On the economic benefits of software-defined networking and network slicing for smart grid communications

To ensure stable operation, Smart Grids rely on ultra-reliable, low latency communications for transmitting critical measurements and control commands. Though modern Information and Communication Technology (ICT) provides adequate means for asserting hard service guarantees, the installation, configuration and operation of corresponding infrastructures is typically very costly, involving significant administration efforts. Therefore, we propose Software-Defined Networking (SDN) to facilitate configuration and administration drastically, thus reducing expenditures. We identify technical advantages of introducing this approach to Smart Grid communication infrastructures and derive economic benefits. Numerical results for a reference power system indicate Operational Expenditures (OPEX)-driven savings that allow SDN solutions to outperform legacy networks within less than four years. Also, SDN-driven network slicing enables sharing infrastructures between critical power systems and end consumer broadband traffic, allowing for further cost reductions, while maintaining hard service guarantees. Under this paradigm, we compare the installation and operation of dedicated infrastructure by the grid operator to arranging service contracts with telecommunication network operators. This is referred to as make or buy decision. It can be deduced that a shared infrastructure, building on network slicing, provides an optimal solution for both parties.