Smart Metering in the Energy and Utilities Sector (Review Report)

This report combines all three briefs from the Energy and Utilities Technology theme for Q1 2007: smart metering in the energy and utilities market. By addressing the market, strategy and technology aspects of this topic, this Review Report provides an holistic picture of the subject. Forecast data also offers projections for the future direction of the market for smart metering.

Report Highlights


Smart metering has evolved from traditional Automatic Meter Reading (AMR) and the new technology offers the potential to benefit the entire value chain of energy stakeholders. Nevertheless, although driven by a variety of legislative and commercial factors, success will depend on effective regulation and guidance from governments. Migrating to smart metering is being pushed by legislation in many countries. Nevertheless, it requires a significant overhaul of existing systems. Understanding how to develop a business case and evaluate the costs and benefits of migration is crucial if the most efficient solution is to be found. The migration to smart metering will require investment in a variety of technologies; these will need to be networked and integrated together in order to create the infrastructure to support smart metering.
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OVERVIEW 1
Catalyst 1
Summary 1
Methodology 1
EXECUTIVE SUMMARY 2
Introduction 2
The impact of smart metering on the energy and utilities market (Market Focus) 2
Smart metering migration strategies for energy and utilities companies (Strategy Focus) 2
The future of metering technology (Technology Focus) 2
Smart metering forecast for North America and Europe, 2006-12 (Databooks) 3
TABLE OF FIGURES 5
TABLE OF TABLES 6
THE IMPACT OF SMART METERING ON THE ENERGY AND UTILITIES MARKET (MARKET FOCUS) 7
Summary 7
Smart meters have moved beyond AMR and offer a wide variety of functionality 7
The introduction of solid-state meters led to the expansion of AMR 7
Smart meters offer a wealth of functionality that appeals to multiple stakeholders 8
Advanced Metering Infrastructure (AMI) supports the increased functionality of smart metering 9
Residential electricity metering is a priority 10
Legislation is driving implementation but more regulation is needed 11
Smart meter legislation is an important part of the solution to a variety of issues facing governments today 11
Energy Policy Act, 2005 - section 1252 (USA) 13
Energy Conservation Responsibility Act, 2006 (Canada) 13
Energy End Use Efficiency and Energy Services Directive, 2006 - Article 13 (EU) 13
Operational benefits and demand management are also key drivers for other energy stakeholders 13
Further regulation will be necessary to overcome smart metering challenges 14
Avoiding low-cost meters by standardizing assets 15
Ensuring interoperability to avoid 'stranded' assets 15
Regulation and help is on the way 15
Smart metering is expected to have a positive impact on carbon reductions 16
Nordics lead the way but North America is quick on the uptake 16
Evidence suggests that smart metering will help meet government goals 18
SMART METERING MIGRATION STRATEGIES FOR ENERGY AND UTILITY COMPANIES (STRATEGY FOCUS) 20
Summary 20
The move to smart metering will involve a substantial overhaul of existing systems 20
New meter technology and hardware will be a significant outlay 20
Meter assets and meter devices 20
Hardware at supplier-end of value chain 21
Enhanced networking and communications will be necessary to deal with two-way communication 22
New software and integration will be crucial to meet the needs of multiple stakeholders 22
Developing an effective business case is fundamental to the adoption of smart metering 23
Developing a business case requires looking at different operational areas impacted 24
