The rise of smart meters

There is no doubt that smart meters are infiltrating the market at a lightening pace, and with that in mind, Frank Borchardt, Head of Smart Metering at EFR, explains how to better manage a smart meter rollout programme, the true picture of costs and the tough implementation and data protection challenges involved.

Back in April 2009, European politicians voted to roll out smart meters in every building across the continent by 2022, and set an 80 percent installation target for 2020. The smart meters relay information about household electricity use and prices to consumers, who can then alter their habits to cut energy bills by around 50 percent. Smart meters offer the opportunity to cut costs and improve energy efficiency and the deadline is certainly achievable, so what's the catch?

There are some key operational and logistical changes that still to be addressed in the move to smart metering, explains Frank Borchardt, Head of Smart Metering at EFR, a joint enterprise comprising E.ON, N-ERGIE and EnBW. Having previously admitted that a smart meter rollout was much more than simply hanging meters on walls, Borchardt explains that the first logistical challenge is all about managing the programme in a smooth way, before ensuring an efficient, open and transparent pathway of communication. "You need to access all customer's premises at the same time in order to manage the program in a smooth way - it's a nightmare if you roll out the meters down the street and half of the customers aren't in, because you will not have access to properties and so on. Then of course you have to operate the meter. Everything from meter reading to load profiles and status information must be monitored, processed and forwarded; it doesn't make sense to run a meter that gives you a wide range of information that can't be utilised. So, there's a huge investment and operation effort necessary in creating a smart metering system that functions correctly."

IDC analyst, Rick Nicholson has pointed out that the utilities industry has been talking about smart grids and meters for some time now and admits that the discussion has recently become very much public property. So has this public awareness changed the impact on the utilities industry? Borchardt believes that it has very much so. "When I entered this business in 2003, providing AMR services to residential customers was a very strange idea. Two years later the idea had settled a bit and we had a project very much focused on smart metering - although it was a different experience from market to market. While we were preparing this in Eastern Europe, my colleagues from Germany laughed at me and said that they didn't have problems with fraud or unpaid bills so why should they change the network operation."

A further two years down the line and the situation changed yet further as public discussion around energy conservation and cost reduction grew. "Today utilities are heavily driven by this public opinion and have accepted that this is an issue for society - these companies have to position themselves alongside these issues."

While many proponents of smart metering have pushed the cost saving advantage, Borchardt believes that although there are indeed a number of cost savings there is more likely to be a reinvestment of costs. While automated processes have reduced outgoing spend, communication and implementing revolutionary interoperational technology have bumped costs back up. However, Borchardt believes that the shift of costs is simply a necessity: "In certain situation it could be an additional cost, but in that case if it burns money, it burns money - the only thing you can do is burn your money in the most clever way, by limiting the risk and loses."

Intelligence
Today's smart metering solutions are perfectly designed for meter data management and communication, essentially with narrow bandwidth but not for demand response or demand side management. Borchardt believes that there is not necessarily any need for the data side to act on demand, although there are issues on the communication side. "The systems are perfect for data management and collection and it can be downloaded at night, for example," he says. "But customers demand access to communication. Each customer has got a meter and each customer must be read and billed individually. And there are customers signed up for contracts and joining demand response or management programs and need a fast communication infrastructure. For that reason, broadband broadcast channels down to the customers are designed for fast downstream communications and should be open to the full network of customers."

Peter Johnson. Vice President for Utilities at Alcatel-Lucent, has recently said that many problems in utility networks arise from a rapid shift in the demand on the existing inflexible infrastructure. He believes that intelligence is needed to be input in networks for real-time communications among network elements and to enable access to millions of meters. While there is no doubt that the utilities industry is looking to make better use of information and communication technologies (ICT), Borchardt believes that it is key that utility companies consider what they want to achieve the communication.

"It's like the division between metering and demand response; I agree that you need much more flexible ITC infrastructure for companies today, however, I can't agree that you need real-time communication to all of your meters - what would be the purpose?" he asks. "If there was a need to access all the meters in real-time that it would be right, but you don't want to access all the meters, you want to access your customers in real-time through a communication channel, not through the meter."

Bordchardt goes on to explain that the ITC infrastructure needs to be used in a very different way to how utilities are using it today and goes back to his point that it needs to be clear from the start what the company is looking achieve. "If they have considered what they want to do then they can select the perfect technology to accompany it," he adds.

