Right now, smart metering deployment is part of a number of Government initiatives, which will see a radical shake-up of the UK energy industry in the coming years.
According to Ofgem, when taken together, ‘these policies will be the biggest change for the UK energy industry since the switch to North Sea gas’.
And many feel that smart meters will be the enablers of the eventual transition to a low-carbon economy.
Tim Ensor, associate at global strategy consultancy, A.T. Kearney, believes smart meters will allow fundamental changes in the energy industry’s ability to manage the energy distribution network. ‘They will let energy suppliers influence business and consumers’ behaviour by offering advanced tariffs, similar to mobile phone tariffs, which charge different rates for different time of day usage,’ he says.
In addition to allowing consumers to reduce their energy consumption, smart meters are designed to make energy grids more robust and cost effective, enabling countries to integrate alternative technologies into their energy systems.
Analysts at Datamonitor value the market across Western Europe at €15–26bn and point to a redesigning of telecoms industry processes in competitive markets such as the UK ahead of the rollout.
Yet, for the time being, the challenge is to maximise the benefits and cost effectiveness of smart meter rollouts as the utility industry embarks on one of its biggest undertakings.
Alex Desbarres, senior renewables analyst at Datamonitor, explains that the move is not just a gas and electricity engineering project, but a telecommunications and IT project to rival the creation of the internet.
‘Effectively, what we are talking about is the construction of a machine to machine communications infrastructure to rival the online facilities that we have come to enjoy,’ he says.
At present there are a wide range of wireless technologies being used in smart meter deployments, including short-range technologies like Zigbee for in-home connections and longer range technologies including WiMAX and GPRS.
Mobile-cellular and other wireless technologies have been welcomed by the smart meter industry as an enabler of the fast, cost effective rollout of smart meter projects around the world.
“The National Grid in the UK is running a pilot of 65,000 meters using GPRS to communicate with these meters, they expect to have 300,000 meters installed by the end of 2010,’ adds Ensor.
One of the features of smart metering, says Martin Pollock, director, M&A and Regulatory Affairs at Siemens Metering Services, is that it can use several different technologies concurrently.
‘Siemens uses private and public wireless networks, BT phone lines, Power Line Carrier (PLC), GSM and GPRS - pretty much the whole range of options,’ he says. ‘There are “horses for courses” depending on whether the metered points are rural or urban, large or small, electricity-only or gas too and so on.’
For a successful deployment, the communication technology must be bi-directional, reliable, secure, cost effective, easy to maintain, easy to install and compatible with future needs, says Olivier Pauzet, director, product & segment marketing, Sierra Wireless.
‘The main communication technologies used and successfully deployed in smart metering projects have been PLC technology, cellular wireless technology and mesh radio technology,’ he adds.
Each has its own advantages and drawbacks and a successful smart metering deployment will usually be a combination of several technologies. So, a deployment using PLC technology or mesh radio technology would most likely use concentrators that embed cellular technology.
‘Point-to-point GPRS cellular technology has been quite successful in projects deployed in the UK, northern Europe, China, India, Thailand, New Zealand, and North America, especially for C&I smart meter projects,’ adds Pauzet.
‘The key advantage of GPRS cellular technology has been the ease of installation and its low maintenance costs.’
According to Ensor, there is no one single best technology for connecting smart meters to the energy suppliers and consumers.
‘The most cost-effective technology for any individual consumer or business will depend on mobile coverage, population density and the regulatory and commercial framework in which the smart meter deployment is situated,’ he says. ‘There is no doubt that wireless technologies will be used for the in-home network to connect electricity meter, gas meter and in-home display.
‘Mobile-cellular also has a role to play - the UK Government cost-benefit analysis is based on the use of mobile cellular technology to connect smart meters,’ he adds. ‘However, the question remains: will mobile be the predominant technology, or will it be used to fill gaps that other technologies cannot effectively fill?’
Simon Higgins, smart metering solutions architect, Arqiva, says cellular has been used to deploy smart metering to date because it’s widely available.
‘There have been other deployments in other parts of the world,’ he says. ‘So if you look at the North American market, lots of private networks have been used as they have done their mandate and they are deploying services for the long term.
‘In the UK, we’re still just testing the technology and looking at the market construct,’ he adds. ‘So using the readily available consumer networks has been sufficient but I think everybody recognises that in the long term a dedicated, secure, resilient, universal service offering
Chris Harris, head of retail regulation at Npower, thinks smart metering will open the way for lots of new players within the industry as well as putting an end to estimated bills.
‘As suppliers, we’re not really technologists and this is why there will be loads of new players coming to the market,’ he says. ‘There is going to be a central communications provider, which will be open to tender, but it’s unlikely that energy suppliers will play a big role in the central communications provision. Names that spring to mind that might do this include Cisco, Cable & Wireless, BT, Google and T-Mobile. Basically, anyone who routes, receives or sends data out from a box.’
While there are the usual ‘standards’ debates to be resolved, David Rimmer, business development manager at Intamac Systems, believes data communications delivery will be critical.
‘This can be over fixed or mobile broadband networks, and the real battle is likely to be between utility companies and the incumbent mobile and fixed-line service providers,’ he says. ‘This takes us beyond the simple question of “who owns the meter”, towards a possible future where energy is a commodity item and the key question is: “who owns the customer” and is able to provide the best bundled deal?’
All public services and private enterprises will be affected by smart meter deployment and some will benefit by offering new services and engaging with customers in new ways.
Others will profit as recipients of these services, says Ensor. ‘The absolute key is interoperability and the tension between innovation and this,’ adds Harris. ‘Whatever we get to work, it’s got to work for 20 years and allow for innovation.’