Cost-benefit analysis for individual operational areas is required initially 24
Operational benefits primarily accrue by reducing theft 25
Overall AMI costs typically outweigh the net operational benefits 26
Demand management benefits also need to be taken into consideration 27
Demand response programs deliver the main benefits of demand management 27
Benefits from supplier load management also 28
There are a variety of internal challenges that must also be addressed 29
Developing a wider roll-out and adoption strategy is vital 29
Planning 30
Procurement 30
Deployment 32
Marketing is another key challenge that needs to be overcome to ensure success is achieved 32
Marketing will be crucial 32
Full internal participation must be coupled with executive sponsorship of the migration process 33
Transparency and revisions are also essential 34
THE FUTURE OF METERING TECHNOLOGY (TECHNOLOGY FOCUS) 35
Summary 35
Smart metering assets must be part of an in-home network 35
Smart metering supports functionalities that require networking with a number of peripheral assets 35
ZigBee has arisen as a key wireless networking solution for smart metering 36
Wider communications infrastructure is where most innovation is currently occurring 38
Traditional smart metering solutions rely on Power Line Carrier and Radio Frequency communication 38
A variety of other network communication possibilities are arising for smart metering 39
Optimal infrastructure will typically involve a blend of networks 40
Meter Data Management software is vital to meet the various end-user needs 41
Meter Data Management is a necessary interface between the AMI network and back-office systems 41
Installing MDM is a preferable solution to manually built alternatives 43
MDM has multiple benefits that will reduce costs 43
Case Study: Southeastern Utility, USA 44
Vendors must seek ways to be competitive in the smart metering market 44
Vendors need to ensure products are technologically future-proof and compatible with other vendors 44
Entering partnerships with other vendors is an attractive way to offer holistic solutions 45
Mergers and acquisitions are another important way of expanding vendors' solution sets 45
Vendors need to remain alert to regulation and legislation 46
SMART METERING PENETRATION FORECAST FOR NORTH AMERICA, 2006-12 (DATABOOK) 47
Introduction 47
Smart meter penetration in North America, 2006-12 48
Smart meter penetration in Canada, 2006-12 49
Smart meter penetration in United States, 2006-12 50
Smart meter penetration in US-Northeast, 2006-12 51
Smart meter penetration in US-Midwest, 2006-12 52
Smart meter penetration in US-South, 2006-12 53
Smart meter penetration in US-West, 2006-12 54
SMART METERING PENETRATION FORECAST FOR EUROPE, 2006-12 (DATABOOK) 55
Introduction 55
Smart meter penetration in Europe, 2006-12 56
Smart meter penetration in 'Big 5', 2006-12 57
Smart meter penetration in 'Big 5', 2006-12 57
Smart meter penetration in Benelux, 2006-12 58
Smart meter penetration in Nordics, 2006-12 59
Smart meter penetration in Rest of Western Europe (RoWE), 2006-12 60
Smart meter penetration in New EU-10 (NEU10), 2006-12 61
Smart meter penetration in Rest of Europe (RoE), 2006-12 62
Smart meter penetration in Austria, 2006-12 63
Smart meter penetration in Belgium, 2006-12 64
Smart meter penetration in Bulgaria, 2006-12 65
Smart meter penetration in Cyprus, 2006-12 66
Smart meter penetration in Czech Republic, 2006-12 67
Smart meter penetration in Denmark, 2006-12 68
Smart meter penetration in Estonia, 2006-12 69
Smart meter penetration in Finland, 2006-12 70
Smart meter penetration in France, 2006-12 71
Smart meter penetration in Germany, 2006-12 72
Smart meter penetration in Greece, 2006-12 73
Smart meter penetration in Hungary, 2006-12 74
Smart meter penetration in Ireland, 2006-12 75
Smart meter penetration in Italy, 2006-12 76
Smart meter penetration in Latvia, 2006-12 77
