By Michael Markides
Utility metering has historically been seen as something of a niche application by many semiconductor makers – one with plenty of potential but where meter manufacturers and utilities move at a snail’s pace in adopting new technology and where caution is a by-word for the industry. In that 2006 article we revealed that these perceptions were changing quite quickly. Just one example of this is the revelation that more than 50 percent of electricity meters shipped in 2007 were static. The Metering, Billing/ CRM Europe show in Austria last month provided yet more evidence that this is an industry in transition. A visitor to the show who had been absent for the last three or four years would not have recognised it. Not only were there more and bigger stands and many more visitors, but also there was a “buzz” about the exhibition hall that is more typical of the big, high technology electronics shows.
Solutions for Automatic Meter Reading (AMR) and Automatic Meter Management (AMM) were particularly prominent amongst both meter makers and semiconductor companies. There is still considerable frustration concerning the speed with which AMR/AMM is being adopted in Europe, particularly in liberalised markets such as the UK. However, despite this there is growing evidence that a wave of AMM/AMR installations will be seen in Europe over the next decade, offering opportunities to both meter producers and component companies alike. Prominent examples are obviously the new legislation forcing developments in The Netherlands, the Endesa specification in Spain for PLCbased meters, EDF’s aggressive plans for rollout in France, and the potential adoption of AMR for gas meters in Italy, but there are also numerous smaller projects in other European countries, with the Nordic region being particularly prominent.
One of the key issues for utilities when looking to adopt an AMR/AMM solution is the plethora of different solutions from different vendors. Even when the communications technology choice is the same (PLC, radio, GSM, etc.) few of the available solutions are interoperable. As a result, utilities are now looking to force the industry to move in the direction of alliances, where meter makers are expected to work together to offer multiple sources of a particular solution and ensure that a utility is not wholly reliant on a single supplier. A similar problem exists further down the value chain for the semiconductor industry, with meter manufacturers reluctant to leave themselves wholly dependent on a single supplier of customised or semi-customised ICs. Semiconductor vendors that are able to offer genuine second-sources will gain a real competitive advantage. A good example of this strategy being adopted is provided by the Endesa project. The PLC-based electricity meter specification by Endesa has led to solutions being produced by a number of different meter manufacturers, with silicon being sourced from two independent semiconductor companies - Renesas and Yitran.
The multitude of different AMR/AMM solutions presents a second problem for IC makers. Which solution(s) should be supported? Even deciding to support PLC, for example, is not sufficient since this then begs the question, narrowband or broadband, and then which modulation scheme? This is forcing semiconductor companies to make choices now as to which technologies to support, which will determine long term success in the market, but may not be proven correct (or not!) for many years.
As AMR/AMM solutions are further developed and refined, IC makers will be faced with the decision as to whether to try to produce integrated solutions combining the basic static meter functionality with the AMR/AMM functions. This will be a straight trade-off between price and flexibility. IMS Research’s view at present is that most solutions will not be integrated initially. However, once AMR/AMM meter volumes start to rise, cost reduction strategies may result in this type of combined solution gaining share.
So IC makers face some tricky choices over the coming months and years if they want to succeed in the emerging world of the connected home. These issues will be dealt with in more detail in IMS Research’s upcoming report on Semiconductors and Components in Utility Meters, and will doubtless be major discussion topics at the Smart Energy International’s World Meter Design Congress in San José next February. I hope to see you there!