By John Starrenburg

Only in Italy this has been done before (on an even larger scale, around 30 million meters), but solely for electricity meters: gas penetration in Italy (and other European countries) is not as high as in The Netherlands, where around 99 percent of households and SMEs have a gas connection.

COUNT DOWN HAS BEGUN …
Although the business case was difficult to write in black figures, the result of various European energy directives is that in 2008 a new Dutch energy savings law will become effective, which among other aspects enforces the aforementioned large scale rollout of smart meters for electricity and gas connections.

Next to this logistic challenge for meter installation, utilities will need new skills in running an intelligent device network. This activity is closer to becoming a telecoms operator than to extending the classical SCADA-type of activities to manage the utility network. Furthermore, the design and implementation of a new Dutch liberalised market model in 2010 creates new processes and responsibilities for suppliers as well as grid operators, and has to take into account the new possibilities smart meters offer to these market roles. In this new market model, grid operators will be responsible for the rollout of the meter and operation of the meter network, and suppliers will be responsible for meter data validation and manipulation, data mining and marketing, and integration of smart meter data and functions in their service offerings. This is completely opposite to the way the market is currently organised, where customers can choose their own meter company and the grid operator is responsible for the meter data validation and manipulation.

All of this results in various challenges and opportunities for the grid operators and suppliers active in the Dutch energy market. Logistics concepts, processes, operations, communications and meter technology will change, but also create new opportunities. Several energy companies have initiated pilots to acquire market share (as a supplier), test technology (as a grid operator), or test logistics concepts. As yet there has been little or no emphasis on innovative energy concepts or interaction between existing or new market roles (like the measurement company or added value provider, see below).

A SHORT OVERVIEW OF THE SYSTEM AND BUSINESS ARCHITECTURE
It is interesting to review how the different components are put together in the Dutch smart metering architecture (Figures 1 and 2, based on the Dutch Technical Standard that is still under review by the EU).

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Figure 1 – Schematic of smart metering architecture in The Netherlands (from NTA 8130)

First there is the P1 customer interface, which is a local (wired) port where an energy company can send data (information, commands or whatever is worth sending) to an individual customer’s premise. The P2 meter interface is designated to interface with the other available product meters like gas and even water or heat (although the latter two are still regulated, they reside in the same premise as the electricity and gas meter). The electricity meter is always the communication portal with the P3 wide area communication interface to the Central Access System (CAS) that is operated by the grid operator to read and manage all smart meters in a large intelligent device network. Finally, there is the P4 market interface, which is the point where all de-regulated parties like suppliers (via certified measurement companies) and additional service providers (ASPs) can obtain their register and interval data and place requests for connect/disconnects and additional P1-related services. This (raw) data is made available by the grid operator on standardised web services, via agreed service levels that address security, responsiveness, actuality and completeness. That can be as demanding as all interval data of all contracted connection points on a daily basis. How the data is used (data mining, targeting specific customer segments, revenue protection, time-of-use billing, billing analysis) is up to the supplier or ASP.

…99, 98, 97 – ENGINE IGNITION
Several grid operators have already started with pilots. Numbers vary, but Delta and Continuon are testing technology (PLC, DSL via cable, GPRS/EDGE/UMTS) and rollout concepts to gain experience before the full rollout starts. Rollout concepts vary from DIY via outsourcing to a complete turnkey solution. This means starting with the customer’s address, the result is an installed meter operated by a sub-contractor. In the new (meter) market model, grid operators are the asset owners and decide on how, when and where smart meters are installed, as long as the job, which should start in 2009, is completed in seven years. Energy supply companies have the opportunity to ask for priority installations for selected customers (e.g. bad debt customers or early adopters who want to pay for service offerings based on the smart meter). How this fits into an efficient rollout scheme driven by the grid operator is still to be decided.

NTA 8130-compliant meters are not yet available, so in the pilots smart meters that come closest to what the NTA 8130 aims at are being deployed, which include those from Echelon, IBM (OEM-ed from Enel), Landis+Gyr/Xemex and Iskra/Plan. At this stage, the unavailability of NTA-compliant meters is not a serious threat to the large scale rollout, but it is clear that manufacturers need to start up their production facilities soon. What is slowing them down is the risk that the current version of the NTA 8130 needs additional standardisation (the NTA-plus), which is still under review in Brussels. There are thoughts about possible co-manufacture with facilities in China, which would probably speed up the availability and choice of NTA-compliant products.

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Figure 2 – Functional overview of smart metering components in The Netherlands

Energy supply companies like Oxxio and Eneco still work under the current market rules where (until 2010) the customer (via his supplier) can select his own meter and measuring company. This allows them another two years to gain market share, create an innovative image and gain experience with the use of smart meter functions for their customer portfolio, without having to wait for the grid operator to complete the smart meter installation at designated customers. With such an integrated approach offered by the energy supply company, metering functions are provided as long as the energy contract stays with this supplier. Technology is based primarily on GPRS communication. Functions include prepayment, customer care and feedback concepts to provide accurate and near real time feedback on energy consumption and financial energy burn rate.

…4, 3, 2, 1 – LIFT OFF!
What stands out in the previous discussion is that there is little or no focus yet on innovation opportunities that arise from the availability of such a large scale intelligent device network that will extend into every home. This is a pity.

Although the rollout and the integration of smart meters in the new market processes is a challenging and demanding task for the energy companies, the true value of smart metering comes with energy efficiency programmes that lower impact on the environment, even with energy consumption rising, and postponed, shifted or avoided investments in the grid or generation. The energy companies or the ASPs are the first ones that can unleash this potential. First steps towards harvesting this potential are (near) real time demand response contracts, production facilities that work together in smart power grids based on decentralised control and signalling, and increased quality via detailed measurements to optimise grid investments. To fully unlock this potential, the unidirectional P1 customer interface described in NTA 8130 should be bi-directional, and the focus should be more on “smart” than on “meter”. There is an opening for this, because after two years the current NTA will be reviewed for effectiveness in accomplishing the aforementioned goals.

Jeremy Rifkin, famous publicist of the new hydrogen economy, recently argued that major shifts in society arise from the convergence of new energy systems with new communication systems (as happened with the 1st and 2nd industrial revolutions in the 19th and 20th century). Just as information today is produced at numerous places and shared in a distributed manner via the Internet, the 3rd industrial revolution is starting with the same thing happening to energy systems: (renewable) energy is produced everywhere and shared in a distributed manner, and energy can then be transferred to other areas during peaks or shortages in supply. Smart devices that not only measure, but also control this distributed energy network are a prerequisite to make this happen.