by Eran Eshed, Altair Semiconductor
In a world where everything is becoming smart, from smartphones and smart watches to smart homes and smart cities, having metering systems that require on-site readings by technicians is passÃ© and inefficient.
That’s why utilities were among the first vertical markets to implement machine-to-machine (m2M) communications solutions, leading us to today, where we are seeing a shift toward smart metering systems. Regulation supports this initiative. The EU Third Internal Energy Package (IME 3), for example, required member states to perform a cost-benefit analysis of smart meter rollout by September 2012. Where positive, member states were to prepare a timetable to implement smart metering systems “with at least 80% of consumers attached to smart electricity metering systems by 2020.” These regulations are being followed by countries such as the U.K., where the Smart Meter Implementation Programme has been put in place.
Machina Research projects there will be some 400 million smart meter connections by 2022.
What makes meters smart is not an advanced hardware design or extraordinary software functionality; it is their ability to operate in a grid and be controlled by smart central intelligence-in other words, connectivity to the cloud. This makes Internet connection one of the most fundamental features of smart meters, and it must be secure, robust and long-lasting. For these reasons, 4G LTE is a uniquely suited connectivity technology for smart meters.
Although the initial investment to convert conventional meters to smart meters is high, the return on investment (ROI) from the improved efficiencies gained by utilities and energy distribution service providers, together with the advanced and monetizable services that these companies will offer, will justify the investment.
The Consumer Angle
Consumers can benefit greatly from the two-way communication offered by smart metering systems. Smart meters in smart homes can communicate with appliances within the homes, and home appliances can benefit from the knowledge of smart meters. For example, appliances such as an icemaker can function only during off-peak hours of energy use. This two-way communication enables users to be more mindful of their energy consumption.
Utilities’ real-time and precise knowledge and control over individual home and neighborhood supply points will enable them to minimize power outage time and provide a higher-quality and more personalized service to consumers.
Finally, consumers also can enjoy more precise billing because meters are read in real time rather than bills’ being prorated.
The Utility Angle
Smart metering benefits utilities through lower operating costs. Fewer employees are needed for meter reading and routine maintenance. For example, because smart meters can provide notifications if there is a problem, personnel are sent only when needed.
In addition, old metering systems are more susceptible to tampering and manipulation. A utility could send a technician to read a meter, but there would be no clear way to know if there had been tampering. With smart meters this is nearly impossible, so there is a significant decrease in energy theft.
Smart meters also offer more efficient energy use. Two-way communication can reduce peak consumption of energy by shifting demand loads.
The Regulator/ Government Angle
With smart meters, regulators gain more control over electricity, an expensive, important and limited resource.
With more knowledge and control over smart metering systems, regulators can better assess and monitor what utilities charge users and can ensure adequate quality of service.
Increased knowledge of how and when energy is being consumed can save money for consumers and utilities.
This is because smart meters increase efficiency and can lower excess usage.
With regulator initiatives such as the U.K.’s Smart Meter Implementation Programme, entire countries can experience increased efficiency and lower usage, which can benefit economies and help them become greener.
Communication Technology in Smart Metering
Two main smart metering architectures exist:
1. Smart metering endpoints connected via technologies such as ZigBee, Power Line Communications (PLC) or mesh architectures such as 6LowPAN that are connected to the cloud via an access hub, which in most cases use cellular technology for access; and
2. Integration of a cellular chip or module into each metering endpoint.
Aggregating several sensors into a single access hub is a flexible architecture; however, it is not flawless.
The usage of technologies such as PLC and ZigBee are not always reliable and impose physical constraints in the maximal distance between meters or between a meter and the hub. In addition, the cost of the hub eventually offsets the cost upward.
Integrating cellular connectivity into each meter is the simplest and most flat architecture. It provides maximum flexibility because no intermediate aggregation points are required. This reduces cost, simplifies communications protocols and enhances reliability and security.
Cellular Overcomes Shortcomings of Short-range Communications
The question then becomes, “Which cellular technology to use?” There are 2G, 3G and 4G LTE networks, but 2G networks are coming to the end of their life cycle. AT&T Wireless and Verizon announced they will decommission their 2G networks. As 2G networks shut down, carriers will re-farm the available spectrum for use in either 3G or 4G LTE networks; however, carriers that are looking for a long-term solution likely will choose 4G LTE for this spectrum reallocation because 3G networks are inefficient and costly. Moreover, the world’s major carriers are investing heavily in 4G LTE, so maintaining 3G networks while rolling out 4G LTE networks is not cost-effective. That leaves us with 4G LTE.
There are three primary market-drivers for the adoption of LTE-only in smart metering:
- Long-term usability;
- Spectral efficiency; and
- Investment of mobile network operators.
LTE technology was designed for long-term use. As utilities switch to smart metering systems, they will want a technology that will be reliable for at least the next decade. Smart meters with LTE chips or modules will be effective well into the 2020s.
Because m2M applications such as smart metering require smaller amounts of data transmission, LTE offers much better spectral efficiency, meaning many more smart meter endpoints can be serviced on a given chunk of spectrum.
Finally, mobile network operators (MNOs) have every interest in becoming major players in smart metering connections. Given the exploding market for Internet of Things (IoT) applications, the only way for MNOs to benefit is by providing the pipes of connection. As such, we are seeing huge investments by MNOs in launching 4G LTE networks.
Last year, Verizon announced that by late 2014 it would be weaning users off of aging 3G networks and that smartphones released by the carrier would be compatible only with LTE networks. This is good news for users, as well, because an LTE-only option cuts out royalty payments to 3G technology patent owners. Although Verizon’s switch to LTE so far applies only to its mobile users, the move to LTE only likely will hit its m2M users eventually, as well. And we likely will see the same trend with other carriers worldwide.
There is also a tremendous benefit for utilities to pass on the burden of connectivity to MNOs or mobile virtual network operators (MVNOs) who specialize in communication technology. MNOs such as Telefonica, Vodafone and AT&T already offer end-to-end connectivity and management platforms for the utility market.
Alternatively, utilities can outsource this task to energy management companies such as Kore Wireless and Wyless, which offer wireless backhaul services and Software-as-a-Service (SaaS) management platforms.
These companies purchase airtime from carriers and then offer cellular connectivity to utilities.
The companies often receive better rates from carriers in various countries than utilities could negotiate on their own.
The final piece to widespread adoption of LTE in smart metering applications is an LTE chip that is optimized for m2M use.
This chip needs to be small with low power and low cost to compete with alternative technologies. With an m2M optimized chip, the cost of integrating these chips or modules into every smart meter endpoint becomes negligible.
The world is shifting to smart meter usage; however, the way these smart meters communicate with one another, consumers and utilities is still in process. Still, using cellular connectivity for metering, particularly 4G LTE, makes the most sense because of its low-cost, high-efficiency, long-term capabilities and the backing of MNOs.
When these smart metering networks are fully deployed with the optimal technology, we will see the widespread benefits for all involved.
Eran Eshed is co-founder and vice president of marketing and business development for Altair Semiconductor, a provider of single-mode LTE solutions.
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