The rise of smart metering is imminent: study

One of the key benefits of smart metering is the ability to offer demand response programmes, says analyst

The energy grid as we know it is set to get smarter, according a study released recently by London-based market analyst Datamonitor. The firm predicts that smart metering will reach 89% penetration in North America and 41% penetration in Europe by 2012.

Smart meters, a key element for a smart energy grid, transmitreal or near-real time energy-consumption readings between energy consumers and utilities via a network. Utilities can use that data to better monitor and properly bill for energy usage; it also enables them to more effectively manage power loads, which, among other benefits, can reduce or even eliminate costly (and irritating) forced rolling blackouts.

“One of the key benefits of smart metering is the ability to offer demand response programmes,” says Alex Kwiatkowski, lead analyst of Datamonitor’s Vertical Market Technology team. “In times of high demand, such as on a hot summer day when many air conditioning units are running, utilities do not have sufficient supply to meet demand, so additional power has to be imported at great cost to the utility. To reduce the need for this imported power and, in turn, to cut these additional costs, smart meters can communicate to customers a higher tariff and provide an incentive for them to reduce their consumption during this peak period.”

Meanwhile, energy consumers, both household and businesses, can reap better control over their energy bills.

According to Datamonitor’s study, titled “Smart metering in the energy and utilities sector”, 6% of households in Europe and North America currently have smart meters. “Slower penetration in Europe is the result of concerns over the more competitive market effectively ‘stranding’ assets when customers want to switch provider — in turn making utilities less inclined to install them in the first place. In North America, by contrast, customer churn is less of an issue and many utilities have already started a programme of replacing existing meters with smart meters,” according to Datamonitor.

Members of the US Congress have expressed interest in developing a nationwide smart grid in the recently proposed Energy Bill, which, if passed, would certainly spur smart-meter adoption.

Technology companies such as Echelon, Elster and EnergyCite stand to benefit from the growing interest in smart metering, as it relies on networking technology and monitoring software. “There will certainly be a key role for technology vendors to demonstrate how they can facilitate smart metering and deliver the benefits it provides,” Kwiatkowski says.

Samson is senior editor with the InfoWorld Test Centre.

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Tags technologysmart meteringUtilitiesenergy grid

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