The benefits of the grid

“We see smart metering as not only a technical, hardware-related issue but also as a whole concept, and its targets needing understanding”
-Simo Makkonen

P&E. What is your definition of smart metering? How does it fit into the overall concept of the smart grid?
Simo Makkonen. We see smart metering as a concept for implementing infrastructure, systems and processes to enhance current end-customer services and to provide new services and tools for end customers to increase their energy consumption awareness, thus helping them in implementing energy saving activities. Smart metering also will offer utilities better understanding on their energy grid status and usage, as well as the possibility to remotely control end customers' energy usage, providing tools for enhanced network maintenance and use and to peak load savings.

We see smart metering as not only a technical, hardware related issue but also as a whole concept and its targets needing understanding. By having this view it would be possible to make feasible decisions on possible implementations and needed solutions. In addition, smart metering is also closely related to the other smart discussions such as smart buildings, smart homes and also smart grid, where we are talking on the same targets and possibly also partly on the same infrastructure and solutions.

Jens Björkman. From a billing point of view, smart metering really takes the industry to an online mode. It provides opportunities for new products towards the market and enables the possibilities to remotely control consumption and load-management.

Mark Ossel. Smart metering is too loosely defined, allowing essentially dumb communicating meters to claim the mantle of a smart meter. The correct definition of smart metering is that it is a 'system' for delivering dramatic improvements in utility operations, reliability and customer service by offering detailed usage information, demand metering, detailed power quality data, outage information, integrated disconnect switch, integrated customer premise interface and flexible billing options. Smart metering systems serve as the key information-gathering source and foundation for a smart grid that helps utilities better manage their operations, and customers better manage their energy consumption.

Smart metering is an essential part of the smart grid itself and leverages the grid. Any other sort of smart metering rides on top of the grid introducing risk, increasing complexity and adding cost. The essential thing about defining smart metering is that it's not just about the meter, it's really about the grid.

What benefits do smart meters provide to both consumers and utility companies?
MO. The consumer, and society in general, will benefit from smart meters and the smart grid, since they provide a way to achieve a decrease in energy usage by raising consumer awareness of the cost and impact of electronic devices in our homes and offices, and the real 'cost' of electricity. The combination of heightened awareness, an ability to track and manage use, and incentives will give consumers a sense of energy empowerment that they have never before experienced, and this will be huge.

By using smart meters by our definition, the distribution grid owner (DGO) will have ability to get more information from the low voltage network about both the consumer's energy use and the grid itself. The best of the smart meters, those that provide grid intelligence like power quality data, power factor, THD, frequencies and other measurements, will give DGOs better insight into the grid. A true smart grid will be able to respond to local and system-wide inputs, have much more information about broader system problems, and most importantly, able to react to or resolve problems as they occur.

JB. For consumers smart metering can increase the awareness of the consumption levels. For a utility company it brings completely new possibilities for product packaging, which could actually be used to lower the risk within the retail business. It also means that utility companies can create new value added services for the consumers to increase awareness and lower their consumption and costs, which in the long run benefits both parties.

SM. Concrete benefit to consumers would be billing based on real-metered energy usage compared to the estimate and correction based approach. In addition, other utility process-related meter data reading, like moving or changing supplier, should became more straight forward when up-to-date meter data is available - making these processes easier also to consumers. In addition, when consumers would get more detailed timely data from their energy usage their energy awareness would increase, creating good basis for implementing possible energy saving activities.

Utilities would be able to enhance their existing services and create new services to end customers making it possibly to increase customer loyalty and attract new customers. Having detailed, close to real time information on customers energy usage associated with the possibility to control customers energy supply remotely would provide utilities with tools for peak saving. They can gain savings in energy procurement costs and have better control on possible additional infrastructure investments.

What types of tools and solutions can utility providers use to streamline their automated metering processes?
JB. Within the IT domain it is time to kill the old CIS monolith systems. There are several best of breed solutions in the market for MDMS, billing and CRM, which from our point of view is the three main functions of the old CIS. It is important for the utility companies not to get stuck in their old business process or try to just adjust the old processes and systems to fit with the new business with smart meters and smart grids. To really grasp the opportunities of the new infrastructure the utility companies should create a new blueprint based on the new processes. The most important changes that the new systems/solutions must be able to manage is the continuous near real time flow of meter values through the MDMS and billing systems, as well as the very high data volumes.

