Smart Energy International looks at the penetration of smart meters, the different communication protocols used in various regions, reasons for their adoption and some of the challenges being faced in adopting the standards.
Smart metering is widely regarded as the cornerstone for future smart grids and is currently being deployed all over the developed world, with a growing number of largescale initiatives now also being launched in developing countries.
The Asia-Pacific region constitutes the largest market by far while North America ranks as the third-largest market after Europe. The two highly dynamic market regions saw a wave of massive smart metering projects being launched or completed during the first half of the current decade. Several major utilities in these regions are thus now preparing for second wave deployments to take off, driven by new smart meter functionalities and smart energy use cases.
For instance, E.ON Sweden, in partnership with Landis+Gyr, has announced a project to connect more than one million NB-IoT-enabled second-generation smart meters.
Sweden began rolling out smart meters in 2009, a development which led to 5.4 million installations.
The UK is busy deploying SMETS2 smart meters which provide support for microgeneration, a range of time-of-use tariffs and consumers with access to better information on their energy consumption.
South and Southeast Asia are on the other hand just beginning their smart metering journeys, following in the footsteps of the leading markets in East Asia.
In an interview with Smart Energy International, Levi Östling, IoT analyst at Berg insights, said the installed base of smart electricity meters in North America will grow at a compound annual growth rate of 6% from 100.7 million in 2018 to reach 142.8 million in 2024.
Asia-Pacific – defined as China, Japan, South Korea, India, Australia and New Zealand – is projected to see the installed base of smart meters increase from 618.8 million units in 2018 to 975 million units in 2024. At this pace, the four Asian markets China, Japan, South Korea and India will alone surpass 1 billion installed smart electricity meters in 2025.
The annual demand for electricity meters in the Asia-Pacific region is in the range of 110–200 million units, with China accounting for around 70% of the volume. The AsiaPacific region is highly fragmented in terms of the progress of smart metering deployments, and the regional markets can be divided into three general groups.
Two countries – China and New Zealand – have more or less completed their first wave deployments of smart electricity meters. In China, second wave deployments are already underway and are soon to begin in New Zealand as well.
South Korea and Japan are on the other hand in the midst of their nationwide deployments and are scheduled to be fully deployed by 2020 and 2024 respectively.
The third group consists of markets finding themselves in the early phases of smart meter deployments
Although Australia was early to deploy smart meters in the state of Victoria, the market has since stayed dormant and just recently resumed deployments after having switched to a market-driven approach. The Indian market has after a few years of pilot projects now begun large-scale deployments of smart metering, largely driven by ambitious government targets to reach nationwide coverage within the next few years.
In total, the penetration of smart meters in Asia-Pacific was 67% in 2018 and is expected to grow to 94% in 2024, primarily driven by the expected mass-deployments in India.
In China and South Korea, domestic standards for PLC communications dominate the smart meter communications space. China has since 2017 started to gradually phase out narrowband PLC in favour of broadband PLC for smart meter communications. The market has also in recent years started to see an increase of dual PLC/RF communication modules aimed at overcoming problems of signal blockage and noise interference.
Factors which have contributed to the preference for PLC technology include the absence of communication fees, limited availability of RF spectrum and a high density of buildings in a large proportion of China’s cities. PLC technology is expected to retain its dominance for at least another 5–10 years, although the communications market is expected to become more diverse with the entrance of new technologies such as NB-IoT into the electricity metering market.
In South Korea, the domestic standard for broadband PLC networking is used for the majority of residential meters, while cellular communications has been the primary choice for C&I customers.
WiMAX technology initially received some traction in Australia and New Zealand but has since the beginning of the decade seen limited adoption. Market-driven rollouts and a low population density outside urban centres are factors that instead have promoted point-to-point cellular smart meter communications. The technology will see a particularly strong potential in forthcoming smart meter deployments in Australia. This particularly as the scattered and highly voluntary uptake of smart meters among customers in the National Electricity Market dilutes the business case for more infrastructure-heavy communications options such as RF mesh or PLC.