Smart meter penetration in Lithuania, 2006-12 78
Smart meter penetration in Luxembourg, 2006-12 79
Smart meter penetration in Malta, 2006-12 80
Smart meter penetration in Netherlands, 2006-12 81
Smart meter penetration in Norway, 2006-12 82
Smart meter penetration in Poland, 2006-12 83
Smart meter penetration in Portugal, 2006-12 84
Smart meter penetration in Romania, 2006-12 85
Smart meter penetration in Russian Federation, 2006-12 86
Smart meter penetration in Slovakia, 2006-12 87
Smart meter penetration in Slovenia, 2006-12 88
Smart meter penetration in Spain, 2006-12 89
Smart meter penetration in Sweden, 2006-12 90
Smart meter penetration in Switzerland, 2006-12 91
Smart meter penetration in United Kingdom, 2006-12 92
APPENDIX 93
Definitions 93
Methodology 95
Further reading 95
Ask the analyst 95
Datamonitor consulting 95
Disclaimer 95
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Table 1: New communications infrastructure is driving new AMR opportunities 39
Table 2: Smart meter penetration in North America, 2006-12 48
Table 3: Smart meter penetration in Canada, 2006-12 49
Table 4: Smart meter penetration in United States, 2006-12 50
Table 5: Smart meter penetration in US-Northeast, 2006-12 51
Table 6: Smart meter penetration in US-Midwest, 2006-12 52
Table 7: Smart meter penetration in US-South, 2006-12 53
Table 8: Smart meter penetration in US-West, 2006-12 54
Table 9: Smart meter penetration in Europe, 2006-12 56
Table 10: Smart meter penetration in Big 5, 2006-12 57
Table 11: Smart meter penetration in Benelux, 2006-12 58
Table 12: Smart meter penetration in Nordics, 2006-12 59
Table 13: Smart meter penetration in RoWE, 2006-12 60
Table 14: Smart meter penetration in NEU10, 2006-12 61
Table 15: Smart meter penetration in RoE, 2006-12 62
Table 16: Smart meter penetration in Austria, 2006-12 63
Table 17: Smart meter penetration in Belgium, 2006-12 64
Table 18: Smart meter penetration in Bulgaria, 2006-12 65
Table 19: Smart meter penetration in Cyprus, 2006-12 66
Table 20: Smart meter penetration in Czech Republic, 2006-12 67
Table 21: Smart meter penetration in Denmark, 2006-12 68
Table 22: Smart meter penetration in Estonia, 2006-12 69
Table 23: Smart meter penetration in Finland, 2006-12 70
Table 24: Smart meter penetration in France, 2006-12 71
Table 25: Smart meter penetration in Germany, 2006-12 72
Table 26: Smart meter penetration in Greece, 2006-12 73
Table 27: Smart meter penetration in Hungary, 2006-12 74
Table 28: Smart meter penetration in Ireland, 2006-12 75
Table 29: Smart meter penetration in Italy, 2006-12 76
Table 30: Smart meter penetration in Latvia, 2006-12 77
Table 31: Smart meter penetration in Lithuania, 2006-12 78
Table 32: Smart meter penetration in Luxembourg, 2006-12 79
Table 33: Smart meter penetration in Malta, 2006-12 80
Table 34: Smart meter penetration in Netherlands, 2006-12 81
Table 35: Smart meter penetration in Norway, 2006-12 82
Table 36: Smart meter penetration in Poland, 2006-12 83
Table 37: Smart meter penetration in Portugal, 2006-12 84
Table 38: Smart meter penetration in Romania, 2006-12 85
Table 39: Smart meter penetration in Russian Federation, 2006-12 86
Table 40: Smart meter penetration in Slovakia, 2006-12 87
Table 41: Smart meter penetration in Slovenia, 2006-12 88
Table 42: Smart meter penetration in Spain, 2006-12 89
Table 43: Smart meter penetration in Sweden, 2006-12 90
Table 44: Smart meter penetration in Switzerland, 2006-12 91
Table 45: Smart meter penetration in United Kingdom, 2006-12 92


Figure 1: Key functionalities associated with smart metering 8
Figure 2: The benefits of smart metering accrue across the whole value chain 9
Figure 3: A simplified view of Advanced Metering Infrastructure 10
Figure 4: Percentage of smart meters shipped in 2001 11
Figure 5: Drivers facilitating governmental adoption of smart metering legislation 12
