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TDM to IP/MPLS: Next-gen utility networks
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TDM to IP/MPLS: Next-gen utility networks

Jonathan Spencer Jones
Posted on: 14 April 2026

Exploring how utilities migrate from legacy TDM to IP/MPLS networks through utility expert insights.

Credit: Getty Images
Credit: Getty Images

As utilities modernise their networks to support smart metering and the smart grid, IP/MPLS has become the go-to solution for reliable, flexible, and scalable network services, a technology that has evolved since the early 2000s.

Since then, utilities have been transitioning away from legacy TDM-based digital and optical networks such as SDH and SONET in favour of IP/MPLS with the urgency growing with the need for grid modernisation and the advance of digitalisation and initiatives such as substation and distribution automation.

This enables IP/MPLS to form the foundation of the smart grid architecture, with the reliable communications and end-to-end service consistency it enables essential to meeting the application requirements.

In particular for DSOs, for which in the past the communications coverage was minimal across most of their MV and LV territories but now are becoming active network operators, the need is particularly great.

An early pioneer in Europe in this transition as far back as 2004 was Iberdrola in Spain. Alberto Sendin, Head of Telecommunications at Iberdrola Spain, recalls the need to start exploring solutions to address the growing number of Ethernet and IP interfaces then coming onto the system with one of the main ‘customers’ the company’s IT department.

"At the time we were running a frame relay network and engaged with the new generation SDH and so it was natural to combine the MPLS network.”

He adds that there was also the general feeling that the legacy interfaces were obsoleting – an issue that Clinton Struth, Principal Engineer at Canadian network provider SCI Networks, highlights as a top driver facing utilities in the US at the time and one that should continue to be borne in mind as those still in the field continue to age and unable to be replaced.

Continues Struth: “Another was the ability to put all the IP type services on a single platform.”

IP/MPLS challenges and applications

Almost two decades on, the number and complexity of these services has grown, demanding greater bandwidth, improved reliability and manageability and deeper levels of security – all of which IP/MPLS can provide, along with features such as the ability to provide transmission over different transport technologies and to scale to meet future demands.

The skills requirements for these, particularly pertaining to digitalisation, are a common problem in the energy sector and need to be considered in an IP/MPLS implementation.

But an area that may be forgotten is those in the utility for whom a new system may bring changes to their working environment.

Gregory Muller, Network Administrator at Creos Luxembourg, says there is a need to be empathetic of those who may be afraid of change and pedagogic to smooth the migration.

“This is important because even in this era of automation and AI we are still working with many serial devices and legacy protocols and so have to explain the need to migrate when something is still working – and that also adds to the time [the implementation] takes.”

Full implementation also can be staggered. For example, Struth says in his experience in the US, there are a number of services such as teleprotection on layer two but many of the previously deployed layer two services are now evolving to layer three.

That experience is also broadly similar at both Iberdrola and Creos. For example, Sendin says that at Iberdrola the aim is to “keep simple, i.e. to retain layer two where possible, but if not practical for scalability to go to layer three.”

Similarly, at Creos, the majority of services are still on layer two.

87L evolution

Looking ahead, a key consideration for new implementers is around current differential protection, which has been progressively implemented over the past decade, and in particular line differential protection (87L) and its potential evolution.

Commenting on the situation in North America, Struth says that in practical terms with the number of relays deployed it would take decades for those to be upgraded to Ethernet transport. However, utilities deploying new relays and protective devices generally are looking to go Ethernet-based as much as possible.

“We have utilities in North America actively deploying 87L on Ethernet and I think it’s the logistics of the protection schemes and the timeline with which those assets are upgraded that will limit the speed of moving to a whole packet network.”

Muller says work is underway at Creos to move to 87L via packet over the next 10 to 15 years, anticipating that the process should be quite smooth, given the trust established with the earlier migration with circuit emulation.

Conversely at Iberdrola, the shift of 87L is not currently a priority and would likely occur with a major primary substation project.

Pointing to IP/MPLS as the ecosystem in which Iberdrola feels it fits best, Sendin says: “It’s not just a project one puts in the field but it has enabled us to start small and to continue to evolve.”

Overall, a timeline of at least 10 years is envisaged before 87L becomes fully packet-based.

Network and service management

With the move to a new network all of the services such as SCADA and voice go on to it but it has to be managed, and this is a key factor for deployers.

“For Iberdrola it was one of the main factors,” Sendin says, while Muller highlights the centralisation and automation it brings.

Struth expands referencing two evolutions that have occurred – the emergence of what is effectively a communications control centre separate from the network control centre and the availability of operational statistics that has improved the management and operation of the communications network.

“There’s a whole lot of business process efficiencies that have emerged,” he concludes.

As digitalisation advances in the energy sector the need for a reliable future-proof communications backbone is essential. Underlying this is a detailed insight on the strategic direction of the utility, including the technologies being deployed, the services being offered, the skillsets to support these and the engagement with customers, and the opportunity to share and learn from the experiences of utility peers.

Watch the webinar on this topic: Utilities share their experiences with TDM-to-IP/MPLS migration

Interesting read: Modernising utility networks: Why IP/MPLS is the future

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