In New Zealand, the majority of the installed meter base today operates on 2G/3G cellular networks alongside a few significant deployments of wireless RF mesh networks. The region has however recently started to see the uptake of Cat-M1 network communications for smart metering. Both New Zealand and Australia are likely to see further uptake of cellular LPWA network technologies for smart meter communications in the coming years.
In India, the smart meter communications space is two-fold – isolated procurements of smart meters from single utilities have favoured RF mesh networks for their smart meter deployments while the government-owned company EESL, which aggregates
demand from multiple utilities to conduct mass-procurements of smart meters has chosen cellular communications as its primary option. A drawback of RF communications in India is the narrow frequency spectrum range (865–867MHz) available for smart meter applications. As it is expected that EESL will represent the major share of smart meter procurements in the Indian market the next few years, cellular communications are expected to become the most widely deployed communications technology in the Indian smart metering market. RF mesh deployments are however expected to grow in parallel and account for a significant share of the installed base. An inclination towards NB-IoT communications has moreover started to emerge in the tenders issued by EESL and it is expected to favour the technology over 3G/ LTE once the relevant network infrastructure is in place. The adoption of smart meters in the Indian market is highly driven by the need to lower AT&C losses among the state utilities.
For the meters themselves, this means that prepayment functionality along with tamper protection capabilities are highly prioritised to prevent electricity theft and improve revenue collection.
North America was the first region in the world to move beyond traditional energy metering through the widespread introduction of AMR that started in the 1980s. Today, intelligent grids are becoming an integral part of the development of smart cities, and smart meters’ ability to improve the reliability and resilience of energy supply constitutes an important driver of growth in the region. A majority of the large investor-owned utilities in North America are now either fully deployed or in the implementation or planning phases of large-scale projects, and the second wave of deployments is soon to begin for the early adopters. The penetration of smart meters is currently about 60% and is expected to increase to 81% in 2024, primarily driven by large investor-owned utility projects in the US. The relatively mature market in Canada is expected to see moderate growth.
Proprietary RF mesh (mainly Wi-SUN) or RF point-to-point networking platforms for the unlicensed 915MHz band, as well as different licensed frequency bands, dominate deployments in North America.
PLC technology has been widely perceived as inferior in terms of performance as well as too costly when deployed in North American grids where the ratio of meters per substation is generally low. The technology was nevertheless selected for a number of smaller meter reading deployments during the early part of the century. Many of these deployments, which in total comprise approximately 5 million customers, are now in the process of upgrading to an RF-based metering infrastructure. Point-to-point cellular communication systems have also received limited adoption in the North American market, being perceived as too costly compared to RF communications. A few significant deployments totalling fewer than 4 million meters have however been made throughout the past decade.
Sharing his insight into happenings in the UK, Oliver Archer, an analyst at Cornwall Insight, added: “The [widely reported] drop-off in installations will come as no surprise to many, especially given the ongoing issues with the transition to SMETS2 meters. Meeting the current deadline now looks incredibly challenging. Even an extended target of 2023 presents difficulties – install rates would still need to increase by close to 6,000 meters a day to reach this.
“As the industry finally moves over to SMETS2, technical issues are also beginning to make themselves felt. The north of England, which has historically seen higher penetrations of smart meters, saw installations fall 14% following the SMETS1 end date as suppliers reported difficulties connecting meters to the region’s communication network.
“Installations have consistently lagged on what one might expect to meet the target by the end of the decade. However, the drop off in installations shows a deceleration rather than acceleration, despite the proximity of 2020. Technical issues like those experienced in the north certainly won’t help.”SEI
About the author
Levi Östling is an IoT Analyst with a Master’s degree in Innovation and Industrial Management from the School of Business, Economics and Law in Gothenburg. He joined Berg Insight in 2018 and his areas of expertise include smart metering, smart cities and ITS in public transport.