Over the last few months it’s been interesting to look at the coverage of smart meter deployments, as people are starting to question as to what the benefits have been? Did the billions of dollars invested in them help either the grid or consumers? The pace of deployment has certainly slowed in the US and Europe and in recent months there seem to have been as many headlines about smart meters being replaced with old analogue ones as there have about new deployments. At the same time the interest of energy suppliers in smart metering has been waning. Instead they’ve fallen in love with smart thermostats as the way to woo consumers with energy savings. British Gas’ recent purchase of AlertMe for £44 million (a tad short of the $3.2 billion that Google paid for Nest) is the latest example of that trend. And with energy prices falling, any claim that smart metering will engage customers in energy saving is looking increasingly spurious.
But that’s a malaise specific to the North American and European energy suppliers, who are probably beginning to feel that they’ve been mugged by meter manufacturers into deploying white elephants that have turned out to be little more than an overpriced AMR system. If we look at the next generation economies, like Brazil and India, they have a very different set of problems. The most important of which is the amount of electricity which simply disappears. In India around 25% of electricity “goes missing”, equivalent to almost $20 billion of revenue every year. In Brazil around 11 GW is stolen, equating to 20% of generation. The effect of this is not only lost income, but power outages associated with illegal connections and tampering. It is a level of disruption that calls for a very different approach to the one provided by the expensive, over-specified meters of the Western world.
These problems require a far more pragmatic approach to smart metering – generating a new breed of solutions which I refer to as Smart Metering 2.0. Whilst the western deployments should have been about data, they ended up being little more than new billing solutions because the systems were designed from the wrong perspective. That’s largely because they were designed by people who didn’t really understand the architecture of end-to-end systems and were hung up on a legacy approach. In effect they made the meter more complex so the head end could stay simple. That was all about not rattling the cage of the utilities’ IT departments, most of which don’t want to have to deal with more data. The new meters are taking the correct view of keeping the meter as a simple source of data and adding value in the comms and head end. It’s no surprise that these are being spearheaded by companies with a background in comms who understand how M2M and the Internet of Things systems work. It’s an approach which drastically reduces the cost of deployments and allows utilities to upgrade their capabilities as they need them, rather than trying to do everything from day one.