Cleantech Market Intelligence
European Grids Look to RF Mesh Networks
Communications networks for smart grids have evolved very differently in Europe than they have in North America, with power line communications (PLC) and cellular technology the leading forms of communications thus far for smart meter connectivity across the pond. Here in the United States, the availability of unlicensed (free) spectrum in the 900 MHz band has led to the leadership of proprietary radio frequency (RF) mesh solutions, such as those provided by Itron, Silver Spring Networks, Elster, Tantalus, Landis+Gyr, and others.
The European Commission, however, has taken steps in recent months to bring 48 European nations into alignment on spectrum policy across the continent. Specifically for smart meters and smart grid applications (and other machine-to-machine [M2M] applications), the European Conference of Postal and Telecommunications Administrations (CEPT) announced in February a framework whereby 5.6 MHz of spectrum, from 870 MHz to 875.6 MHz, will be set aside for unlicensed M2M uses, including smart meters and grids. Details can be found in CEPT’s Electronic Communications Committee (ECC) Report 189.
CEPT cited several reasons for supporting interoperability, including the creation of economies of scale and cost reduction, reduction in the risk of cross-border interference, and greater flexibility. The choice of sub-1 GHz spectrum, where propagation characteristics are stronger than at higher bands, makes the spectrum suitable for reading meters that may be placed indoors, even in basements — a common practice in European nations.
Ofcom, the United Kingdom’s telecommunications regulatory body, this year made amendments to its Wireless Telegraphy Act that allow for commercial operations on a license-exempt basis at 870 MHz to 876 MHz as of June 27, 2014; similar action is likely across the 48 nations that participate in CEPT.
This is good news for vendors, like those named above, but also for utilities across Europe seeking more flexibility in their smart meter and grid deployments. RF mesh solutions are often less expensive than PLC for near area networks, though that varies widely depending upon the structure of the grid in the region as well as the topography. Nonetheless, some smart meter/communications solutions providers have struggled financially over the past couple of years after ramp-up for American Recovery and Reinvestment Act (ARRA) funding created a spike in demand that has since fallen rather sharply.
Room to Grow
Europe is poised to be the next big growth area for smart metering, thanks to the European Union’s (EU’s) 20-20-20 initiative, which a majority of European nations support. Navigant Research estimates that current penetration of smart meters across Europe is just 15%, compared with more than 40% in North America. While several nations have made significant progress in deployment (Italy, Scandinavia), Germany isn’t yet on board with the 20-20-20 initiative, and the United Kingdom and France are just getting rolling. In Eastern Europe, there has been minimal activity to date, particularly in Russia, home to nearly 100 million meters. For details on Navigant Research’s global smart meter forecast, look for our report Smart Meters, slated for publication later this year.
The Market for Smart Meters, Europe: 2013-2023
(Source: Navigant Research)
Smart meter shipments in North America are expected to total 121 million between 2014 and 2023; that total is forecast to be 221 million in Europe. That’s more than $18 billion in anticipated revenue for smart meters — a market that surely every smart meter vendor will watch.