Mobile technology in smart grids could cut Europe’s annual energy bill by €11.4 billion report


Vittorio Colao, CEO,
Vodafone Group
Newbury, U.K. — (METERING.COM) — July 24, 2009 – Mobile technology use in smart grids could cut Europe’s annual energy costs by €11.4 billion and effect a reduction of greenhouse gas emissions by 43.1 Mt CO2e by 2020, according to a new report from mobile communications group, Vodafone.

To achieve these savings, 495.1 million machine-to-machine (M2M) connections would be required, says the report, “Carbon connections: Quantifying mobile’s role in tackling climate change,” which was prepared in collaboration with Accenture.

The report sets out to quantify the role of mobile technology in driving carbon reductions across a range of industry sectors. It identifies 13 opportunities that could enable carbon abatement across 25 EU countries.

The report says that wireless telecommunications providers are well positioned to provide the M2M communications required for smart grids, with extensive cellular General Packet Radio Service (GPRS) network coverage. For example, the U.K. government aims to replace all standard meters with smart meters by 2020, connecting around 23 million households. GPRS already covers 98 percent of all U.K. households “to the door.” However, only 70 percent of the households have coverage to their meter cupboard.

The study focuses on three key smart grid opportunities to improve the efficiency of transmission and distribution networks, and of end-user electricity use.

Energy network monitoring, in which wireless devices monitor losses and load capacity of the electricity transmission and distribution network and communicate to a central management system via an M2M cellular connection, could yield potential cost savings of €4.2 billion and greenhouse gas emission reduction of 16.4 Mt CO2e by 2020.

Micro-power generation facilitated by smart meters that are connected to the utility company via an M2M cellular connection, could yield potential cost savings of €6.4 billion and greenhouse gas emission reduction of 23.5 Mt CO2e by 2020.

Grid loading optimization facilitated by smart meters with two-way communication between the energy provider and the end consumer via an M2M cellular connection, could yield potential cost savings of €834 million and greenhouse gas emission reduction of 3.2 Mt CO2e by 2020.

According to the report, with an energy management system Vodafone will be enabled to cut carbon emissions and save at least £2 million a year on its energy bills by installing smart metering at its 12,000 base station sites in the U.K. Electricity to run these base stations costs around £20 million a year. Bills have previously been estimated for these sites as most are unmanned with restricted access, making it difficult to read meters manually. With accurate readings from smart meters, Vodafone expects to save 10 percent a year on electricity bills. In addition the need is eliminated for meter reading staff to access the base stations at a cost of between £50 and £100 per visit. With these cost savings enabled by smart meters, Vodafone UK should recoup its initial investment in less than a year, the company says.

“This report demonstrates the important role that mobile technology, in particular smart solutions such as M2M services, can play in carbon abatement while at the same time offering a financial saving for customers,” said Vittorio Colao, CEO of Vodafone Group. “The challenge is for governments and industry to work together to create the necessary policy framework and investment conditions to stimulate their prompt deployment.”

In addition to smart grids, the report assesses other M2M services, including smart logistics, smart manufacturing and smart cities, as well as the substitution of physical goods, processes or travel with “virtual” alternatives, such as video-conferencing or online shopping (dematerialization). Taken together, the energy savings utilizing mobile technology are estimated at least €43 billion and the annual greenhouse gas emission reduction at least 113Mt CO2e by 2020.