Figure 6: Using Critical Peak Pricing (CPP) to help reduce loads at peak times 14
Figure 7: Smart metering penetration in North America and Europe, 2006-2012 17
Figure 8: Case Study: Enel, Italy 18
Figure 9: Reductions in carbon emissions as a result of smart metering introduction 19
Figure 10: Smart metering functions require an investment in metering assets and devices 21
Figure 11: Complexity in supplier business without data management system 23
Figure 12: Cost-benefit analysis of smart metering/AMI on individual operational area 25
Figure 13: Operational benefits of smart metering 26
Figure 14: Weighing net operational benefits against overall smart metering/AMI costs 27
Figure 15: Benefit of demand response programs 28
Figure 16: AMI Cost-Benefit Analysis for Southern California Edison 29
Figure 17: Three phases of the wider roll-out and adoption strategy and timelines 30
Figure 18: Penetration of smart meter deployment over 7 year strategy 32
Figure 19: Wireless networking solutions for in-home smart metering devices 36
Figure 20: In-home network for smart metering assets 37
Figure 21: Using a Power Line Carrier (PLC) network to transfer smart meter data 38
Figure 22: Wireless mesh network for smart metering 40
Figure 23: MDM system 42
Figure 24: Smart meter penetration in North America, 2006-12 48
Figure 25: Smart meter penetration in Canada, 2006-12 49
Figure 26: Smart meter penetration in United States, 2006-12 50
Figure 27: Smart meter penetration in US-Northeast, 2006-12 51
Figure 28: Smart meter penetration in US-Midwest, 2006-12 52
Figure 29: Smart meter penetration in US-South, 2006-12 53
Figure 30: Smart meter penetration in US-West, 2006-12 54
Figure 31: Smart meter penetration in Europe, 2006-12 56
Figure 32: Smart meter penetration in Big 5, 2006-12 57
Figure 33: Smart meter penetration in Benelux, 2006-12 58
Figure 34: Smart meter penetration in Nordics, 2006-12 59
Figure 35: Smart meter penetration in RoWE, 2006-12 60
Figure 36: Smart meter penetration in NEU10, 2006-12 61
Figure 37: Smart meter penetration in RoE, 2006-12 62
Figure 38: Smart meter penetration in Austria, 2006-12 63
Figure 39: Smart meter penetration in Belgium, 2006-12 64
Figure 40: Smart meter penetration in Bulgaria, 2006-12 65
Figure 41: Smart meter penetration in Cyprus, 2006-12 66
Figure 42: Smart meter penetration in Czech Republic, 2006-12 67
Figure 43: Smart meter penetration in Denmark, 2006-12 68
Figure 44: Smart meter penetration in Estonia, 2006-12 69
Figure 45: Smart meter penetration in Finland, 2006-12 70
Figure 46: Smart meter penetration in France, 2006-12 71
Figure 47: Smart meter penetration in Germany, 2006-12 72
Figure 48: Smart meter penetration in Greece, 2006-12 73
Figure 49: Smart meter penetration in Hungary, 2006-12 74
Figure 50: Smart meter penetration in Ireland, 2006-12 75
Figure 51: Smart meter penetration in Italy, 2006-12 76
Figure 52: Smart meter penetration in Latvia, 2006-12 77
Figure 53: Smart meter penetration in Lithuania, 2006-12 78
Figure 54: Smart meter penetration in Luxembourg, 2006-12 79
Figure 55: Smart meter penetration in Malta, 2006-12 80
Figure 56: Smart meter penetration in Netherlands, 2006-12 81
Figure 57: Smart meter penetration in Norway, 2006-12 82
Figure 58: Smart meter penetration in Poland, 2006-12 83
Figure 59: Smart meter penetration in Portugal, 2006-12 84
Figure 60: Smart meter penetration in Romania, 2006-12 85
Figure 61: Smart meter penetration in Russian Federation, 2006-12 86
Figure 62: Smart meter penetration in Slovakia, 2006-12 87
Figure 63: Smart meter penetration in Slovenia, 2006-12 88
Figure 64: Smart meter penetration in Spain, 2006-12 89
Figure 65: Smart meter penetration in Sweden, 2006-12 90
Figure 66: Smart meter penetration in Switzerland, 2006-12 91
Figure 67: Smart meter penetration in United Kingdom, 2006-12 92
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