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PRESS RELEASE

Cisco Outlines Strategy for Highly Secure, 'Smart Grid' Infrastructure

End-to-End Networking Solutions to Serve as Fundamental Platform for Utilities to Improve Energy Efficiency, Security and Service Innovation for Electrical Grids

SAN JOSE, Calif. - May 18, 2009 - Cisco today outlined its plan to deliver an end-to-end, highly secure network infrastructure solution that helps utility companies and their customers manage power supplies and energy consumption more efficiently.

Cisco's plan establishes a complete communications fabric from electrical generation to business and the home based on Internet-Protocol standards. This will build intelligence, resiliency and two-way communications into an electricity distribution system that has been traditionally fragmented. Cisco®'s Smart Grid solutions will address critical points within the energy infrastructure: from data centers and substations, through neighborhood-area networks, to businesses and homes. The company'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 innovative end-user services.

Cisco has already begun sharing its networking expertise with leading utility providers around the world and is building innovative network solutions for them and their customers to monitor electricity utilization, optimize energy delivery, reduce energy usage and cost, improve system security, and lessen their impact on the environment. In the months to come, Cisco plans to deliver products and additional services to support this initiative - one that is aimed squarely at addressing the growing Smart Grid communications infrastructure market projected by Cisco to reach $20 billion annually over five years.

Facts/Highlights:

Cisco's end-to-end strategy for a secure, intelligent electrical system will deliver benefits for utilities, businesses and consumers as well as mitigate environmental impact:

  • Electricity outages cost U.S. industry about $50 billion per year, according to EPRI (Electrical Power Research Institute). A Smart Grid will significantly reduce the impact of these outages in the future and will also reduce U.S. greenhouse gas emissions equivalent to 60 to 211 million metric tons of CO2 annually in 2030, according to EPRI estimates.
  • Various pilots including one sponsored by the U.S. Department of Energy's Pacific Northwest Laboratory have shown a 10-15 percent reduction in household energy consumption when Smart Grid technologies are used.
  • The GridWise Alliance, of which Cisco is a member, estimates that Smart Grid incentives and investments as encouraged by the American Recovery and Reinvestment Act of 2009, will generate approximately 280,000 direct jobs across various categories.

Cisco will deliver Smart Grid solutions for service innovation and grid optimization that impact the entire spectrum of an energy infrastructure from power generation to businesses and homes:

  • Secure, resilient and remotely managed Transmission & Distribution Automation solutions will optimize grid management and cost. Cisco Switches and Routers are standards-based platforms designed to bring intelligence, security and efficiency to large and small electricity substations.
  • Cisco will provide solutions for efficient, IP-based backhaul communications for smart meters that will integrate proprietary solutions into the overall smart grid platform.
  • Cisco's Home Energy Management and Business Energy Management solutions will help optimize energy demand, use and cost by providing greater access to data and analysis tools. Cisco EnergyWise solutions, announced in January '09, will be the basis for Business Energy Management, enabling business customers to use their network as the platform to optimize power throughout their operations and real estate.
  • According to Carnegie Mellon University and other leading research centers, 49% of cyber security threats to the electrical infrastructure initiate from breaches of physical security. Cisco's product portfolio and leading experience in both physical and cyber security is helping leading organizations create a Secure Architecture for Energy. This comprehensive and converged approach results in reduced operating costs and improved cyber security for critical infrastructure.
  • Cisco's state-of-the-art, standards-based data center portfolio enables utilities to use sophisticated data collection techniques and storage solutions for power grid data analysis and subsequent optimization.
  • Cisco Lifecycle Services can offer system-level support for creating and maintaining a resilient, converged network that meets the unique operational needs of Smart Grid solutions.

To achieve its vision, Cisco will partner with systems integrators, industry vendors and utility customers to deliver solutions that evolve energy management and conservation:

  • Cisco is currently working with a number of leading utilities around the world (see supporting quotes) and recently announced its involvement in "Energy Smart Miami," a collaboration with General Electric, Florida Power & Light and Silver Spring Networks to build out the most comprehensive Smart Grid deployment in the nation for the City of Miami.
  • Cisco is also working with the City of Austin and others including the Environmental Defense Fund on the "Pecan Street Project" to make the municipality a virtual laboratory for clean energy and the nation's Smart Grid goals.

Supporting Quotes:

  • John Chambers, chairman and CEO, Cisco
  • "Networking technology will serve as the platform of a smart, more secure energy grid for the 21st century. Cisco is uniquely positioned to provide a converged Smart Grid communications fabric and to assist our utility customers with the kind of business transformation that will enable the efficient, effective transmission of energy and deliver entirely new, environmentally-friendly services to consumers."

  • Todd Arnold, SVP, Smart Grid & Customer Systems, Duke Energy
  • "Creating a smart, secure infrastructure for the 21st century is critical to the United States' energy and environmental future. We look forward to working with Cisco to build out a Smart Grid that will create jobs, improve energy efficiency and create options for consumers in the areas that we support across the Midwest and the Carolinas."

  • Lewis Hay, III, Chairman & CEO, FPL Group
  • "As the nation's No. 1 utility in energy efficiency programs, FPL is pleased to be engaged with Cisco and other innovative companies in the Energy Smart Miami initiative. Energy Smart Miami has the potential to be the most extensive and holistic smart grid implementation in the country. With Cisco and our partners, FPL will demonstrate the power of a Smart Grid for our customers across Florida and serve as a model for the rest of the nation."

  • Denis Y. DesRosiers, CIO and vice president, Information Technology and Facilities for ITC Holdings Corp.
  • "ITC believes that a secure, robust IP-based communications network is a necessary platform for all Smart Grid activities on the transmission system. Cisco has been a great partner in deploying a communications network that enables Smart Grid for ITC and its customers. When new cyber security standards were approved, Cisco's technical team helped us quickly identify an effective solution which, thanks to our IP-based network, was relatively easy to implement."

  • Livio Gallo, COO of Enel
  • "We believe that Cisco's expertise in networking technologies can help Enel drive open standards into the Smart Grid industry, creating a secure, intelligent network infrastructure necessary for end-to-end energy supply and demand management. This will bring greater choice and flexibility to consumers and is good for the environment."

  • Martin Vesper, Executive Director of Yello Strom
  • "Yello Strom is pleased to welcome Cisco and its experience in creating intelligent, large-scale networks, into the Smart Grid market. By joining with Cisco to deliver a new, secure Smart Grid to our customers, which interacts perfectly with Yello's Internet-based smart meter 'Yello Sparzähler online,' we will demonstrate our leadership in this space."

Supporting Resources:

Tags / Keywords:

Cisco, Smart Grid, Green, Sustainability, Environment, Connected Energy Management, John Chambers

RSS Feed for Cisco:

http://newsroom.cisco.com/dlls/rss.html

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

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Cisco, the Cisco logo and Cisco Systems are registered trademarks or trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and certain other countries. All other trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.

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