By Jonathan Spencer Jones
Brazil’s new smart metering regulation is an important milestone and should be viewed positively – that is the sentiment from Metering, Billing/CRM Latin America 2012, which took place in São Paulo August 21-23.
“Both personally and as a company we regard this as a positive and important step,” said Geraldo Guimarães, VP of Elster Integrated Solutions in Brazil, opening the smart grid session on the last day of the event – a view that the company has since formally endorsed in a statement, as also has Itron.
And of behalf of the electric distributors, “it is aligned with our economic reality,” said José Gabino from the distributors’ association Abradee.
With the announcement of the smart meter regulation from the regulator Aneel days before the event, the stage was set for a full and interesting program with much debate – and also feedback for Aneel. And contrary to some of the initial analysis, and in some cases plain wrong information, that had appeared in some media, the mood was positively upbeat.
What caused the storm was that rather than mandate a nationwide smart meter rollout, as had been expected, the resolution passed by Aneel (502/2012) set out a consumer opt-in plan with two types of smart meters and their minimum functionalities. These are a base model for the so-called “white tariff” (essentially a four step time-of-use) and a more “complete” unit also offering certain power quality data. Both are to be offered to consumers within 18 months of the publication of the resolution (from August 14) for installation at their request.
Explaining the background to this decision, André Pepitone da Nóbrega, director of Aneel, and other Aneel officials during the event, talked about the diversity of conditions across Brazil – ranging from the hot, humid sparsely populated Amazon basin to the high density of cities such as São Paulo – and the consequently different challenges facing the country’s 63 distributors. Also the reasons for moving towards smart grids in Brazil, which are improvement in quality of service and reductions in losses and peak use.
“The aim is to promote the installation of electronic meters … finding the right balance between modernizing the service while minimizing the tariff,” said Pepitone, referring to “risks” in a mandated rollout while stressing the long term aim to change out Brazil’s 70 million meters and move towards smart grids.
The outcome is what is seen as a market-led rollout with the industry to set the pace and extent. There is no target end date, an Aneel official told me. In reality Resolution 502/2012 is also part of a longer process, which has included resolutions on PLC, GIS, distributed generation and time-of-use tariffs, while forthcoming is one on prepayment and others as the industry evolves.
So where does this leave the industry? Luiz Carlos dos Santos, director of legal metrology at Inmetro, reviewed the challenges around meter approvals and concluded that it should be possible to have meters approved to meet the 18 month timeline. “There are a lot of ‘ifs’,” said dos Santos – among them the numbers of meters that will be submitted and whether other labs will be involved.
At this stage there are no meters approved in Brazil that meet Resolution 502/2012 requirements. However, from conversations with manufacturers, some existing meters should require only relatively minor adaptions to do so.
For the utilities a key challenge will be to make the business case. Abradee president Nelson Leite, in a presentation on a project that the organization has been undertaking, said that for all scenarios – predicting from 52% to 75% penetration of smart meters by 2030 (annual requirement 4-7 million units) – the net present value for distributors is negative. Clear public policies are needed to promote investment covering issues such as who and how the costs are covered, recommended Leite, raising what emerged as perhaps the most important issue in driving smart metering and smart grids forward in Brazil.
Distributors were also recommended to start preparing for smart grids by reorganizing their processes and preparing their staff. And like their counterparts in other parts of the world, they should start actively engaging with their customers on energy management and smart metering.
This the 10th Metering, Billing/CRM Latin America event, attracted more than 1,700 participants. This reflects the growing interest in smart metering and smart grids, and the role of the event as the key forum, in the region. Among other activities reported Chilectra has launched the Smartcity Santiago initiative, following a successful 100 meter AMI pilot, AMI pilots are underway in Mexico and the Dominican Republic, and the Colombia Inteligente program is making substantial progress.
With the direction from Resolution 502/2012, the Brazilian industry now has much to keep it occupied in the coming months. These will be keenly watched not only within Brazil but across the region and beyond, and will form the foundation for discussion at Metering, Billing/CRM Latin America 2013 in São Paulo next August.