By John PetersIn May, the UK’s Department for Energy and Climate Change (DECC) announced that the roll out of smart meters in 30 million UK homes will now be delayed for more than a year, with the first stage starting in autumn 2015.
The original deadline of a 2014 for the start of the roll out was regarded by many as ambitious. There were concerns with the challenging timescales and that there were uncertainties in several areas including the technical specifications and the regulatory framework, which included issues around consumer engagement and protection.
The delay is good news for the industry as suppliers have more time to get things right and solve the complex technical and business issues involved in the programme. Whilst many key programme milestones have been met, there are still other elements not yet in place.
The move to smart meters in the UK is being billed as the single biggest revolution in energy use since the natural gas conversion the 1970s. The rollout is a prime opportunity for suppliers to win new customers and build trust. However, there is a lot to get right and much at stake.
The onus is firmly on suppliers to move seamlessly from the current foundation stage to the rollout and delivery phase in 2015. Some companies have chosen to get ahead of the pack by rolling out smart meters in the foundation stage. However, the majority are still gearing up their supply chains and system capabilities for large scale rollout and they have a great deal to consider and plan.
For them, the road ahead will not be without risks. The UK energy market is highly complex and unlike many countries around the world, it is supplier-led and subject to competition. There are many providers involved in all aspects of the market including meter agents and meter and communications equipment vendors. Even with a year’s grace, suppliers will soon need to ramp up and train their field force, finance new assets and ensure their technology is compatible with approved specifications.
Now is a good time for suppliers to be considering their rollout strategies need to ensure they work with the right strategic vendors, comply with standards specified by government, engage credible partners with robust technologies and ensure their business can scale up for rollout – both in financial and logistical terms. They also have to meet new licence conditions that stimulate progress towards delivery whilst protecting consumer interests, and set about delivering ‘change of supply’ market operations in the new smart world.
Currently consumer awareness and engagement with smart meters is low and suppliers will have their work cut out getting customers on side for this mammoth endeavour. A survey from the Department of Energy and Climate Change last year revealed that whilst almost half of people in the UK had heard of smart meters, three quarters knew little or nothing about them. The industry needs to get the implementation process right or suppliers risk a potential customer backlash that has the potential to derail the process.
SMART PROCUREMENT – THE CHALLENGES AHEAD
One of the key challenges for suppliers is the fact the market is new, with many providers, competing technologies and solutions that are untested and haven’t been delivered before on this scale or in the particular configuration that is required.
This is further complicated by the fact that in the UK the smart metering system is constituted of several components: the electricity meter, gas meter, in-home display, and a communications module, all of which need to be interoperable and which may be the responsibility of different providers.
The metering market has been predominantly a commodity procurement process, with companies selecting assets that are fit for purpose with a long life in order to maximise return on investment. Smart metering has turned that model on its head.
Smart meter technology is evolving continuously so suppliers have to decide which technology suppliers to work with now and ensure the technology complies with government standards.
They will have a choice of technology partners to work with. There are plenty of new technology suppliers emerging alongside companies that have a track record in the legacy world of metering. Due diligence and testing will be of paramount importance in both cases as the smart metering technology is new. If suppliers work with smaller, start-up companies they may wish to consider producing innovative commercial agreements that drive down prices, secure production and provide themselves with adequate protection from any risks.
Ultimately, suppliers should look to partner with companies that can deliver genuine value – whether that is in the short term complying with a requirement for simple meter reads or in the longer term, providing the infrastructure for future services, including smart grid benefits.
GOVERNMENT MANDATES – THE INTEROPERABILITY CHALLENGES
Unlike many other countries where smart meters have been rolled out, the UK government is centralizing its approach, adding a layer of complexity for suppliers by mandating the communications, data and central coordination body they need to interact with. Most countries have had far less structure imposed upon them, so it is arguably more complex for suppliers in the UK. This centralization enables the key industry processes to operate from a single body and will facilitate change of supply and commercial interoperability.
In a few months’ time, the government will be awarding a licence to a data and communications company (DCC). The DCC will manage the data service provider and communications services provider. These provide the core services that allow meter data to get from the home to the bill. Suppliers will need to ensure their smart metering systems work seamlessly with these providers.
The government’s central programme has put considerable focus on the DECC Smart Meter Equipment Technical Specifications (SMETS). SMETS set out the requirements and functions of each element of the smart metering system which suppliers’ vendors will need to comply with. SMETS cover all components of the smart metering system and give all involved a stable baseline against which to procure their smart metering system.