Another ITC challenge has been around the new IP networks, which currently present a reliability problem for the industry because they cannot guarantee security for utilities as they are unable to endure end-to-end delays of more than 30 milliseconds. "This is actually very good quality for this business," explains Borchardt. "If you compare five years ago to today then you can see the huge improvement in reliability and in the speed of communication infrastructure, and the only thing we can do today is to keep thinking back to these improvements. We've also been splitting up our solution. The blueprint for the devices, meters, relays and switches will stay the same for say 10-15 years if possible but the communication technology will change as frequently as the telecommunications industry, so every one to two years we'll see the next generation of technology. The only thing we can do to mitigate this and attempt to future proof is to be flexible and exchange the communications following the speed of innovation in the industry."

It is not just concerns around reliability that are issues for consumers who remain increasingly worried about data protection and security. Borchardt explains that the main concern is that it becomes crystal clear for the utility, and anyone else who can access the data, that consumption patterns are recorded in a very distinguished way. "Anyone can see when I wake up, when I switch on the coffee machine, when I go out for a walk, when I get, when I switch on my TV," he explains. "If anyone gets hold of this information it is simple to interpret."

So what is the interest in different consumption patterns and analysing the customer's behaviour? The customer is really the only one who should have any interest in this data, explains Borchardt, in order to change behaviour and make cost savings. "I'm not convinced that any utility company would like to have all this detailed information - they are maybe interested in the load cuts of the consumer, but they should ask the consumer if they want this information and then it's the duty of the utility company to provide a secure connection to the customer and shield it against any abuse. I don't believe that there is any need to use a public communications channel, it's much better to use the infrastructure that is already in place for the metering systems, technology like narrow band PLC, for example."

The issue first and foremost is how to protect the data from abuse, says Borchardt. "The internet is secure for internet banking and the security mechanisms and extremely efficient, but it does cost money if you would like to introduce such security mechanisms for millions of meters, even simply shielding the communication on a power line that no-one has access to.  This is the perfect way to secure the data today. Tomorrow, maybe there will different, and better, ways to sure it, but first of all you must be aware of who wants this data and the best way to provide the information to the recipient."

With smart metering the first step to a smart grid, Borchardt, believes the next step will be providing the consumer with the tools to analyse himself and shift some load to improve his home, control appliances and react to incentives. "We need ways and tools for interaction and that is based on the information you generate from the meter, and beyond that provide the customer with tools to work with this information," he concludes. 

Europe: A pioneer of smart meters

Smart meters have taken off in Europe with the installed base of smart electricity meters in the continent growing at an annual compound rate of 16.2 percent between 2008 and 2014, reaching 93.6 million homes over those six year, according to Swedish analyst firm Berg Insight. And based on this level of uptake, Europe is on track to reach its target of 80 percent of households with smart meters by 2020. So far, Sweden has become the first country in the world to achieve a 100 percent penetration for smart meters, driven by the country's decision to make them mandatory from July 2009. 

Italy has also been regarded as a pioneer in smart metering. Indeed, in the early 2000s Enel, the country's biggest utility, started installing smart meters in most households so that it could clamp down on theft and cut off non-payers remotely. Between 2000-2005 it connected over 27 million customers with integrated bi-directional communications, advanced power measurement and management capabilities, an integrated, software-controllable disconnect switch, and an all solid-state design. They communicate over low voltage power line using standards-based power line technology from Echelon Corporation to data concentrators at which point they communicate via IP to Enel's enterprise servers. Enel has estimated the cost of the project at approximately €2.1 billion and the savings they are receiving in operation of €500 million per year, an astonishing four-year payback.

Sources: Climatelab.org; telephonyonline.com

Smart meter: Fast facts

According to Berg Insight, the installed base of electricity meters in Europe will grow at a compound annual growth rate of 15.6 percent between 2008 and 2013 to reach 81.2 million at the end of the period. The company's latest research also found:

• 60 million smart meters will be in place in Europe by 2012
• 35 percent of Swedish electric meters will be connected to mobile networks
• 62 percent of consumers planned to save on their power bills by wearing heavier clothing
• Nordic countries plans to have five to eight million electric meters connected to GPRS by 2010

Source: itfacts.biz