Study: Energy savings one benefit of smart metering

Mountain View, Calif., April 12, 2010 – Against the background of escalating environmental concerns and rising energy prices, smart metering technologies have emerged as ideal solutions for utility companies striving to address these issues.

As the focus intensifies on energy efficiency, manufacturers are stepping up the ante to roll out devices that are capable of controlling and monitoring energy usage and supporting environmental initiatives. Global climate change is a major factor driving the urgent need for technological advances in the utilities industry.

The implementation of smart meters will provide environmental benefits, as reduced overall electricity usage will translate into emission mitigation. Moreover, all the facets of the entire electric system, from generation and transmission right up to distribution and consumption, will be enhanced considerably.

Analysis from Frost and Sullivan titled “Smart Metering–A Technology Analysis,” finds that smart grid is a multi-billion dollar market, which is expected to scale unprecedented heights in the near future. Smart metering is part of a global trend, indicating the shift toward a digital economy.

“Regulations aimed at improving energy efficiency constitute a major driver for this market,” notes Technical Insights Research Analyst Avanti Chitnis. “The demand that is being generated in the smart metering industry as a result of favorable government policies is creating tremendous opportunities for further investments.”

The smart metering industry in Europe is primarily driven by regulations and legislation. The European Parliament mandates require EU member states to have in place smart meters with 80 percent coverage by 2020.

Although the benefits of smart metering and the ultimate smart grid are numerous, there are some aspects restraining market progression. Despite the hype surrounding smart metering technology, utilities and consumers are wary about its adoption. This can be attributed to a lack of knowledge about this emerging technology.

The additional cost of $3.5 on utility bill in the United States, for instance, will stand in the way of deeper market penetration of smart metering. Technologies that are integral to a smart grid, such as smart meters, sensors, and communication networks, make the grid susceptible to attack from hackers. Interoperability issues have also proved challenging for market participants. While the introduction of smart meters paves the way for real-time availability of consumption/generation-metered data, the management of such high volumes of data remains an onerous task.

The operating benefits of smart metering and climate change are common across the globe; however, discrepancies exist in the communications technologies incorporated, standards, and regulatory environment. The diverse number of communication protocols has caused serious compatibility problems for utilities, suppliers, and consumers alike.

Considering the extent of interoperability that is required for efficient functioning of a smart grid, the establishment of technical standards on a large scale is very important. Appropriate management of meter data enables utilities to make predictions regarding the system load and usage, which, in turn, would help to avoid imbalances and reduce off-network purchases. Further analysis of this data helps to improve the system throughput and speed up the service restoration after power outages.

“From manual meter readings to realization of the smart grid, developments are continuously evolving,” observes Chitnis. “Smart meters represent the first step towards energy management and constitute an integral part of the bigger picture of the smart grid.”

“Smart Metering–A Technology Analysis,” a part of the Technical Insights subscription, provides an in-depth analysis of the market drivers and restraints, industry trends, and competitive environment in addition to the challenges and issues faced by market participants. Further, this research service includes detailed technology analysis and industry trends evaluated following extensive interviews with market participants.

Technical Insights is an international technology analysis business that produces a variety of technical news alerts, newsletters, and research services.

Frost and Sullivan enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company’s Growth Partnership Service provides the CEO and the CEO’s Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.


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