As 2015 begins, it’s clear that smart meter investments around the globe will continue to play a key role in the transformation of electric utility grids. A new report by the Federal Energy Regulatory Commission (FERC) notes that the penetration of smart meters in the United States continues to climb. As those deployments have unfolded, utilities and industry stakeholders have gained valuable experience in integrating the latest technologies that enable new grid and consumer applications.
As the FERC report notes, smart meters enable a number of applications that enhance a utility’s operational efficiency, including remote meter reading, remote meter connections and disconnections, tamper and outage detection and notification, voltage monitoring, integration of distributed energy resources (especially solar PV) through net metering, and time-based rates. Advanced metering also provides demand-side benefits, such as deferred capital expenses, improved utilization of capital assets, reduced electricity generation, reduced environmental impacts, and more options for customers to manage consumption and lower costs.
Many of these smart meter benefits form the basis of what we described as smart metering 2.0 in Navigant Research’s free white paper, Smart Grid: 10 Trends to Watch in 2015 and Beyond. Installing meters – just the first step in transforming the grid – lays the foundation for enhanced consumer engagement, demand response capabilities, and overall utility efficiency. One recent example came from Pacific Gas and Electric (PG&E), which credited its smart grid technology for the quick return of power to half a million customers who had electricity knocked out when violent storms rumbled across Northern California in mid-December 2014. The company said it restored power to more than 95% of those customers who lost power in less than 48 hours.
Outside the United States, smart meter deployments will expand in 2015. In Japan, for instance, Tokyo Electric Power Company (TEPCO) is expected to accelerate its smart meter deployments as it attempts to install 27 million devices by 2020. Japan’s nine other major utilities will soon follow with initial deployments that will eventually lead to a total of 80 million smart meters nationwide by 2024. In Europe, France’s national utility Electricité Réseau Distribution France (ERDF) is expected to ramp up smart meter deployments as well, and deployments in Spain are expected to continue apace.
Best Laid Plans
But deployments don’t always go as planned, and schedules can get bumpy. In Britain, for instance, the rollout of smart meters was supposed to accelerate in 2015, but another delay has pushed back the massive deployment until 2016. In Germany, smart metering remains on a slower track since regulators said utilities can conduct deployments in a targeted way. And even in places where smart meters are now common, such as Ontario, Canada, the debate about their value relative to the cost continues.
Nonetheless, investments in smart meters and related grid technologies will expand in 2015 and in the following years (see Navigant Research’s report, Smart Meters, for a detailed forecast). New deployments will face challenges, especially large and complex ones like the one in Great Britain, which includes gas meters along with electric ones, and in Japan, where several communication standards are in play. Even so, the value of smart metering technologies is undeniable, and they will continue to be a foundational piece of future smart grids.