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Modernizing Grid Communications: Why the Success of smart Cities Hinge on IoT-Enabled Smart Grids

May 22, 2025
As urbanization strains power grids, smart grids empowered by IoT offer a solution. Real-time data, two-way communication, and renewable energy integration make smart grids essential for sustainable urban development.

The world’s growing population is becoming increasingly urbanized. According to the UN, more than half of the global population lives in urban areas. For perspective, only one-third of the global population lived in urban areas in 1950 – by 20250, two-thirds of the world will live in cities. This massive influx of people to cities will significantly strain existing infrastructure, particularly power grids. Most of the electric grids in the United States were built in the 1890s. These outdated power grids are overburdened and inefficient, a problem that will only worsen with urbanization.

The solution lies with smart grids. Smart grids will be indispensable to building cities that can support growing populations. While multiple technologies empower smart grids, the most notable is The Internet of Things (IoT). Although current power grids can’t withstand the immense draw on resources and the need to transmit data to millions of consumers, IoT-enabled smart grids can.

Current power infrastructure relies on one-way communication, where power flows from the plant to the consumer. Devices, such as transformers, substations and home energy systems, also operate independently and cannot communicate with one another without human mediation. As a result, utilities receive limited feedback, and issues often go unnoticed until getting reported. On the other hand, smart grids use IoT technologies to support two-way communication, allowing data to flow between utilities and end devices in real time for faster and even automated responses to user demands across the smart grid.

The Benefits of Smart Grid Communications

Smart grids, thanks to the integration of IoT devices, have communication as a core feature. Unlike current power infrastructure, smart grids are intelligent, data-driven and responsive. Smart grids are also more energy efficient and reliable while being less wasteful. Real-time data collection and processing allow for dynamic adjustments in electricity distribution according to evolving conditions. Likewise, two-way communication between utilities and consumers supports better customer demand response management, providing people with more information about their energy usage.

Fast communication through IoT devices enables advanced applications like remote monitoring, predictive maintenance and network optimization. For example, by using IoT sensors to remotely monitor infrastructure like substations, transformers and other critical assets, utilities can detect faults and intervene before they become failures, minimizing downtime and avoiding the costly consequences of outages. Similarly, continuous communication through IoT devices provides utilities with insights into the performance of infrastructure, allowing tweaks that save money and improve operations.

Another benefit of IoT-enabled communications is that utilities can more seamlessly integrate renewable energies into the current power grid. In the past, it was difficult for utilities to embrace sustainable alternatives due to the unreliable nature of renewable energy sources like solar and wind power. But, with the real-time management capabilities of IoT, utilities can now store solar and wind distribution during off-peak hours and discharge it when demand is high to reduce the burden on the grid and decrease electricity costs.

Band 106 Standardization, 5G and 5G RedCap

Utilities ensure IoT technologies maintain continuous monitoring and control of infrastructure – like power lines, transformers, smart meters, etc. – through private, dedicated networks. Forward-thinking utilities recognize that these network connections must be future-proof and are looking to switch from older standards (like 3G and 4G) to 5G. The Band 106 (B106) standardization, as part of 3GPP Release 18, is a pivotal aspect of 5G technology adoption in private wireless networks. B106 is also instrumental in expanding the devices and chipsets required to support private wireless applications.

Nokia, in collaboration with Anterix, the largest holder of licensed spectrum in the 900 MHz band throughout the contiguous US, as well as Alaska, Hawaii and Puerto Rico, helped facilitate the standardization of B106 in North America through the first successful B106 data call. This collaboration is a major milestone in grid communication modernization and the inevitable deployment of mission-critical utility applications on 900 MHz private wireless networks. Moreover, these efforts laid the groundwork for future smart cities that will ameliorate the challenges of rapid urbanization.

Despite the advantages of 5G, some utilities are opting for a cost-effective and scalable alternative in 5G RedCap. Using 5G RedCap technology and B106, or RedCap rugged gateways, for onsite communications in electric transformer sites is a viable solution for several reasons, including the ability to support 5G's low latency and reliability. 5G RedCap technologies offer a healthy balance of performance and power efficiency. This makes them ideal for utility applications where reasonable throughput, lower complexity, scalability and cost-efficiency are urgent business needs. B106 is also advantageous for long-distance data transmission in utility networks because of its low-band frequency range.

Accelerating Grid Modernization Through Partnerships  

IoT smart grids powered by 5G or 5G RedCap networks will be essential in making the futuristic dream of smart cities a reality. Still, the journey from the outdated power infrastructure of today to these future-proof smart grids will require utilities to overcome unique commercial challenges, such as extracting data from underground transformers or achieving real-time data synchronization. To that end, many utilities are partnering with solution providers that offer cellular IoT modules and connectivity plans.

About the Author

Stan Gray

Stan Gray is SVP of IoT Broadband and High Cat Vertical Sales at Telit Cinterion.

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