Smart Meters for Smart Grids

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<ul><li><p>ABIresearch Research Report </p><p>Smart Meters for Smart Grids Smart Meters, Advanced Metering Infrastructure, Home Area Networks (HAN), and Distribution Automation (DA) Technologies </p><p>Sam Lucero Practice Director, M2M Connectivity </p><p> Stuart Carlaw </p><p>Vice President and Chief Research Officer </p><p>NEW YORK LONDON SINGAPORE </p></li><li><p>Smart Meters for Smart Grids </p><p>ABIresearch </p><p> 2010 ABI Research abiresearch.com 2 The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. </p><p>Section 1. </p><p>EXECUTIVE SUMMARY </p><p>1.1 Making the Electrical Grid Smart Massive regulatory efforts and business investments are currently underway around the world to upgrade various countries electrical grids with significant new capabilities, specifically in the areas of increased network communications, remote and automated management of network elements in the field, and new power management functionality (distributed generation and power storage, including support for Plug-In Hybrid Electric Vehicles (PHEVs)). </p><p>Certainly, a key aspect to this upgrade to a smart grid is the deployment of millions of new smart meters by utilities around the globe, but particularly in North America, Europe, and certain countries in the Asia-Pacific region, namely Australia. The upgrade to smart meters involves not only the replacement of existing electromechanical meters with two-way communicating digital meters, but also the installation of significant new communications infrastructure in the field. </p><p>The communication technologies and network topologies being used in Advanced Metering Infrastructure (AMI) deployments to network smart meters range from fixed wireless and power line carrier technologies used to connected local clusters of smart meters in Neighborhood Area Networks (NANs) that are then back-hauled by various Wide Area Network (WAN) technologies, to connect each individual smart meter directly to public cellular networks. </p><p>In addition to smart meters and AMI, however, it is important to keep in mind that other vital elements of the smart grid include the deployment of technologies for Distribution Automation (DA) functionality, as well as for enabling electricity customers to have more granular insight and control over their energy consumption, a capability typically referred to as Home Area Networking/Demand Response (HAN/DR). The nascent market for HAN/DR technology, in particular, is drawing tremendous interest and attention, with Microsoft and Google only two of the more recent market entrants. </p><p>In summary, the key benefits that are typically sought through the development of the smart grid are: </p><p> Automated Meter Reads (AMR): Communication infrastructure connecting smart meters to the utility head-end enables the utility to remotely and automatically read the energy-consumption date recorded by the smart meter, typically in fifteen-minute intervals. </p><p> Demand Response (DR), Time of Use (TOU), and Critical Peak Pricing (CPP): DR is the customers ability to alter energy usage, either through signals (such as real-time pricing signals) to encourage voluntary customer actions and reduce power use at specific times or through direct utility control of electrical equipment, with the customers permission. TOU and CPP are pricing components of DR; TOU represents the regular variance of retail pricing based on the time in which the power in consumed while CPP denotes the variance of retail pricing based on exceptional periods of energy demand on the network. </p><p> Remote connect/disconnect: Remote connect/disconnect eliminates the required truck roll to the customer premises to initiate or deactivate power when a customer is moving into or out of the premises or for non-payment of utility bills. </p></li><li><p>Smart Meters for Smart Grids </p><p>ABIresearch </p><p> 2010 ABI Research abiresearch.com 3 The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. </p><p> Remote fault detection: Remote fault detection helps to speed restoration of service in the event of power outages. Traditionally, utilities rely on customer service center calls and exploratory truck rolls to find and repair outage incidents. That method increases customer dissatisfaction and support costs at the customer service center and in field operations. </p><p> Net metering: Net metering accounts for energy flowing back to the utility grid from a customer location as a result of distributed generation, such as from a customers rooftop solar panel array. When customers generate and return more power to the grid than they consume, they are often paid the difference by the utility. Smart meters help to facilitate net metering. </p><p>Key market adoption drivers and challenges for the smart grid include: </p><p>Market Adoption Drivers Market Adoption Challenges </p><p> Regulatory mandates Energy efficiency and reliability Operational efficiency Environmental concerns Improved customer service Reduced energy theft Energy market competition </p><p> Evolving standards landscape Project complexity Business case complexity Project cost Consumer acceptance </p><p>1.2 The Evolving Smart Grid Value Chain/Competitive Landscape The utility/smart grid value chain is complex and we show only a simplified overview in Figure 1.1. Overlapping sets of industry players target different smart grid application domains: DA, AMI (smart metering), and HAN/DR. Smart meter vendors (Itron, Landis+Gyr, Elster, and others) are active in the DA market to a certain extent, as well as their core AMI market. Technology vendors, who specialize in the communications portion of AMI but do not necessarily provide meters themselves, are sometimes involved in the HAN/DR market, as is the case with Smart Spring Networks and its acquisition of HAN/DR specialist Greenbox. However, focused DA and HAN/DR system vendors also serve their respective market segments as well. </p><p>In addition, Meter Data Management (MDM) vendors, such as eMeter, are increasingly important to the smart grid value chain as the flood of new meter reading data becomes available to utilities with smart meter deployments, thereby increasing their data management burden. Likewise, to coordinate the activities of numerous vendors in deploying complex systems and technologies, system integrators, such as IBM and Accenture, play a vital role in the smart grid value chain. Finally, although public network communication services providers, such as MNOs, MVNOs, and, in the case of HAN/DR, telco/broadband providers, are not absolutely necessary for the implementation of the smart grid, they are taking an increasingly prominent part in the market. </p></li><li><p>Smart Meters for Smart Grids </p><p>ABIresearch </p><p> 2010 ABI Research abiresearch.com 4 The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. </p><p>Figure 1.1 Utility/Smart Grid Value Chain </p><p> (Source: ABI Research) </p><p>1.3 Forecasting the Smart Grid Chart 1.1 shows ABI Researchs forecast of smart meters by region. Further detail is provided in Tables 1-1, 1-2, 1-3, 1-4, 1-5, and 1-6 in the accompanying Excel database file. Europe is currently the largest market for smart metering technology, and will remain so for the forecast period. However, other regions are expected to grow more strongly over the forecast period. Consequently, Europes overall share will decline by 2015. In particular, North America will start to see strong growth in the 2010 period and onward as key projects in several US states and Canadian provinces start hitting volume deployments. The Asia-Pacific region will see the highest growth rate over the forecast period, but this region is starting from a small base. Latin America and the Middle East and Africa are expected to remain marginal markets for smart metering throughout the forecast period. </p><p>Chart 1.1 Total Smart Meter Installed Base by Region, World Market, Forecast: 2008 to 2015 </p><p> (Source: ABI Research) </p></li><li><p>Smart Meters for Smart Grids </p><p>ABIresearch </p><p> 2010 ABI Research abiresearch.com 5 The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. </p><p>Section 2. </p><p>MARKET ISSUES </p><p>2.1 Introduction to the Smart Grid 2.1.1 The Market Landscape </p><p>This study examines the market dynamics impacting the deployment of advanced communications technologies used in conjunction with utility metering infrastructure and operations on a worldwide basis. Specifically, the study looks at the adoption of smart meters as well as communications to key Transmission and Distribution (T&amp;D) infrastructure elements as part of an overall deployment of smart grid technologies. ABI Research defines the smart meter for the purposes of this report as a meter capable of two-way communications to and from the meter and a utilitys head-end infrastructure. This definition is distinctly different from one-way Advanced Meter Reading (AMR) technologies, where the AMR-enabled meter communicates energy use measurement data only in a unidirectional manner to the utilitys head-end. </p><p>Figure 2.1 illustrates the conceptual landscape of the various infrastructure elements and technology segments comprising the smart grid. At a simplified level, electricity flows from the utilitys generation infrastructure, through various T&amp;D infrastructure, to the customers premises. DA denotes the use of communication technologies operating over WAN infrastructure to enable remote monitoring and control of T&amp;D equipment, such as Phasor Measurement Units (PMUs), switches, and capacitor bank monitors. AMI involves the use of smart meters communicating with utility head-ends through local NANs and/or WAN communication technologies. AMI benefits and network topologies are discussed at length in this report. HAN/DR technologies permit utility interaction with in-home devices, primarily to reduce peak load demand. </p><p>Figure 2.1 Infrastructure Elements and Technology Segments Comprising the Smart Grid </p><p>(Source: ABI Research) </p></li><li><p>Smart Meters for Smart Grids </p><p>ABIresearch </p><p> 2010 ABI Research abiresearch.com 6 The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor. </p><p>This study focuses on the use of smart grid communication technologies with electricity meters and infrastructure. ABI Research provides an overall forecast of gas and water meters (excluding heat meters, which are only a small portion of the overall worldwide installed base of meters). Advanced metering technology is being integrated into gas and water meters, but these are secondary markets with their own dynamics, vendors, and use cases. Such markets are oriented mainly toward simple AMR functionality. Typically, when gas and/or water meters are also present and the collocated electricity meter is being turned into a smart meter, the gas and/or water meters are connected via radio frequency links to the smart electricity meter, and through the smart electricity meter to the utility. </p><p>2.1.2 The Benefits of a Smart Grid 2.1.2.1 Automated Meter Reads </p><p>Smart metering is an outgrowth of unidirectional AMR. AMR systems have been available in the United States on both a fixed and mobile basis at least since the 1980s. Traditionally, utilities have employed meter reading personnel, either directly or through third-party contractors. Originally, readers visited each meter to manually scan the display and determine consumption since the last reading. This is an expensive operation to maintain, and can be potentially dangerous to the meter readers; for example, they could be attacked by a customers dog during an attempt to read a meter. Often, meter readings are estimated for several months before being actually checked. The use of wireless AMR, first to automatically download meter data to a handheld device and later to download meter data to a mobile utility van in a drive-by reading, has been the bridge to fixed RF AMR and now smart metering using either fixed RF or power line technologies. </p><p>2.1.2.2 Demand Response, Time of Use, and Critical Peak Pricing DR is the customers ability to alter energy usage, either through signals (such as real-time pricing signals) to induce voluntary customer actions and reduce power use at specific times or through direct utility control of electrical equipment, with the customers permission. TOU and CPP are pricing components of DR; TOU represents the regular variance of retail pricing based on the time in which the power is consumed while CPP denotes the variance of retail pricing based on exceptional periods of energy demand on the network. </p><p>DR is beneficial because it more closely links the retail consumption of energy to the wholesale cost and availability of that energy. Wholesale prices vary throughout the day and year, as well as in response to extraordinary supply constraint issues (called peaking generation) and outages. Yet, retail customers often pay a flat fee with no regard to when they use power. This imbalance is inefficient from an environmental resource allocation standpoint, but can also drastically increase a utilitys cost to provide power, and even put it in a temporary emergency position of not being able to supply adequate power, leading to blackouts and brownouts. While smart meters are not necessary for all DR programs, they certainly facilitate its implementation. </p><p>2.1.2.3 Remote Connect/Disconnect Remote connect/disconnect eliminates required truck rolls to customer premises to initiate or deactivate power when the customer is moving in or out or for non-payment of utility bills. </p><p>2.1.2.4 Remote Fault Detection Remote fault detection helps to speed restoration of service in the event of power outages. Traditionally, utilities rely on customer service center calls and exploratory truck rolls to find and repa...</p></li></ul>

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