The publication of SMETS is happening in two stages with the first published version SMETS 1 for meters deployed during the foundation stage. This specification is firm and can be used for procurement today. However, the second version, SMETS 2, is not yet ratified. This will be a much more detailed version for use in the full rollout. It will include a richer companion specification that sets out how solution providers must deliver their products to help meet the technical interoperability challenge – where different vendors’ equipment must work with each other’s.
Another factor to consider is the financing of the smart metering equipment. Most energy suppliers will seek to keep the costs of smart meters off their balance sheets and rent the assets from an asset financier, often referred to as a meter asset provider (MAP). In the procurement stage, suppliers have just as much at stake getting the right commercial financing as they do in getting the best price for the meter itself.
The communications service providers (CSPs), who are responsible for the core communication network for smart meters, will be procuring the communications hub – the device that links the smart metering system to the wide area network so that data can be sent to and from the DCC. Suppliers will need to procure all other components of the smart metering system including the smart meters and in home displays and make sure they work with whatever communications hub the CSP provides.
Each supplier has a different appetite for risk which is determining when they are choosing to roll out. Some have continued with their early smart meter rollouts while others prefer to wait for the vendor landscape to become clearer. With the selection of the DCC, data communications and communications services providers, and the approval of the second version of SMETS expected soon, these barriers are set to be removed. This will clear the way for supplier procurement to clarify exactly what they need for their supply chain.
FIELD FORCE ENABLERS
Another key consideration is ensuring a field force is in place, with people who are fully competent and trained in implementation of each element of the smart metering system and ready to go in time for rollout. Fitters of legacy meters have typically specialized in either electricity or gas, but for the smart meter rollout, meter fitters will probably need to be dual fuel trained (both gas and electricity) in addition to understanding the multifaceted communications of the smart metering system. They will also need skills to engage with customers to explain how the in-home display works and what the data means.
All field staff must comply with a government mandated code that sets out the rules suppliers must follow when they install smart meters, and how they treat customers to ensure the best possible service levels during their transition to smart meters.
Through an Ofgem licence condition, all suppliers will need to adhere to the guidelines ensuring that the customer experience throughout the smart metering installation process is favourable. The code will apply to both domestic and industrial installations and will be monitored and regulated by Ofgem. Suppliers will therefore need to ensure that all meter installers are trained in time for rollout and that they comply with the rigorous standards laid out in the code.
Suppliers thus need to ramp up their meter installation capability to meet the rollout schedule. They will also need to manage the impact of recruiting a large number of people into their business, considering that all suppliers will be doing the same, avoiding a resource vacuum in the process. All these challenges will be particularly hard for smaller suppliers and could even prove a barrier to them getting up and running in time for 2015, especially procuring field assets ahead of time such as the high volumes of vans and other ancillary equipment needed to fit meters. In the current economic climate, securing finance is tough and this aspect will also prove particularly challenging.
The delivery risks of the programme are also high. New technologies need integrating with new systems and need to be operated by new recruits who require training. Getting the volumes right will be a worry for suppliers large and small and financing the operation will be hard for smaller suppliers. The smearing of costs across a larger customer base will make the transition easier for the larger suppliers, but delivering change can sometimes be easier in a smaller organisation. Not all aspects can and will be done at once. Different retailers will take different approaches – some will go early and others who might be more risk adverse will go later – there are pros and cons of each approach.
Equally, every procurement strategy will be different. Every company has its own business drivers, its individual attitudes to risk, different technologies in place and existing relationships with suppliers. There is not one procurement strategy that will work for everyone. Our advice would be for suppliers to carefully consider all elements of the procurement cycle and select suppliers based on their credibility, innovation, future proofing, price and logistical fit.
We are currently working with several suppliers on their procurement strategies and one piece of advice we would offer is that it takes longer than anticipated. A successful procurement cycle will take around 12 months from start to finish including time for testing solutions, which is of paramount importance.
Whilst the industry now has a year longer to address these procurement challenges and educate consumers about smart meters, there is still a great deal for suppliers to plan and get right. Now is the time for them to assess their supply chains and ensure they make the right procurement decisions that will ensure their smart metering roll out in 2015 is a success.
The seven projects are as follows.
Electricity North West Limited is requesting £10.9 million for the CLASS (Customer Led Ancillary Services Support) project, which is aimed to demonstrate the provision of ancillary services automatically or on request by innovative management of the high voltage distribution network.
[img:TMcClung_0.jpg| ]Interview with Tommy McClung, Deputy Assistant Director, City of Houston Public Works and Engineering
By Neil Borthwick, Smart Energy International Account Manager: North America
Could you please start by telling us about your role at the utility?
