Navigant Research Blog

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.

 

First Signs of the 2G Smart Meter Movement

— December 5, 2016

ControlsSince the initial installation of smart meters in Italy began in 2001, the adoption of these smart devices has grown rapidly among industrialized nations throughout the world. Traditional electromechanical meters, along with automatic read meters, are now quickly being phased out in lieu of this newer technology. Italy, through its monopoly utility Enel, helped pioneer this movement through the deployment of 32 million smart meters across the country. Now, 10 years after the initial project completion, Enel is set to roll out a fleet of second-generation smart meters that will help kick-start the nascent upgrade and replacement market.

First Generation

Enel began its foray into smart meters back in 2001 with the commencement of its Telegestore project. Completed in 2006 at a cost of $2.87 billion, this project saw the installation of approximately 30 million smart meters for Italian households and businesses. Additional deployments have brought this total to approximately 32 million today. The success of the project contributed to the advancement of the smart meter movement, as it provided a valuable template for other utilities looking to get their feet wet. During implementation, Enel reported that 80 utilities had visited the company to gain insights into the Telegestore project. Ultimately, this project helped demonstrate the feasibility and financial and operational benefits that smart meters can provide to the utility industry.

Second Generation

In the fall of 2017, Enel will begin the process of replacing its fleet of 32 million smart meters with its new Enel Open Meter. This decision is being driven by increased smart meter performance and functionality, as well as dramatically lower costs since Enel’s initial go-around. This new technology will offer faster changes of supply, the elimination of fixed time bands, and the availability of data on electricity use. Also under the umbrella of this project is Enel’s fiber-to-the-home initiative, which will see 224 towns across Italy connected to ultrafast broadband at a cost of over $2.8 billion. The utility is beginning to invest in this innovative communications solution due to the vast reduction in fiber thickness realized over the past decade, meaning Enel will mostly be able to avoid digging up streets for installation.

Looking Forward

The smart meter market is still primarily driven by first-generation installations. Global penetration of smart meters is expected to hover around 30% by the end of 2016, leaving over 1 billion traditional devices still in the field. That said, the combination of shorter smart meter lifecycles and rapidly growing penetration will help advance the update and replacement market in the coming years. Some activity is already being seen with utilities like Arizona Public Service and Salt River Project, but until large volumes of smart meters near the end of their lifecycles, the market will remain limited. Italy, through this large-scale upgrade project, should provide a valuable case study for other utilities to examine the costs and benefits of a relatively early replacement project.

 

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