Smart meter use will rise dramatically in the next five years


Anton Krawchenko,
London, U.K. — (METERING.COM) — July 12, 2007 – Research by Datamonitor, a consulting company, suggests that the penetration of smart metering will grow from the current 6 per cent to an estimated 41% in Europe and 89% in North America by 2012 as the advantages of the system are realized. And the mass rollout of smart metering will be an opportunity for technology vendors to show how their offerings can facilitate and deliver the benefits that smart metering provides.

Smart metering profits utilities, consumers and governments alike and, as a result, its implementation is a central theme in many governments’ energy conservation policies. Consequently, utilities are now faced with overhauling existing systems and migrating to smart metering.

Datamonitor says that the slower penetration in Europe is the result of concerns over the more competitive market effectively stranding assets when customers want to switch provider. This makes utilities less inclined to install them in the first place. In North America, by contrast, customer turnover is less of an issue, and many utilities have already started a program of replacing existing meters with smart meters.

One crucial benefit of smart metering is the ability to offer demand response programs. Utilities considering the migration to smart metering will typically weigh the cost of implementing the smart metering infrastructure against the benefits that it would receive, typically by way of cost savings. Operational benefits such as reduced manpower for taking meter readings in the field, and a reduction in call center costs via more accurate bills, are immediately apparent and easily quantifiable.

However, there are also important non-operational benefits that need to be taken into consideration. In times of high demand, additional power has to be imported at great cost to the utility. To reduce the need for this imported power and, in turn, to cut these additional costs, smart meters can communicate to customers a higher tariff and provide an incentive for them to reduce their consumption during this peak period.

While simple quarterly or monthly meter readings are collected from traditional meters, smart meters produce a wealth of data, including information on time of use, tariffs, tampering and outage detection, among others. Consequently, software innovations such as the development of meter data management (MDM) suites, have taken place to address this issue. These systems process the vast volumes of data received, and deliver this data to the department that will use it.

According to Datamonitor, technology innovations such as the continued development of broadband/IP communication, Wi-Fi and WiMAX are also helping to drive the uptake of smart metering. At present, the volume of meter data that needs to be transmitted from smart meters to the utility is placing an increasingly heavy burden on traditional 2G mobile networks. Consequently, larger bandwidth options are needed. Broadband has been a key facilitator of smart metering, as a lot of the infrastructure already exists. However, new communication technologies such as Wi-Fi can also have a key role to play in densely populated areas such as towns and cities.

Due to the benefits that smart metering provides across the value chain, the technology is going to grow rapidly. As a result, utilities need to understand how to approach the daunting task of overhauling existing systems. There will certainly be a key role for technology vendors to demonstrate how they can facilitate smart metering and deliver the benefits that the system provides.