Smart Metering Migration Strategies for Energy & Utilities companies (Strategy Focus)

Migrating to a smart metering approach is being pushed by legislation in a variety of 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. A variety of internal challenges will also have to be overcome.



Report Highlights
Migrating to smart metering will involve replacing legacy infrastructure with new investments. Key investment areas will be in hardware, communications and networking and software. Developing an effective business case for smart metering will require each operational area to address the impact smart metering will have on it. However, the benefits will likely be insufficient unless the utility also includes the variety of demand and supply-side management benefits that smart metering provides. Business case modelling must sit within a wider smart metering roll out and adoption strategy, which typically involved planning, procurement and deployment phases. A need for executive sponsorship is also critical and the issue of marketing must also be addressed.


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DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 2
The move to smart metering will involve a substantial overhaul of existing systems 2
New meter technology and hardware will be a significant outlay 2
Meter assets and meter devices 2
Hardware at supplier-end of value chain 3
Enhanced networking and communications will be necessary to deal with two-way communication 3
New software and integration will be crucial to meet the needs of multiple stakeholders 4
Developing an effective business case is fundamental to the adoption of smart metering 5
Developing a business case requires looking at different operational areas impacted 5
Cost-benefit analysis for individual operational areas is required initially 6
Operational benefits primarily accrue by reducing theft 7
Overall AMI costs typically outweigh the net operational benefits 8
Demand management benefits also need to be taken into consideration 8
Demand response programs deliver the main benefits of demand management 9
Benefits from supplier load management also 10
There are a variety of internal challenges that must also be addressed 11
Developing a wider roll-out and adoption strategy is vital 11
Planning 11
Procurement 12
Deployment 13
Marketing is another key challenge that needs to be overcome to ensure success is achieved 13
Marketing will be crucial 13
Full internal participation must be coupled with executive sponsorship of the migration process 14
Transparency and revisions are also essential 15
APPENDIX 16
Definitions 16
Methodology 17
Further reading 17
Ask the analyst 17
Datamonitor consulting 17
Disclaimer 17

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Figure 1: Smart metering functions require an investment in metering assets and devices 3
Figure 2: Complexity in supplier business without data management system 5
Figure 3: Cost-benefit analysis of smart metering/AMI on individual operational area 6
Figure 4: Operational benefits of smart metering 7
Figure 5: Weighing net operational benefits against overall smart metering/AMI costs 8
Figure 6: Benefit of demand response programs 9
Figure 7: AMI Cost-Benefit Analysis for Southern California Edison 10
Figure 8: Three phases of the wider roll-out and adoption strategy and timelines 11
Figure 9: Penetration of smart meter deployment over 7 year strategy 13

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