By Jesse Berst
Until recently, North America has been the hotbed of advanced metering. There have been metering rollouts in Italy, Scandinavia and elsewhere, but at least 80 percent of all sales have been in the U.S.
Now, there are strong signs advanced metering is gaining steam in other regions. For instance, China has approved several advanced metering standards in the past few months. And Australia’s Bayard Group continues its global acquisition spree, most recently snapping up Atlanta-based Cellnet.
If this trend takes off, it could have a major effect on what kind of meters you buy; who you buy them from; and how much you pay. Other regions will have a much bigger say in which technologies are favored, which standards are adopted, and which vendors succeed.
As a reminder, when I talk about smart meters, I am not referring to AMR or one-way systems. The three functions that make a meter truly smart are:
- The ability to take interval measurements,
- Automatic transmission of the resulting data, eliminating the need for manual reading, and,
- Two-way communications: the ability to both “listen” and “talk.”
The Wisdom of (Smart) Crowds
To better understand metering’s future, my firm conducted a Delphi Roundtable of more than 100 European metering experts. For those not familiar with the Delphi methodology, it was developed about 40 years ago by the RAND Corporation. It is not a survey of random individuals. Instead, it is expressly designed to gather insights from a panel of experts. After all, if you’re trying to gain the wisdom of crowds, shouldn’t you talk to the smartest possible crowd?
Our crowd of European experts believes smart metering is approaching a tipping point.
For instance, two-thirds of our expert panel believes the European Commission’s Smart Metering implementation plan will be adopted and applied in their countries. About one-third thought it would be under way within three years, with a similar percentage believing five years more realistic.
More than half of our experts believe smart meters will become the primary meter type for major utility purchases (both new and replacement). Widescale rollouts will come first in urban areas, following later in rural areas and remote regions (islands, etc).
Prices Heading Down
I was particularly interested to hear what these insiders thought about prices. About one-third predict a 50 percent price drop is likely within three years. About 40 percent agree on the drop, but think the reduction will be closer to 25 percent to 30 percent.
Higher volume will be the biggest factor, given that regulations are forcing larger roll-outs and mass installations. Other drivers pushing down prices are the continuing advances in technology (Moore’s Law), and the possibility of an “ideal” specification that will lead to price reductions for region-wide “standard” types. Competition from smart meter vendors in Asia and Eastern Europe is also lowering prices.
What kind of meter will you be able to get for that lower price? Our panel agreed that upcoming European roll-outs will create a higher demand for integrated solutions, especially built around open-not proprietary-standards. Many felt this trend would result in a single “integrated” meter that combines many functions (and multiple communications protocols) into one unit. But an equal number instead believe that standards are emerging around plug-and-play modules. Standardized modules would bring lower prices while still allowing flexibility and semi-custom configurations.
And what about the potential for firms such as the Bayard Group to create “mega-companies?” Here our experts were widely divided. Many feel meter manufacturers will consolidate down to only 3 to 5 major global players. Many others, however, believe interoperable standards and protocols will allow more suppliers to exist and profit. And some feel country-specific requirements will continue, possibly even with preferences for local companies.
North America has been driving the smart metering bus for many years. A leadership role is certain to continue, especially considering rollouts planned or under way in places such as California and Ontario. But it is wise to remember that many other countries have a more centralized, less balkanized electric power industry. At roughly 27 million units, Italy’s Enel smart meter rollout was nearly twice the size of anything contemplated in the U.S. Installations at that scale will have tremendous influence over such things as communications platforms, protocols, standards and technical approaches. If our expert panel is correct-if smart metering is soon to accelerate in Europe-then the smart meter of the future could conceivably be manufactured in China to European preferences.
Jesse Berst is managing director of GlobalSmartEnergy, which conducts Delphi Roundtables for vendors, agencies, laboratories and other organizations that want to know what the future holds for clean, smart energy. You can reach him at email@example.com.