The branch I represent is Utility Customer Service (UCS) and it is the billing arm of the utility, which is assigned in the City of Houston to Public Works and Engineering Department.
This branch (UCS) includes the metering component of the distribution system as well as system integrity inspectors, the call center for customer billing and all of the ancillary support functions to core services. It’s a pretty extensive operation with approximately 380 people serving 2.2 million people across the city. Water customers directly make up a population of about 500,000.
Could you give us a brief overview of the utility in terms of metering?
The City of Houston was an early adopter for automated meter reading (AMR) technology. The effort began back in 1995-96 with installations beginning around 1999. We were the first major metro area to adopt AMR technology into the water pit environment.
As our technology began to age we wanted to move into newer more value added areas. Specifically, we wanted to leverage the existing investment while advancing our capabilities. So, we conducted an internal pilot to determine if we could introduce a fixed network in our AMR system using the current infrastructure, which consists of low power output end points. The pilot was very successful
What we are now exploring how we can introduce long range capabilities with possible migration to two-way communication using the WiMax network being built. Our long range goal is to have the meter end points talking directly to the WiMax cloud. The industry doesn’t support this concept yet, but it is where we are going.
GIS is an important component to our billing enhancements and customer value add services efforts. In example, through an academic study on the use of GIS to determine loss in segments of the city, we were able to take consumption points and geocode them, then use hydraulic modeling to check flow into those areas. We used this information to then calculate differences and see where losses were in very specific areas.
All of these examples are the real world and GIS tools are principal. They have been especially helpful with our efforts in standing up the new street and drainage charge.
What is the drainage charge?
The drainage charge is not new to many municipalities but it is to the City of Houston. It is associated with the cost of service to provide infrastructure support to streets and storm water drainage. It’s not really related to metering as there is no meter component, but as we represent the billing part of the Public Works and Engineering Department, this is a major undertaking for us.
The drainage charge ties back to metering via the GIS implementation and corresponding technologies we’re building around that. These technologies will help support the metering concepts and other technology advancements that we want to pursue, such as pressure sensing, leak detection, etc.
Are you working with multiple technology providers and/or contractors?
We are using multiple vendors and multiple technologies and we are integrating them through a service oriented architecture concept.
The predominant AMR technology that we have is from Itron. Another one we use is Badger, and we are going to be introducing other vendors. One of the concepts I believe in acquisition is the need to have multiple vendors to create competitive balance and improved advancements such as interoperability and industry standards.
My experience tells me standards are very important. There is a lack of standards in the newer technologies being used in water metering business and we need to overcome this. Questions that come to mind are; how do we make sure that all the metering devices are as accurate at low flow as they are at mid to high flow? And what about the end points themselves, why can’t we plug-and-play them into our systems? These are the kind of questions that come to my mind and are a part of what we are trying to challenge through our efforts in the City of Houston.
I asked as I have met with water utilities that have hired contractors who don’t even know what meters are being installed…
My own observation of the circumstances surrounding your question is that most water utilities are related to governmental bodies that typically do not have the resources to drill into the mundane detail of acquisition, standards, etc. It is very difficult even with the City of Houston to have the time, energy and resources to address the finer points that would lead to better acquisition. To give an example, an AMR investment is in radio technology, but do municipalities have access to radio engineers so that their investment is protected?
Most water utilities need a plug-and-play installation: Bring in a contractor to put in a system and tell me it works. If I write my contract well enough then all I have to do is to manage the contractor. The effect of this particular approach is that the industry vendors control the output, not the utility. Now I fundamentally disagree with this approach. I feel the first thing a vendor should ask is “What is it that you need?” It took two years to get the vendors that dealt with us to ask that question. There needs to be a paradigm shift in the utility-relationship, the utilities need to step forward and become the leaders.
What steps and plans have you taken towards implementing AMI and what do you see as the key benefits?
I feel like we may step over the typical AMI implementation, if we successfully get to the point I mentioned earlier our end points will speak directly to the WiMax cloud.
We are clearly at one-way communication right now. Through data acquisition, mapping and analysis you can replicate some of the benefits from two-way communication. Creating enough data points allows for analysis that is similar to those from two-way communications. So it is mainly about data management, how you keep all this data and how you put it all together in a usable format.
What meter data management system are you running?
We have created our own data warehouse, and are building our analytics around that in-house development. We are still in an exploratory period right now, trying to look at how we’re going to bring this to fruition. We have not invested in a meter data management application directly.
