On May 1, a team of researchers at Los Alamos National Laboratory submitted a paper that offers the potential to solve one of the smart grid’s most significant issues: Secure data exchanges between monitoring devices and central data collection servers.

On May 6, Alex Knapp, writing for Forbes online, reported the Los Alamos team’s achievement: A functional first generation quantum network “smart card” using NQC (network-centric quantum communications) that “meets the challenging simultaneous latency and security requirements of electric grid control communications, which cannot be met without compromises using conventional cryptography …” See full copy here.

The Los Alamos team’s paper stated their achievement would benefit electricity-distribution smart grids, solving a key data transmission security issue between the smart meters at the home or office location and the central server responsible for data collection.

Smart grids at present have vulnerabilities and secure data transmission is a significant one.

Nonetheless, smart grid deployment initiatives that received funding from the American Recovery and Reinvestment Act of 2009 (the stimulus program) have been progressing, and the 63 funded initiative have shown initial positive results.

It is interesting that the Los Alamos team cited smart grids as logical beneficiaries of the quantum encryption “smart-card” solution, but not surprising. When seeking to commercialize technology requiring new kinds of connected devices that are applied to existing and new infrastructure (in the case of smart grids, optical networks), the volume of devices that are produced and deployed matters. Large production quantities more quickly amortize research and development costs, leading to a faster Return on Investment. This is of critical importance to the investors and companies that decide to commercialize and produce the new quantum encrypted devices.

One example that hints at the significant volume of new quantum-encrypted smart meters (and insertable “bump-in-the-wire”2 security retrofit devices) that will be required for the conversion from manually-read to automatically-read electricity usage at the home or office, Detroit Edison, one of the DOE’s 63 funded smart grid initiative participants serving 2.1 million customers, required 625,000 new smart meters to replace manual-read meters. Each of these new meters becomes a node in the Internet of Things, and these are just the meters. Extrapolating from the Detroit example, the U.S. conversion requirement will offer compelling production quantities for companies seeking entry into the smart grid market.

As Knapp noted in his Forbes report, as the price of the components of the new quantum smart card, such as the silicon photonic chips, become cheaper as production quantities increase, and additional secure network opportunities other than the smart grid arise, the next generation of devices with quantum encryption could include tablets and smartphones.