|Smart meters could provide utilities with benefits including improved life for their assets|
|Gyan Mohaptra principal consultant, Infosys Utilities Practice
For many years, smart metering was hotly debated by utility companies, governments and customers alike.
Whether discussions focused on who should pay for its infrastructure or the long-term benefits of its implementation, smart metering attracted both critics and supporters.
However, while many were busy debating, smart meter implementations – or at least the preparations for them – progressed rapidly. In recent years, the growing number of Advance Meter Infrastructure (AMI) rollouts, along with the initial networks needed to collect and analyse the data generated by individual smart meters, have helped demonstrate the collective potential of large-scale smart meter implementations.
In California, for example, the largest utility companies have estimated overall AMI savings as ranging from $762 million to $2.4 billion. In the UK as well, major utilities have identified several key AMI successes during the Energy Demand Research Project trials, such as active customer involvements in energy usage visualisation and subsequent information-based decision making, which will contribute to significant savings.
These successes, among other factors, have started to change industry attitudes towards smart meters and there have been several strategic acquisitions, such as Siemens taking over eMeter and Itron taking over SmartSynch, suggesting that the industry is gearing up to take advantage of smart metering roll-out.
However, while big steps in smart meter implementation have been made, there is still some concern over whether the short-term investment will outweigh the long-term benefits.
A smart revolution?
For utilities and their customers to truly benefit from smart meters, they need a better understanding of what benefits are on offer and how to truly take advantage of them.
One of the biggest benefits of smart meters is the potential they have to revolutionise customer services. Each year, utilities invest a huge amount in various customer service functions and it is a constant endeavour to reduce the cost, while at the same time improving customer satisfaction. In open markets, utilities invest a lot in customer retention. Similarly, in regulated markets, utilities invest in avoiding penalties from customer complaints and gaining credits for higher customer satisfaction scores.
By implementing smart meters, utilities can cut costs of operating field services. Smart meters provide remote connect, disconnect and meter reading functionalities that reduce the need for field trips. This often has a positive impact on customer satisfaction due to faster SLAs for services. One of our utilities customers in the US has reduced 750 000 field trips in one year by deploying smart meters, giving a projected saving of $80 million in six years.
|Smart meters could revolutionise customer services
Apart from providing remote meter reading functionality, smart meters also offer daily register and interval reads. Utilities therefore have the data to bill any customer on any day, reducing the need for estimated bills. This not only helps in the cash flow, but also improves customer satisfaction as no one likes surprises.
Smart meters also offer customers greater access to their usage information, so they feel more empowered. With more analytical functions available on self-serve portals than ever before, customers do not feel the need to contact the call centre, which helps to improve satisfaction while also reducing operations costs.
Another utility where we have implemented a smart metering solution was able to reduce customer calls by 12 per cent over one year and the portal access in the same period increased by 20 per cent.
Maintaining energy supplies
Service reliability is critical and utilities invest significantly to ensure their grids are reliable, helping to avoid the heavy penalties associated with a power outage. Smart meters provide better control of distribution assets and utility companies have tools to monitor the assets remotely and one obvious benefit is quick restoration after outage.
Using smart meters, utilities not only detect the outage as soon as it happens but can also quickly identify the problem and dispatch the crew appropriately. In the past, the crew used to spend a lot of time identifying the cause of the outage and sometimes had to make multiple trips to finally fix the problem. With smart meters, the crew knows exactly what needs to be looked at, resulting in a huge operating cost reduction.
Another tangible benefit that smart meters provide is improving the life of distribution assets. We implemented an analytical solution for a large US utility customer to monitor the health of distribution assets using the hourly data from smart meters. The company used the dashboards and reports to take proactive action on overloaded assets and increase the life of the assets. This helped avoid cost of replacing assets under failure and in turn, helped minimise service disruptions.
Regulators are getting stricter with greenhouse gas (GHG) emissions and many governments have introduced carbon credits.
The EU’s 20-20-20 policy sets clear targets on GHG emission reduction and focuses on renewables energy supplies. Utilities are already feeling the heat and are being forced to take steps for increased renewable generation and improve energy efficiency. Smart meters provide direct, as well as indirect, benefits in promoting clean and green energy. We worked with a utility in piloting solar generation for residential customers, where hourly data from smart meters was used for billing customers and providing incentives.
Another huge benefit is promoting energy efficiency and implementing various demand-side management programmes. Smart meters allow utilities to offer energy management on their portal, so residential customers can adopt Time of Use tariffs, which allow them to shift energy usage to times when demand is lower, such as late at night.
Holding back adoption
Though the benefits speak for themselves, smart meters alone are not sufficient to give the desired return on investment that utility companies need to make their implementation viable. Smart meters are the data source, but the key to unlocking their value lies in having the solutions that make up the entire ecosystem.
This starts with having a robust communications infrastructure to backhaul the data which is so key to achieving the benefits outlined earlier. Without taking the steps to implement a robust communications infrastructure that enables data to be quickly communicated to multiple departments, utility companies will have no way of understanding the priceless customer information on offer.
Implementing the right meter data management solution is vital, as it holds the key channeling meter data to all other systems, such as sales and marketing or site maintenance. But utilities must be careful to find the right balance between functionality and not overload the application with too many configurations and rules. This risk here is while the utility is trying to get as much data as possible to all departments, the performance suffers and other applications do not get the data in time for downstream processing.
The next critical consideration is the integration architecture. It is very important that various IT systems must be able to seamlessly access smart meter data in the long term. Utilities can sometime be more focused on the immediate future and end up having to redesign their IT architectures when new functionalities are added at later dates.
Lastly, but maybe most importantly, having the right tools to analyse the data collected from smart meters is vital for any successful implementation. In its raw state, data has no value, and it needs to be ‘translated’ in order to turn it into valuable information.
Smart meters generate a huge volume of data, which can also be immensely complex, that some people have started calling ‘Big Data’. While we have seen Big Data challenges in retail and financial sectors, it has only recently become a concern for utilities. Having the right analytical tools is vital to help utilities tackle this new challenge and make the most of their customer data.
Will the future be a smart one?
The smart grid that we see today will undergo many changes in the future and many innovations will come its way, so utility companies need to be able to easily and cost-effectively integrate new product and system innovations.
As long as utilities take a joined-up approach to smart meters and have a clear roadmap, the benefits for both businesses and their customers are considerable. While there may still be scepticism about smart meters being a ‘dead investment’ or an unjustified cost, we believe that in the long term, utility companies will realise their value and the benefits will outweigh cost.
An additional benefit is that utility companies can use the resources which are generated by the operational saving smart meter implementations offer, to fund alternative implementations which positively benefit the business, such as research and development.
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