Navigant Research Blog

In Japan, Smart Meters Accelerate

Neil Strother — May 1, 2014

The deployment of smart meters in Japan is moving into a higher gear.  The country’s leading 10 utilities have announced plans to finish installing residential smart meters sooner than originally scheduled.  The speedup was prompted by a perceived need on the part of the incumbent utility monopolies to better prepare for expected competition once the retail sale of electricity is deregulated in 2016.

Tokyo Electric Power Company (TEPCO) is expected to complete its deployment first under the revised schedule.  The company is aiming to have the deployment of about 27 million smart meters finished in its fiscal year 2020.  TEPCO is expected to soon announce which five manufacturers have been chosen to the supply the utility with new meters for its first surge of installations set to begin this fall.

All In by ‘24

Meanwhile, Kansai Electric Power Company (KEPCO) and Chubu Electric Power will aim to have their smart meter projects finished in fiscal year 2022.  KEPCO, which has a service area that includes Kobe, Kyoto, and Osaka, has already deployed about 2 million smart meters.  Six of the remaining utilities intend to complete their smart metering projects in fiscal 2023, with the seventh, Okinawa Electric Power Company, moving up its expected completion date to 2024 from the original year of 2032.  By 2024, virtually all of Japan’s roughly 80 million residential customers are expected to have a smart meter installed in their homes.

The growing smart metering activity in Japan will have a positive impact on at least one U.S. company, Itron.  Itron’s smart grid software package, called OpenWay Collection Engine, was recently chosen by Mitsubishi Electric Corporation for deployment at Chubu Electric Power, Japan’s third-largest electric utility.  The OpenWay platform will be used to help collect and relay the high volume of data expected from field routers and the estimated 10 million smart meters Chubu Electric Power intends to install through 2022.  This Japanese win for Itron, which has struggled in recent quarters, as smart metering projects have wound down in North America, is its second major victory this year.  In March, FirstEnergy announced it had chosen Itron to provide 2 million smart meters and the OpenWay platform for deployment among FirstEnergy’s four Pennsylvania-based utilities.

As was seen during the boom in smart meter deployments in North America (and noted in Navigant Research’s recent report, Smart Meters), a similar situation is about to begin in Japan – with multiple projects commencing at about the same time.  Many winners and losers are about to be chosen among vendors of smart meters and grid hardware and software in Japan.  The stakes are high, and many in the utility world will be watching closely for new lessons that are likely to emerge from the Japanese effort.

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