London, U.K. — (METERING.COM) — December 5, 2008 – Recent environmental and economic pressures have seen many utilities reconsidering the use of smart metering to end the high operational costs associated with traditional energy usage monitoring and enabling a broader range of service offerings to consumers. But as smart metering gathers momentum, utilities must take extreme care to ensure deploying the new technology does not come at a business loss.
According to a new report “Advanced Metering Management,” from global management consultancy Arthur D. Little’s Energy & Utilities practice, the sheer scale of the investment required to implement these systems, the complexity of the deployment process and its potential to disrupt commercial operations, and the significant impact on key business processes means utilities need to undertake careful and detailed planning before moving ahead.
The report details how mistakes made in the planning process for smart metering deployment will have a severe impact on the utilities provider’s logistics, economic planning, and organizational design in the long term, and highlights a number of issues that must first be addressed before deployment to ensure a successful smart metering system.
According to the report, Arthur D. Little believes that any utility considering smart metering should start by stating clearly what its strategic objectives are in relation to smart metering. The utility will need to define its desired positioning and the functionalities it requires to meet both the immediate and long term regulatory, product service and operational needs, and use this as a basis for assessing the technical options available.
When it comes to selecting a system Arthur D. Little would recommend where possible an intermediate solution in which some key system components can be upgraded to include more advanced functionalities as the need arises. This limits the risk of the system not being able to cope with future requirements, while delaying investment that is not essential in the short term.
Then there are a number of key issues that utilities must address and carefully plan for in order to deploy and operate a smart metering system successfully. The first is to establish a working technological solution, from meter to concentrator, linked to commercial and technical systems. Once the technical trials and planning for system integration is complete, the other pieces of the puzzle – field deployment and operations – can be put into place.
Given the complexity of smart metering deployment, good management is required on all levels in order for the significant investment to be used effectively. Finally, utilities cannot underestimate the impact a new smart metering system will have on operations. Many companies will have to redefine their key business processes, operations, and human resources. Inevitably, any alteration will impact upon the utilities relationships with external players, such as suppliers and regulators, augmenting the complexity of the entire supply chain.
“When it comes to investment in smart metering, we believe that in many cases short-term cost could ultimately lead to long-term gain,” said Jesus Rui, a co-author of the report and senior manager in Arthur D. Little’s Global Energy & Utilities Practice, making the case for utilities to seek expert support. “By being clear about what they want to achieve through smart metering, utilities can maximize their chances of a successful deployment that will deliver reliable, accurate service over time.”