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.

 

Drones for Utility Asset Management, Part 2: Unlocking Future Potential

— January 3, 2017

Drone - CityThis post is the second in a two-part series. The first looked at regulatory developments in 2016 that are paving the way for the commercialization of drones for utility asset management in the United States.

Potential drone applications in the electric utility sector are vast, ranging from line and substation inspection to storm damage assessment and vegetation control. Drones mounted with video cameras, lidar, infrared, and hyperspectral imaging equipment stand to improve data collection and analysis, enable aerial mapping and 3D modeling of grid assets, and improve overall awareness of grid conditions.

Used strategically, drones hold promise to reduce inspection and maintenance costs, replace human workers in high-risk conditions, and increase the reliability and efficiency of grid operations. However, the market remains largely untapped.

The Future of Grid Monitoring

As the regulatory framework governing drone operations gradually takes shape, it is possible to imagine a not-too-distant future when drones are deployed for a variety of uses, including:

  • Monitoring vegetation overgrowth and risk, enabling quantitative, data-driven vegetation management programs
  • Replacing helicopter inspections of transmission lines, lowering costs and reducing the number of risky helicopter flights near power lines
  • Performing daily autonomous inspections of substations and other critical equipment, alerting grid operators to equipment damage, abnormalities, or maintenance needs
  • Surveying and assessing storm damage and other disasters, facilitating the development of targeted recovery plans and reducing grid downtime

These functions and others could either be performed by grid operators with in-house expertise or contracted out to drone companies in a drones as a service model.

Taking Technology to the Next Level

The potential for drones to transform utility asset management will increase as the technology becomes lighter weight, less expensive, more durable, and increasingly autonomous. Singapore-based H3 Dynamics offers an example of the possibilities presented by autonomous drone technology with its Dronebox system. The system consists of solar-powered drone charging stations designed to facilitate remote asset management with minimal human interference. Drones housed in the Dronebox can take off, land, and recharge autonomously and routinely, enabling the regular inspection of hard-to-reach transmission lines and other critical infrastructure. They can also be dispatched remotely on an as-needed basis.

H3 Dynamics’ Autonomous Dronebox

Dronebox(Source: H3 Dynamics)

Managing Big Data

Like other smart technologies deployed for grid monitoring and management, drones will produce ever greater volumes of data. One of the challenges facing grid operators will be translating that data into action to improve the efficiency, resiliency, and responsiveness of the power generation and delivery system.

Currently, grid operators are struggling to convert mounting volumes of data into real-time operational improvements. Making the most of drones for utility asset management will require advanced software systems and institutional processes to ensure high quantities of data translate into high quality action. While drones will likely save money in the near term (through streamlined inspections, displaced costly helicopter missions, improved storm damage recovery times, and reduced personnel needs), taking full advantage of the data drones produce will likely be a longer process with a steeper learning curve.

 

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