[Nicholas McDiarmid][October 26, 2006] It is repeatedly observed that advanced metering technology is currently in what is called the tornado phase – a pioneer phase in which a multitude of platforms and applications are available, but also in which no standards or norms prevail. If that is true, then attending this year’s Autovation 2006, the AMRA’s International Symposium, was like being at the eye of the storm.
Bigger and bigger
Beginning on 22 October 2006, the symposium was well attended and attracted all the big names in metering today. And while there was much debate and disagreement, on some issues there was unanimity. Everyone agreed 2005-2006 has seen the most growth in the metering industry ever. There was also agreement that if a utility – investor owned, publicly owned, large or small – is to survive in today’s increasingly competitive market, deploying smart metering in some form or another is a non-negotiable.
Catching the second wave
In the U.S.A., 80 per cent of all households are equipped with some form of advanced meter reading (AMR) technology. Most of this technology is not part of an advanced metering infrastructure (AMI), however, and does not allow for two-way communications, time-of-use billing and other advanced applications.
As Howard Scott noted in his presentation, it is the utilities that did not catch the wave of earlier AMR rollout that will lead the way in AMI. “It is ironic that while California almost completely ignored advanced metering in the 90s, they will definitely be leading the way in this second wave of metering.” According to Scott, those utilities that did deploy earlier AMR technology are unlikely to upgrade for the next ten years. The larger vendors, like Elster, Cannon and Cellnet, concur that the AMR market is rather saturated in the United States, and that their focus will be on the market that is upgrading, as well as foreign markets.
Many delegates to whom I spoke casually observed that a business case for smart metering cannot be made on metering alone. It is the advanced applications and those applications’ potentials that utilities can (and are) using to justify the deployment of AMI. Research presented by Dennis Smith of Chartwell reflected this sentiment. While utilities prioritize the use of AMI to reduce costs (43%), reduce estimated bills (33%) and enhance CIS/CRM (13%), beyond metering, in what are called ‘day-two’ applications, utilities in the US have prioritized the following applications:
- Pricing flexibility
- Theft detection and revenue protection
- Outage management
- Supply control
- Leak detection, and
- Distribution management.
Perhaps the biggest area of indecision is meter data management. Only 25 per cent of utilities had any kind of strategy for managing data!
So while cost is still the number one barrier to entry in the US market, 52 per cent of all utilities see two-way AMI as critical for ongoing business.
Not a big player in the US market, prepayment meters have found homes in smaller communities and in the cooperative utilities market. James Green of Brunswick EMC presented a fascinating case study of a prepayment deployment that occurred during the 1990s. 83 per cent of residential customers in this coastal community chose prepayment over regular metering and billing and have stuck with it. 65 per cent say that they will never go back regular billing. But of most interest is that prepayment is now also joining the second wave of AMI, and next-generation prepayment, with full smart metering potential, is already being rolled out.
Where’s the map?
The truth is that anything resembling a road-map, a standard, or a protocol, is a long way from being finalized. AMI is pioneer territory, and one thing is clear: gas, water and electric utilities from all over the U.S. are preparing or finalizing their business cases for AMI rollout, although it will be a while before we see the actual results.
For utilities, the skill will be in wisely realizing the technology’s potentials; for vendors, it will be in wisely responding to their customers’ needs. To quote Sharon Allan, president of Elster’s newly-launched Integrated Solutions Division, “The future is in partnering with our customers. We have to work alongside our clients and have them share their insights with us, both in order to serve them and to best determine the direction of research and development.”