The utility industry has been deploying smart meters for about 15 years and by 2020 it is estimated that greater than 80% of the consumers in the United States electricity market will have one. So by now, smart metering benefits should be well understood and their deployment largely routine.
Yes – and no, says Dave Connaker, General Manager for Analytics at Landis+Gyr. And that response is related to how technologies and markets have evolved, opening the way for new opportunities and new benefits.
“Smart meters have evolved from being a means to improve meter reading and billing to becoming the most important element in the evolution of the grid,” says Connaker. “Many sensors and devices are now coming on to the grid but from a holistic perspective smart meters are foundational in terms of the insights they bring from the grid to the customer.” [Engerati-In Focus: Smart Metering - End to End Rollouts]
According to Connaker, utilities are now able to incorporate real-time analytical tools into their internal processes, leverage advanced meter data to model and monitor patterns, make predictions to ensure the stability of the network and rapidly identify losses.
Smart meters in the energy transformation
The challenges involved with managing ageing assets, distributed energy resources and two-way power flows as well as improving energy efficiency and meeting carbon reduction requirements are all impacting the utility business model and in turn the evolving role of smart meters.
“It’s all about maintaining and improving reliability as the grid evolves, while managing costs and staying viable as a business” says Connaker.
One of the first applications of smart meters, albeit with varying degrees of success, was to provide customers with information on their energy consumption. With that also has come the opportunity to offer new variable rate structures such as time-of-use.
While agreeing with the importance of end consumer awareness and engagement, Connaker cites what he considers as one of the most significant benefits as improved management and restoration of outages. “We have seen cases of smart meters detecting an outage without the end consumer even being aware of it,” he says. As an example of a critical application he cites the case of a nearby community of lakeside holiday homes, which are infrequently occupied and where an undetected outage could lead for example to a security breakdown or loss of food in a freezer.
“This is a wonderful customer service play and instead of waiting for the customer to call you, how much more ideal is it to be able to call the customer and say ‘I’m aware of your outage and am fixing it’.”
Smart meter business case
Access to energy consumption data opens other opportunities to engage with customers, and especially with millennials who have shown interest in connecting with their utilities. [Engerati-What millennials are telling us]
“They want to be told when their power is off or on but they want much more. They want dedicated services instantly available on their computer or mobile phone,” says Connaker. “Smart metering allows you to push information out and for the next generation of power users that will be very important.”
This application – and the growing need for utilities to become more customer centric – also highlights the changing smart meter business case and how benefits such as customer engagement can be included. Connaker comments that the inclusion of such ‘soft benefits’ in the business case is “something that’s going to have to happen.”
“Utilities have to focus on their future, especially since customers are gaining other options. There’s new power suppliers coming in, microgrids are being set up and distributed energy sources can be bought with very low cost of entry.”
As an indication of the disruptions occurring in the sector he points to SolarCity’s intention to achieve a cost of US$1.50/Wp against the more than $2/Wp currently. Also, new figures from McKinsey show that energy demand growth in the US from 2001 to 2015 has been basically flat at 1.4%.
“Regulators must understand these trends and the challenge I see is that they are going have to figure out how the various parties are going to play in this new environment.”
Smart meter technology trends
With technologies continuing to evolve, smart metering likewise continues to do so. Connaker says one of the most important advances has been the ability to do firmware upgrades to large populations of meters over the air for new applications and services.
“The meters are innovating but I believe we are going to see less and less innovation in the meter itself and more on the software side and we are going to talk more about communication networks and what they can give rather than meters and what they can give.”
With an increasing amount of devices on the network and near real time requirements for growing numbers of applications, speed and bandwidth are crucial factors. Connaker says that in Landis+Gyr’s case the capacity of communications network is scaled for future applications, known or unknown. Among these will be smart home applications drawing back data from connected appliances.
As an example of the growing ‘network type’ projects, Connaker cites the case of a Los Alamos County, New Mexico utility, which is building a smart community with smart meters, solar PV and storage and the related meter and energy management software. The plan is to expand the 1,600 end point pilot almost utility wide.
“With utilities increasing renewable penetration, integrated solutions such as this will become more commonplace.”
Lessons for smart meter rollout
Even with the high penetration of smart meters in the US, the deployment is still a demanding challenge requiring careful planning and project management. Connaker cites the need for customer education and addressing issues such as privacy and health concerns. In addition, there are institutional challenges as a deployment touches every department of the utility. He advises that a “holistic plan to utilize the entire breadth of your organization” is essential.
“The success stories always start with educating customers and then having all the business processes put in place prior to rollout,” he says. “These are lessons we learned by experience in the US and we now can pass that experience on to Europe or elsewhere.”
He also advocates the role of the vendor as a partner and rather than focusing on the next technology developments, partnering with a vendor “who has market experience and brings those developments over time.”
“We have had our biggest successes with utilities that have brought us into their resource planning and so we are aware and tightly connected to where they want to go in the future. Then we can help them get there faster.”