Navigant Research Blog

Aquifer Discovery Could Ease African Drought

— October 4, 2013

A major discovery of aquifers in North Kenya has the potential to improve the lives of thousands of people in the region ‑ and the underground reservoirs could become test beds for new smart water system technology.

A total of five aquifers have been located below the surface of the country’s drought-prone northern region.  The Lotikipi Basin Aquifer, which is estimated to be about the size of Rhode Island, and the smaller Lodwar Basin Aquifer were found by using advanced satellite technology and later confirmed with conventional drilling.  The other three aquifers still must be confirmed by drilling.

The five aquifers hold a minimum of 250 billion cubic meters of water, or roughly 66 trillion gallons, say officials with Radar Technologies International, the natural resource exploration firm that detected the aquifers.  Rainfall refills these aquifers with about 3.4 billion cubic meters (898 billion gallons) each year.

Windfall of Water

The water exploration project was a combined effort of the Kenyan government and the United Nations’ scientific and cultural agency, UNESCO, with financial support from Japan.  More analysis is needed to determine precisely how much water exists among the aquifers, as well as the quality.  If the amount is as abundant as first thought and the quality acceptable, the aquifers could support extensive irrigation systems and industrial development and provide drinking water for the region.

Officials are hopeful the find will become a boon to people in the area.  Gretchen Kalonji, UNESCO’s assistant director general for natural sciences, said in an agency statement that the discovery “clearly demonstrates how science and technology can contribute to industrialization and economic growth, and to resolving real societal issues like access to water.”

One of the big challenges will be securing the investment money needed to build and maintain a distribution system that efficiently distributes the water to those who can use it.  Another hurdle involves geography and regional conflicts.  The aquifers lie in a remote area afflicted by tribal warfare where rival groups compete for scarce resources like water and cattle.

Although these newly discovered aquifers hold the promise of relief for the people in North Kenya, the government and water utility managers must now make sound investments in basic infrastructure and smart metering and monitoring technologies (as noted in Navigant Research’s Smart Water Meters report) to deliver on that potential while also sorting out tribal differences.  If the Kenyans can work out these difficult issues, the result could be a model for other regions where perhaps yet to be discovered aquifers exist that could help reduce the pressures of dwindling water supplies.


U.K. Smart Meter Deal Gives L+G Smart Meter Lead

— September 25, 2013

Meter manufacturer Landis+Gyr (L+G) struck gold last week with a mammoth deal valued at $956 million for the delivery of more than 10 million smart meters to British Gas (BG) during the next 6 years.  The nearly $1 billion contract provides L+G with a well-defined runway for its business and pressures competing meter manufacturers to come up with similar transactions in the deregulated energy market in the United Kingdom.

Under the terms of the deal, L+G will be the majority supplier of smart meters to BG, the leading energy supplier in the United Kingdom.  BG plans to install a total of 16 million smart meters in customers’ homes by 2020,  the deadline year imposed by the U.K. government for all homes throughout Great Britain to have smart meters installed.

The Competition

With the announcement of this deal, both companies will be adding employees.  L+G, which is owned by Toshiba Group, expects to double its U.K. workforce to 1,200, as well as expand its manufacturing facilities.  For its part, BG will hire 500 additional workers to install the meters and provide energy efficiency advice to customers.

British Gas has installed more than 1 million smart meters in homes so far.  It leads its rival energy suppliers as it tries to solidify its position as an innovator ahead of the massive rollout of smart meters set to begin in 2015.  The strategy seems to be working, as suppliers I’ve talked to say BG has seen a reduction in customer churn because of the new meters, which tend to increase customer engagement.  Also, the company estimates customers save about 5% on annual energy bills after the new meters are installed.

The deal between BG and L+G was not a big surprise; the companies have been working together on smart metering for a couple of years.  Competitors like Itron, Elster, and Sensus will have to continue looking beyond BG for smart metering deals in the United Kingdom.  Energy suppliers like E.ON UK, npower, ScottishPower, and SSE will be the likely targets for these competing meter makers hoping to win a share of a market that will eventually total some 50 million smart meters by the end of 2020.


Cities See Smart Water Benefits

— August 12, 2013

The city of Dubuque, Iowa has embraced big data for its water and electric systems and has become a model for other midsize cities to emulate.

In particular, Dubuque’s water story is compelling.  In 2010 and 2011, every household in the city got a new water meter.  The city’s water utility partnered with IBM on the project to help evaluate the data coming from the new meters and to gain a deeper understanding of water consumption.  Results from Dubuque’s year-long pilot study, which tracked a portion of residential customers who used a related Web portal, showed the following:

  • 77% of these customers said they increased their understanding of their water usage
  • 70% said using the portal helped them evaluate changes they had made in usage
  • 48% said it helped them conserve water
  • 61% said they took some action to reduce consumption (e.g., took shorter showers, fixed leaks)
  • 48% said they planned to make additional changes to water equipment or how they use water

Based on these results, the water utility estimated it could achieve a 6.6% overall decrease in water usage and an 8-fold increase in leak detection and response.  Moreover, the data indicated the annual overall savings could be $191,000 across the system.

Similarly, the midsized city of Nashville, Tennessee has installed new water meters and recently chose MeterSense for its meter data management system.  Results are not available yet for Nashville, but utility managers expect to see similar benefits: more accurate bills based on current usage, real-time consumption data, the ability to better detect system leaks, a reduction in unaccounted-for consumption, and the ability to automate the process of activating and deactivating customer accounts.

Both Dubuque and Nashville represent the next wave in smarter water systems.  Big data obviously plays an important role, but so does customer involvement.  New meters and data analysis are only part of the picture; customers themselves need to engage as well if the anticipated benefits are to reach their full potential.  For more on these expanding capabilities, please sign up for and attend Navigant Research’s upcoming free webinar titled Intelligent Water Networks, which will take place August 13 at 2 p.m. Eastern time.


Why France Is the Next Big Smart Meter Market

— July 8, 2013

France will be the next focal point for the smart meter industry.  All that needs to happen is for the government to announce final details of a tender plan, and the country will enter a rollout phase that will involve 35 million smart electric meters, covering essentially every home in the country and lasting through 2021.  A decision is expected soon, perhaps as early as mid-summer.

The new meters will be deployed in two phases.  Phase one calls for 7 million smart meters – dubbed Linky – to be installed in homes starting in 2014, with the remaining 28 million smart meters to follow in the second phase.  The estimated value of the long-term deployment is between $6.7 billion and $9.3 billion.

The big question among smart meter vendors is who will win orders from ERDF, the French utility that oversees the power distribution network in France that covers nearly all of the country’s electricity customers.  ERDF is expected to choose multiple meter vendors, and Itron, Landis+Gyr, and Elster appear to be the most likely winners, according to industry insiders.

Mais Oui

I got a preview of this big deployment when I attended the SG Paris 2013 conference in early June.  Hardware vendors are optimistic, as the French deployment represents one of the largest smart metering opportunities anywhere in the world, outside of China.

There is some concern about how France’s famously prickly consumers will react to the new smart meters.  During the conference, I took part in a panel discussion on the subject of business-to-consumer relations between utilities and their customers, and the general view is that French consumers will have little choice but to accept the meters, with government regulators monitoring any pushback.  So, the next major smart meter rollout looks like a fait accompli, at least for now.


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