It is also very important to be able to act upon the analysis made and change/create new products and pricing models. The number of products offered to the market will increase dramatically because of the data available for customer segmentation as well as the increased competitive landscape.

MO. First of all, a utility should look for a proven system, and not for just meters or parts of a system. Many utilities have a very meter-centric view of the world, and that's ok, because before smart metering came along, that's all that was available. However, today they and their customers are far better served by looking for a system consisting of meters, communication infrastructure and device management. Utilities need a system that fits their architecture independent of communication layers, current available or used technologies, and has the flexibility and interoperability necessary to provide new services or meet new market demands in the future without rebuilding or re-metering.

One thing to avoid is the trap that meter interoperability is a requirement to make the smart grid work. It is not. A specific, meter-level interoperability standard limits innovation and promotes point solutions that are inherently less capable than system solutions to metering. Defining interoperability only at the meter with a single technical standard will only raise costs for utilities and decrease the benefits to their consumers.

SM. During the smart metering implementation project, depending on the selected implementation approach, utilities would need tools and solutions to control implementation process - installation, logistics, testing and asset management - and update their related systems with necessary changes according to the meter installation progress. This would set new requirements to the existing IT system solutions and applications, especially concerning the capacity to handle large amounts of data and transactions. Therefore, prior to meter installation projects it is necessary to analyse existing information systems and applications, and make possible necessary adjustments to the IT landscape to implement new smart metering capable solutions. These are designed and proven to cope with mass meter rollout and other smart metering processes. An example of smart metering proven solutions is Process Vision GENERIS product that covers all the key systems and applications from meter data management and asset management to energy data management, billing and end customer extranet online service portals.

How do you see smart metering developing in the future?
SM. Currently, smart metering pilot projects are running on several countries to evaluate possible technical solutions. In addition, the European Union's 2020 target for end customer metering has been the driver in several countries to set national deadlines for implementing enhanced metering for consumers. Common for all these cases has been technical focus. New metering solutions have been implemented from technical viewpoints without clear understanding or vision on the new services to be implemented top of the new infrastructure. It seems that some of the implement new metering infrastructures are not 'smart enough' to enable new services and there will be a need for further infrastructure investments and upgrade projects in the near future.

We see that in the near future focus will change from technical implementation issues to the new services and solutions the smart infrastructure should enable.

JB. The frequency of collecting meter values is likely to increase with new system capabilities. Remote control for load management is another future option. Also meter values of water, heating and cooling will increase, and is a precondition for future deregulation of these markets. From a billing perspective this will increase the possibilities to create value added services with information about consumption cost (not only kwh) and notifications to increase awareness.

MO. Smart metering will be able to support initiating an automated demand response system within all households, which can optimize energy usage and cost for the consumer. It will be the starting point for home automation and will change the marketing and product offerings of energy retailers and trigger real grid management within DNOs.

Smart metering is an essential foundation for a sustainable future, achieved by smart grids, people, and government policy. Smart decision makers will not make purchasing decisions just to comply with European directives for the sake of compliance or in isolation from the real goal of a truly smart grid, but rather based on a desire to build a grander, smarter grid to better their business, empower and benefit their customers, and ultimately upon a belief that the right decisions will contribute to an improved future for the world.

Jens Björkman is CEO of TailorMade, and has been for the past seven years. During the past 13 years, Björkman has had many different roles on both the commercial and technical side of the telecom and utility software business. Björkman also serves on several boards.

Dr. Simo Makkonen is Managing Director of Process Vision Oy. Since 1990 Makkonen has worked for Pöyry, an international consulting company, before co-founding Process Vision Oy. As Managing Director for the last 16 years, he has expanded the company to take a leading position in the energy data management business.

Mark Ossel is Vice President of Energy and Utility at Echelon and is developing the energy and utility market for the company in Western Europe. Ossel is also a board member and treasurer of the Energy Services Network Association and the international Networked Energy Services usergroup, and is active in international standardization efforts.