Following mid-January’s lifting of sanctions on Iran by the European Union, the industry has seen two deals with the Islamic Republic in quick succession.
Danish meter manufacturer Kamstrup and UK utility metering and lighting company Cyan have both made an entrance into the Islamic state, with water and traffic cameras AMI orders respectively.
In an interview with Metering & Smart Energy International, Danish Fareed, general manager of Kamstrup’s sales in the Middle East, said the Iranian AMI market is very “…open and they are very interested in listening to our recommendations.”
The Iranian government is also driving the creation of an AMI industry with the formulation of a National Smart Metering Programme (FAHAM) targeting the replacement of 33m traditional electric meters with smart meters. The original pre-sanctions deadline was set for Q4 2016.
Smart electricity meters in Iran
So what opportunity is there in the market? Cyan’s acquisition of the GBP67,000 (US$97.000) deal with Iranian telecoms contractor Micromodje for provision of 2,000 smart meter units for street traffic cameras has resulted in the solutions provider beginning talks on selling Iran another AMI solution including smart electric meters.
According to a Cyan’s spokesperson, 18.5% of electricity generated in Iran is lost through inefficient infrastructure, tampering and theft, and approximately US$100 billion per year is spent on subsidizing energy prices.
She said such a scenario requires deployment of advanced metering infrastructure to help utilities curb non-revenue electricity, maximise revenue collection as well as implement energy efficiency programs for grid reliability and efficient management.
Cyan announced that it has even engaged in applying from the UK Government Export Controls Organisation, a go ahead to deliver smart meters directly from its headquarters in the UK.
Smart meters benefits
Commenting on Cyan’s prospects to increase its footprint in the country’s smart metering market, Babak Goldouzian, managing director of Micromodje, said: “Cyan’s capability has been optimised for emerging regions, enabling these markets to address a number of challenges driven by rapid growth and the demand for energy.”
Fareed added that the utilities “see the benefits that smart metering solutions can bring to the operation of the country’s energy infrastructure and the management of its water resources. Not to mention to their own businesses, communities and to the environment.”
He said with the coming out of tenders that require smart meters, will most definitely see a gradual move towards smart metering over the next five years.
AMI market preparation
Besides the entrance of Kamstrup and Cyan after lifting of sanctions in Iran, other technology providers have shown interest in entering and improving the region’s water and electricity landscape through deployment of AMI solutions.
In 2015, global energy management company Landis+Gyr and communications technology company Ericsson announced their partnership aiming to empower Smart Metering and Smart Grid projects in the Middle East including Iran.
Under the partnership, Landis+Gyr and Ericsson agreed will help utilities in the middle east have access to smart meters big data in order to employ energy efficiency programs and increased customer satisfaction.
Rafiah Ibrahim, president of Ericsson in the Middle East and East Africa, said: “Mobility and connectivity is driving the transformation to the Networked Society in the Middle East, and cities across the region are aware now – more than ever – of the importance of sustainability.
“In partnership with Landis+Gyr, we are able to deliver smart solutions to the energy sector, allowing utility companies to improve energy consumption and to use connectivity for sustainability.”
Expected AMI market growth
Global energy market research company Northeast Group forecasts that 86% of businesses and homes in the Middle- East and North Africa will have smart meters by 2022.
Northeast says countries in the MENA region will spend US$9.8bn on smart grid infrastructure including smart meters, distribution automation and smart city technology by 2024.
Ben Gardner, president of the research group said smart meters installation will reach 16.1m units by 2022.
Tavanir is the holding company responsible for management of generation, transmission and distribution of electric power in Iran.
According to the National Center for Policy Analysis, natural gas is the country’s primary fuel source to generate electricity, accounting for almost 70% of total generation in 2013.
The country has been under EU, UN and US sanctions since 1995 following the country’s refusal to suspend its uranium enrichment program.