Realizing the Full Potential of Smart Metering - Accenture's Digitally Enabled Grid program
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Realizing the Full Potential of Smart Metering Accenture’s Digitally Enabled Grid program
Contents Introduction 3 Smart metering: A diverse and challenging deployment 4 Achieving value from smart metering across the 9 full breadth of the business 1. