Navigant Research Blog

AMI in Latin America: Moving beyond Mexico and Brazil

— June 7, 2018

There is finally a spark. After years of sitting on the sidelines, Latin America is finally making a play—on a meaningful scale—at the smart metering market. Across the larger markets of Brazil and Mexico, utilities have dabbled with smart metering for some years. Now that midsize markets like Peru, Colombia, and Chile are committing to high volume deployments in the near future, Latin America is gearing up for a period of sustained and record growth.

Motivations Are Clear

When taking a high level look at the region, the value of smart metering is abundantly clear. Latin America and pockets of Asia Pacific (most notably India) experience some of the highest rates of electricity theft in the world. Smart meters can detect and record theft of electrical service, sending meter tamper alerts back to the utility. Mitigating these (non-technical) losses is critical to improving the financial situations of these oft-strapped regional utilities and enabling higher levels of spending around more advanced smart grid technologies. In the evolution of the smart grid, smart meters sit right at the beginning; this is where much of Latin America resides today.

Traditional Giants

Brazil and Mexico have traditionally led the region when it comes to smart metering. In Brazil, utilities like AES Eletropaulo, Celpa, Eletrobras, Light, and others have at least experimented with smart metering, from pilot-scale projects to multimillion-meter deployments. In Mexico, state-run utility CFE is in the process of converting 30.2 million customers to smart meters by 2025. These regional giants will continue to account for the lion’s share of smart meter volumes across Latin America. Yet, new markets such as Peru, Columbia, and Chile will also account for significant smart meter revenue over the coming decade.

So What’s Changing?

According to BNamericas, Peru is set to commence an 8-year rollout project beginning in November 2018. In Colombia, some 11 million households will boast advanced metering infrastructure (AMI) systems by 2030 under plans announced by the Ministry of Mines and Energy. And in Chile, Energy Minister Andrés Rebolledo said on Twitter, “By 2025 all the country’s meters will be smart, that is to say, people will be able to know exactly how much energy they consume and when.”

The emergence of these new markets helps beyond the simple contribution of new growth and extends to the establishment of new use cases. Smart meters are still low on the list of priorities for many of the region’s utilities, some of which are still focusing on electrification as their primary objective. For them, the costs of smart metering are still perceived as prohibitive. As new use cases are generated, regional perceptions will likely shift as benefits around billing, optimization, and theft are increasingly realized.

For more information on smart metering plans in Latin America, in addition to the rest of the globe, watch for Navigant Research’s upcoming Global AMI Tracker 2Q18 report.

 

China Cements Its Role as the Undisputed AMI Leader

— November 30, 2017

In terms of volume, China continues to preserve its status as the undisputed global leader in advanced metering infrastructure (AMI). Since 2012, State Grid Corporation of China (SGCC) has been deploying smart meters to each of its customers at a feverish clip. SGCC has installed more than 400 million smart meters across China over the past 5 years as part of this unprecedented project.

While utilities in countries like Italy and Sweden have succeeded in converting all their electromechanical meters to smart devices, the scale and execution of China’s nationwide project are truly unmatched. It is worth noting some of the unique characteristics of SGCC’s project and what’s in store for the future of the overall Chinese smart meter market.

How Is This Possible?

When looking at the Chinese market for smart meters, it becomes clear that all meters are not created equal. More often than not, smart meters deployed across China lack the full capabilities of a basic smart meter common in Europe or North America, such as hourly interval measurements or reasonably symmetric two-way communications. Yet, the Chinese meters still provide significant capabilities beyond traditional automated meter reading systems, including very low speed or potential short-range communications.

These limited capabilities are one of the primary drivers behind the radically different price points of Chinese smart meters, which are typically around 50% less than typical US or European prices. In addition, the monopolistic nature of Chinese utilities leads to high volume purchase orders from domestic suppliers, further reducing average meter costs.

What Is Happening on the Ground?

Over the course of 2016, SGCC deployed 70 million new smart meters, with the installed base reaching approximately 400 million devices. SGCC expects full deployment by the end of 2017.

China Southern Power Grid, the country’s other state-owned electric utility, was primarily involved in pilot-scale projects prior to March 2016, at which point the utility began its large-scale commercial deployment. China Southern expects full deployment by 2020, which should account for more than 80 million meters.

Improving Technology Shows Promise for the Market

While initial indications would suggest a significant market downturn in 2017 and 2020 given the rollout conclusions, the emerging second-generation smart meter market should help placate any potential concerns. According to China’s national regulations, meters must be replaced every 5 to 8 years. With the lifespan of SGCC’s deployed meters running between 1 and 5 years, the mega-utility will now begin looking into second-generation upgrade meters, which often carry a higher cost along with increased capabilities.

This emerging second-generation market is expected to help sustain the strong revenue and growth profiles that have characterized the Chinese market for years. As other major markets like Brazil, Egypt, India, and Turkey begin their forays into large-scale smart meter projects, lessons can be learned from the impressive scale and execution of China’s rollouts.

 

The Internet of Things and Time Series Data

— December 21, 2016

Cloud ComputingThrough the Internet of Things (IoT), the world is becoming more and more interconnected and intelligent. Enormous amounts of data are being generated while the cost to store it is decreasing. Consequently, companies are looking to leverage this data to conduct analysis and deliver insight into their businesses. According to Navigant Research, IoT will represent a $500 million addressable market by 2020; most industries are expected to transform themselves in some way as homes, offices, cars, and even healthcare services become smarter through IoT devices.

Among all types of data, time series data (e.g., data from sensors) is becoming the most widespread. Unfortunately, collecting, storing, and analyzing massive amounts of this data is often not possible with traditional SQL databases. The challenge with time series data is that reads and writes to the database must be fast, reliable, and scalable.

What Is Time Series Data?

Time series data is any data that has a timestamp, such as IoT device data, stocks, and commodity prices. This data also often has very high write volumes, so it must be compressed and yet must also be easy to retrieve. While storing time series data is not a new challenge, the need to collect and analyze massive amounts of it from thousands of devices is a more recent requirement. Traditional SQL databases are not designed to manage time series data as these databases input each data point separately, thereby creating a massive number of duplications.

With such high volumes of information, it can be challenging to find a simple, scalable solution to easily store and access data. However, there are distributed NoSQL databases geared toward time series data storage that are designed to scale horizontally, making it easier to add capacity. Some of these databases and their users include:

  • InfluxData InfluxDB: Used by Nordstrom, Cisco, eBay, SolarCity, and Telefonica
  • Elasticsearch: Used by Verizon, Symantec, Facebook, Salesforce, Emerson, and Esri
  • IBM Informix: Used by Morgan Stanley, Lehman Brothers, and NASA
  • Kairos DB: Used by Proofpoint, Enbase, Abiquo,  and Lampiris
  • Basho Riak TS: Used by The Weather Company

What’s Next?

Tremendous value can be generated by deriving insights from times series data. Example use cases include utilities with smart meters that create billions of data points a year; smart building companies that detect security break-ins or inefficient energy usage in real time; and vision sensors in autonomous vehicles that collect critical data to guide driving. The possibilities for IoT and time series data are profound, but the technology requires high-speed data processing, storage, and analytics in order to be as effective as possible.

 

ComEd Takes Next Step toward Becoming a Utility of the Future

— December 9, 2016

Computer and TabletUtilities have a reputation for being stodgy and slow to change, but not all of them fall into this trap. ComEd in Illinois is among those adopting new technologies and is striving to be a trailblazer in how it conducts its business. Currently, ComEd is roughly halfway finished with a systemwide smart meter deployment, having installed some 2.4 million meters in its territory since September 2013. Beyond smart meters, the utility has taken another step in its aim to be what it calls a utility of the future, having just launched an online website to sell energy management tools so its customers can buy products to help lower their bills and save energy.

Changing Business

Dubbed ComEd Marketplace, the site enables customers to educate themselves about energy management tools and buy related products such as LED light bulbs, smart thermostats, water conservation devices, and connected home products like advanced smoke alarms, smart door locks, and security cameras. The site is powered by Simple Energy, a Colorado-based firm that specializes in customer engagement.

ComEd officials envision their new online marketplace evolving as “a cornerstone of our utility where our customers can transact with us and other parties for a wide range of energy-related products and services,” according to Anne Pramaggiore, president and CEO of ComEd.

The idea for the marketplace sprang from one of the utility’s employee hubs that was designed to foster innovation, and officials envision this platform will enable added products and services in the future. The launch of the marketplace is the latest example of how the utility strives to deliver innovative and convenient customer solutions. Earlier in 2016, ComEd introduced a new method by which customers can report service outages via Twitter, which the utility claims is a first in the industry.

Other Innovators

ComEd is not alone in the effort by utilities to embrace new technologies that offer customers the kind of digital experience they have come to expect in the connected world. For example, Pacific Gas & Electric in California has a pilot program in place with BMW that involves a small sample of EV owners to better understand their habits and needs; the BMW i ChargeForward program also aims to reduce the overall cost of EV ownership. In Vermont, Green Mountain Power has taken a flexible and holistic approach in offering its eHome energy management program, which integrates a variety of new technologies, including smart thermostats, plugs, solar PV, EV charging, and Tesla’s Powerwall. DTE Energy in Michigan is another utility at the technology forefront, having launched its Insight mobile app that can help customers conveniently manage their energy use from a smartphone and lower their energy bills.

These offerings demonstrate that some utilities are willing to embrace and deploy new technologies for the benefit of their customers. It is a wonder more utilities have not taken similar steps to move beyond stodgy.

 

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