So right now what we’re doing is taking the data and centralizing our data warehouse across the department. We will ultimately look at every parcel in the city, cradle to grave. Looking at it that way, regardless of data source, you get a full picture of your universe. That is what we’re working towards.
You mentioned that the fixed network has shown a lot of functionality …
Functionality or reliability has been very good. The strategy we have taken through the migration is of balancing expectations. As I mentioned we have a 640 square mile environment with mobile AMR and we have made a significant monetary investment that we couldn’t just take out and replace, so we have had to go in with proper expectations as to what we might expect in terms of functionality and reliability. We look at our effort as an incremental migration path.
What initiatives have or are you undertaking to engage your customers?
One of the things we are doing is enhancing our customer information systems. We are in that process right now with the implementation of the drainage charge. We’re working to establish a more dynamic store front with the web and provide as much value add as we can to the customer. As an example, we are working on predictive capacity that allows us to communicate back and forth if we see irregular consumption patterns
Another concept we are working to implement is to get ahead of the bill. Currently the bill triggers all of our activity. With the information that we’re gaining through the fixed network, we have enough information before the bill goes out to make the bill become a substantiation of the work effort – in other words, here is the work we’ve done, we know this information is correct, and this is what you owe the utility. That is going to come from the data management that we’ve been talking about.
What has been the response since you implemented the fixed network?
What has really helped is analyzing irregular consumption. Most of us as consumers have no idea what’s going on, we just get a bill and then pay it. All of a sudden the bill comes in and it’s more than what you budget. Then when you call up our customer service rep and they look at the fixed network data they are able to say “From midnight to 3 ’o clock in the morning on these days we are seeing a lot of consumption, did you have any visitors? Do you have teenagers? Do you have a toilet running? Do you whatever?” and it enables them drill down on what actually occurred and why the consumption might be high. That is the biggest thing I’ve seen.
Are customers able to view their water consumption online?
Soon. That’s where we are heading, but we are not there yet. Specifically our target is to provide that as a value add for our large meter customers, the business and commercial enterprises as well as the customers on the fixed network. A lot of the customers want to be able to see their consumption patterns.
The technology that we are putting into place now under drainage, with more geospatial understanding and more data management capability, will enable us to present the information more readily to the customer.
Have you had any issues with customers over higher bills?
Not related directly to AMR. We see as many do the exceptions that surface and the work processes in place address those issues. Some of the concerns we expected were dealt with up front. For example, we did a sampling of some older meter technology and found that we were running on about 85% accuracy on those meters. We initiated a large meter change out project, and as part of that we began to meet with building owner representatives to talk about the possible issues with this. We anticipated a 15% increase in accuracy and we communicated this before the bill arrived. We needed to be sure they were prepared for the change.
Through that effort we’ve created a working group to help develop customer profiles on these large meter accounts so we can create more one-on-one relationships with them. Again, this is an example of the value add we are working to bring back to the customers of the water utility in Houston.
Are there any new services you are planning to offer your customers?
We’re looking to use the data points and provide predictive data capacity to identify irregular consumption patterns. This will be used to better inform customers that we notice your consumption is high over the last couple of days, you might want to take a look. These types of efforts I think are pretty standard across the utilities.
Have you had any interaction with the electric utility on AMI and sharing information?
We started a dialogue with them about a year ago. The electric metering company responsible for the infrastructure here is CenterPoint and they have a pretty sophisticated program that’s underway, with similar WiMax backhaul to ours.
They are using the Itron technology as well…
They are, and we hope that there’ll be more integrated efforts going forward. At this point there is not a lot of active involvement. There are some relationships that have been developed, some opportunities to share technology. I know that they have a really interesting technology lab that sometime we would like to get over to take a look at and see if we can put up something similar here.
To sum up and close on, what is the vision for your utility?
Our vision is to become the customer centric billing arm of the City of Houston’s Public Works and Engineering water utility. We want to assist integration of data points from across the Department to create a cradle to grave view of all parcels in the city. In this pursuit, we recognize our role and feel we have a lot of the technology foundation that can help establish this vision.
The City of Houston Public Works and Engineering is a host utility of the Metering America Water Meter Summit taking place April 18-20, 2011 in Dallas, TX. Tommy McClung will be talking on integrating GIS and AMR technologies to improve water billing on April 20.
