Smart metering lowers meter reading costs


Paris, France — (METERING.COM) — October 2, 2008 – Smart metering lowers meter reading costs substantially, a benchmarking survey of distribution utilities in Europe has found.

In the study of 46 distribution network operators (DNOs) in 13 countries in Europe, meter reading costs were found to range from less than €1 to more than €11 per customer, with the non-weighted average cost being €5. While discrepancies can be due to the frequency of meter reading and the way the reading process is managed, the lowest meter reading costs were found in the DNOs in the sample that had implemented smart meters.

The study by Capgemini was aimed at assessing the performance of European DNOs and found that on average 59 percent of the annual costs are linked to the value of assets including depreciation, financial cost and network operations, while 41 percent are linked to the volume of net delivered energy or the number of customers.

Comparing efficiencies, performances between DNOs were found to vary by less than a factor 2. Nevertheless large differences were observed in the network and customer operating costs, such that the least efficient DNO could improve its full cost by 40 percent if its operating costs were at the same level as the most efficient DNO.

In terms of customer related activities the quality of service was found to vary distinctly between the DNOs. A small group of DNOs have embraced sophisticated communication tools for customers, such as online self meter reading, and the highest performing DNOs tend to outsource less of their customer activities than their lower performing peers.

Forty-two percent of the DNOs were found to be involved in demand side management (DSM) activities. The leading DNOs have implemented carefully planned strategies to introduce sophisticated DSM services. While DSM technology may require new investment and new ways to communicate with customers, more involvement in DSM offers an opportunity for DNOs to improve their long term economic performance, through better consumption efficiency that leads to less network-related investment.

The DNOs participating in the survey are responsible for electricity supply to 110 million customers, comprising 44 percent of EU-25 electricity connected customers.