Top five trends to shape the European smart gas metering market

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How has COVID-19 affected the Italian and European smart gas metering market and how will the market evolve post-pandemic? Max Ambrosi and Francesco Fortuna, representatives from Pietro Fiorentini, share their insights in this exclusive interview with Smart Energy International.

Max Ambrosi, portfolio leader downstream and retail and Francesco Fortuna, Europe’s regional sales manager, both at Italian-based multinational energy metering solutions company Pietro Fiorentini, presented the top five trends that are likely to shape the European smart gas metering market in the next five years.

Smart gas metering market trends

1. Increase in smart meter installations

With the COVID-19 pandemic having caused many smart gas meter rollout projects to be postponed, the number of installations is expected to rise extensively post-pandemic as companies rally to meet installation targets set by both the government and the European Commission, according to Fortuna.

In Italy alone, Fortuna expects gas utilities to pull up their rollout sleeves as the companies seek to equip all of their customers with smart meters. The increase will be driven by the regulatory pressure coming from state and regional governments. For instance, the EU Directive for gas companies to install smart metering under efforts to improve consumer energy efficiency and to optimise the management of grid networks. The EU Directive follows successful and ongoing smart electricity meter rollouts in Europe in which energy companies are recording massive consumer energy savings. Italy has to date equipped 19% of electricity customers with smart meters, according to Ambrosi.

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The Government of Italy through the National Regulatory Authority for Electricity, Gas and Water had set a target that 60% of residential gas meters and 100% of industrial gas meters should be smart by 2020. However, the target has not been met due to a number of disruptions such as the lack of funding and delays in infrastructure development, according to research firm ResearchandMarkets. Despite the failure by Italy to meet its rollout targets, a number of utility companies have equipped a significant number of their customers since deployment was initiated in 2014. For instance, Italgas after investing $665 million in smart meter rollout installed 2 million units at the end of 2017.

In addition, an increase in funding for smart meter rollout projects from both the government and local and international lending institutions is expected to drive the market. In July 2017, the European Investment Bank provided a $600 million loan to support the smart metering rollout for residential users. Such lendings are expected to increase as the need for digital transformation for utilities intensifies.

Fortuna said the need by Italian utilities to ensure accurate billing will drive them to install smart meters. He said a handful of utilities in Italy access consumer energy usage data once every six months due to the manual meter reading process, resulting in estimated billing. With smart meters, energy companies will be able to access consumer energy usage data in real-time.

2. Consumer awareness of smart meter benefits to increase

As more and more smart meters are installed and benefits recorded. Fiorentini expects consumer awareness of smart metering to improve. The lack of knowledge around the benefits of digital meters by customers is one hurdle that has crippled installations over the past years. However, this is expected to change as utilities deploy a wide range of customer engagement and awareness tools and programmes. By improving consumer knowledge on how to leverage smart meters, utilities will also improve customer services and energy savings. Informed customers with smart meters save 34% more energy than uninformed customers, said Fortuna.

3. Digitalisation to intensify

Innovation of existing smart meter technologies is expected to intensify resulting in the introduction of new and innovative solutions, standards, and devices. For instance, Francesco Fortuna says he expects new smart meter use cases such as gas prepayment and automatic notifications to be introduced.

As more and more intelligent devices and digital technologies are integrated with the grid, the risks for energy companies to cyberattacks are also expected to increase hence the need for utilities to up their cybersecurity frameworks. During a cybersecurity assessment conducted in the pilot with Portuguese gas distribution system operator Galp Gás Natural Distribuição (GGND), Fiorentini and Terranova Software identified a number of vulnerabilities. The pilot resulted in GGND defining a set of technical measures and security policies in order to mitigate the risks added by each vulnerability detected. Such collaborations between energy and technology companies are expected to continue over the coming years as the industries tackle cyber dangers digitalisation is bringing.

4. New smart meter communication technologies

To date, the majority of projects in Italy utilise RF 169 MHz networks owing to their ability to use less energy over specifications such as GPR. However, Fortuna expects this to change as NB-IoT will become the standard for smart meter rollouts in the coming years. This is owing to NB-IoT’s higher penetration and ability to provide long-range connectivity.

Fortuna also expects the introduction of 5G to generate new opportunities within the communications and smart metering sectors. He said 5G will result in secure and fast smart meter data telemetry and the introduction of new use cases associated with smart cities.

5. The introduction of smart energy meters

With hydrogen emerging as a vital solution capable of helping Europe to meet decarbonisation goals, there is an expected increase in utilities leveraging existing gas infrastructure to distribute hydrogen to consumers.

This will also require new 100% hydrogen smart meters to be developed and introduced. Smart gas meters currently on the market are able to measure gas when they contain 10% hydrogen. Research and development projects currently underway are aiming to extend the value to be able to measure gas when blended and containing 20% hydrogen. 100% hydrogen gas meters are anticipated to be available on the market by 2022.

Fiorentini is one of the meter companies working with the UK government under the Hy4Heat project to develop 100% hydrogen meters. Fortuna reiterated his belief that the number of static meters on the market will increase over the five years.

Pietro Fiorentini is active in a number of both large and pilot-scale smart gas metering projects in Europe, including one with GGND in which the companies tested the use of Narrowband Internet of Things (NB-IoT) for smart meter data telemetry, some cybersecurity elements and the ability of smart meters to enhance energy billing, improve consumer gas efficiency, as well as to reduce non-revenue energy and combat energy theft. For the project, Fiorentini provided the smart meters, whilst telco NOS Comunicações supplied a communications network and Terranova Software was responsible for meter data management. The pilot was kickstarted in 2019, lasted for a period of 12 months, and included some 100 non-residential consumers.

With Italian gas distributor, RetiPiù in the LIFE 13 Green Gas Network project, Fiorentini is demonstrating the effectiveness of smart gas metering in improving the overall management of the grid and in reducing leaks and greenhouse gas emissions.