Navigant Research Blog

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.

 

Trilliant Takes Smart Grid Lead in Great Britain

— July 8, 2013

Despite the recently announced delay in the mass rollout stage of smart meters in Great Britain, smart grid technology vendor Trilliant continues to land new business there.  Redwood City, California-based Trilliant has signed a new contract with utility RWE npower to supply hardware and software during that utility’s first phase of smart meter rollouts.

The deal calls for Trilliant to provide its head-end software platform (called UnitySuite) and the in-home communication hubs that link smart meters and home area networks with RWE npower’s smart grid infrastructure.  The value of the contract with RWE was not disclosed, but Trilliant said the deal will make it the largest provider of in-home communications solutions in the country.

The deal extends Trilliant’s solid foothold in the British smart meter market: Trilliant has been supplying smart metering communications gear to British Gas for several years.  Now, with a second major utility buying its products, Trilliant is poised for a strong run in Great Britain where a national mandate calls for up to 50 million smart meters (both electric and natural gas) to be deployed by the end of this decade.

In the Hunt

Trilliant aims to be at the forefront of this first phase of Great Britain’s smart metering – called the Foundation Stage – so that when the mass rollout begins in a couple of years, the company will have learned the hard lessons that can help it and its utility customers stay ahead of competitors.  The competition promises to be stiff: the multiyear, countrywide upgrade to smart meters is valued at some $17.8 billion.

With that much money at stake, many smart grid technology vendors in addition to Trilliant are focusing on Great Britain as the next big opportunity.  It’s a complicated process, however, with the Department of Energy & Climate Change (DECC) in charge of procurements, which are split into three separate competitions.  The first is for data and communications (which has attracted two bidders, G4S and Capita); one is for data services (IBM, HP, and CGI Group have made the final cut); and the third is for communications services (bidders for this include Airwave, Arqiva, Vodafone, and Telefonica).  The winners are expected to be announced in August.

So while Trilliant has staked an early lead, many other vendors are poised to grab a share of one of the most interesting and lucrative smart metering deployments announced to date.

 

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