will get profit out of it. The interesting thing is that, with smart grid solutions, you don’t need to invest so much money to strengthen the networks; so the smarter the network, the lighter it can be. Smart grids open an analytical way of seeing, online, how the network is doing. The network can be run at its optimum and it will become more predictable.

“All this means more efficient asset management. Smart grids will do the same for the power sector as IP did for telecoms in the 90s: new capacity and services at practically no higher cost. As a partner to utilities, we recognise that today we can only see the peak of the iceberg in the overall business and its potential.”

Great cost-benefit
For Luusua, the benefits to end-consumers are clear. Smart-metering in particular – which is already being rolled out in parts of Europe – means households can get more information from the utility to optimise their consumption. It also enables utility companies to monitor and control peak loads in the network more efficiently and with less waste. Another emerging trend is end-consumers producing some of their own energy with solar panels and wind turbines. They can sell that energy back to the grid and reap great financial rewards. A smart grid would be able to quantify this addition and make efficient use of it.

“When the intelligent aspect is added, the network will be more easily remotely controlled; there will be more sensors that will monitor the network as it will be online all the time,” explains Luusua. “It has been exciting to notice that some key elements to control the networks have been missing. Eltel is now introducing them after successful proof-of-concept installations. The network will be able to give out more information about the difference between the low and medium volt networks, and that means utilities will be able to manage and operate the network in a more efficient way.” The company’s clever way of doing business – by combining their expertise in different fields into one big service – has been tremendously successful so far. It is divided into different business lines.

“We are a very specialised company,” explains Hjärne. “We have a unique way of running the company that we call ‘the Eltel Way’, and that affects the way we organise the company, and the very defined ways that we report and follow up the business. We have collected best practice information from all the different countries and departments where we operate, and we have implemented this best practice guide all over. All the time, we know we are offering the best services we possibly can to our customers.”

Eltel is already the number one player in its field in Poland, and the Baltic and Nordic countries, and is hoping to grow its business in Germany and the UK. “In five years time, I expect Eltel to be the most reliable intranet company in Europe,” says Hjärne, “and expect we will be known for quality, innovation and proactivity, and will employ a lot of empowered people all over Europe.”