Product/Service: The proposed EUR 43.5 million Project to be funded by a EUR 35 million EBRD loan, together EUR 8.5 million from EPCG own funds, forms part of EPCG’s overall investment plan for its distribution network. The Project has five main components:
(1) The supply of smart meters and data concentrators for internal control points in the transformer substations (10kV/0.4 kV) and for residential consumers; (2) Installation of meters and supply of associated ancillary equipment for the LV network, with remote reading and remote disconnection capabilities; (3) ancillary equipment including modems, meter boxes, cabling, and other auxiliary equipment necessary for the installation and operation of the meters in substations. (4) the PIU consultants (the subject of this procurement); (5) Software and meter management system.
Closing Date: November 25, 2010
Reference: TRAD 1897
Commission]Windsor, ON, Canada --- (METERING.COM) --- August 17, 2010
The City of Windsor is expected to be one of the first municipalities in Ontario to connect its water and waste water facilities to the province’s smart grid services.
In a pilot project being managed by energy solution provider Sempa Power, the City of Windsor will connect its municipal water resources to Sempa’s ancillary services network (ASN), which will enable Ontario’s Independent Electricity System Operator (IESO) to introduce greater flexibility and efficiency across the province’s grid. The City of Windsor will benefit financially by utilizing the inherent capacity available in those resources to provide the IESO with ancillary services.
The project will demonstrate the technical and financial benefits of using a containerized energy storage, conversion and management system to provide grid ancillary services as well as power management to help smooth the plant output.
The first collaboration will come in the form of a pilot project designed to demonstrate the capacity for water systems to provide demand based ancillary services, such as system regulation, to Ontario's Independent Electricity System Operator (IESO).
Commissioner] Washington, DC, U.S.A. --- (METERING.COM) --- September 10, 2007 - Demand response and advanced metering programs have grown significantly in the U.S. over the past year, according to a new Federal Energy Regulatory Commission (FERC) report.
Several states and individual utilities took actions to introduce more opportunities for demand response and price responsiveness, including the adoption of time-based rates and the adoption of demand response policies – and in the last year utilities announced new deployments of more than 40 million advanced meters between 2007 and 2010.
The report, “Assessment of Demand Response and Advanced Metering 2007,” updates a report of the same name published in August 2006, which contained a comprehensive nationwide survey of these activities, and has been prepared as a requirement of the Energy Policy Act of 2005 (EPAct 2005).
The report notes that demand reduction activities occur principally during the summer when electricity demand is highest in most regions, and that demand reductions from the demand response activities during the record-setting peaks that occurred in July and August of 2006 proved crucial to the reliable operation of electric markets, lowering system peaks between an estimated 1.4 and 4.1 percent on these peak days.
The report says that two important new developments over the past year at the wholesale level were the inclusion of demand resources in forward capacity markets and ancillary services markets at Regional Transmission Organizations (RTO) and Independent System Operators (ISO) and the development of new reliability-based demand response programs. The Commission actively encouraged organized wholesale power markets to use demand response as they would use generation where it is technically capable. It also addressed demand response in a number of orders addressing wholesale market design proposals filed by the various RTOs and ISOs.
Another trend highlighted in the report is that there was more attention to the development of a smart grid that can facilitate demand response. Moreover there was increased activity by third parties to aggregate retail demand response.
On advanced metering, the report notes the rise in the number of large utilities that are planning to install advanced metering in the next several years, and that several states have taken actions ranging from the approval of smart meter projects or advanced meter deployment and re-establishing collaborative efforts and workshops to issuing rulemakings.
AMI market activity, as measured by the number of meters planned or installed, increased nearly threefold from 2005 to 2006, and is projected to double again by 2008.
However, a number of issues and challenges remain, including technological obsolescence concerns, deployment decisions and interoperability and open standards.
Commenting on the report, Commissioner Jon Wellinghoff, who is leading the Commission’s efforts in the Collaborative Dialogue on Demand Response with the National Association of Regulatory Utility Commissioners, said: “The findings signal that there has been a change in the national demand response dialogue from should we do it, to how we do it.”
CVC Capital Partners has sold its stake in ista International to Charterhouse Capital Partners after CVC acquired ista in a management buy-out in June 2003.
ista is a global leader in the area of submetering and billing of energy, water and ancillary costs. The company is active in 24 countries across Europe, North America and Asia. Sales increased under CVC’s ownership from approximately €460 million ($610 million) in 2002 to €600 million ($796 million) in 2006, while ista’s share of international revenues expanded from 27 per cent to almost 50 percent over the same period of time. This was primarily driven by organic growth and a number of acquisitions, both internationally and in Germany. ista’s staff increased under CVC’s ownership from 3,700 to 4,500.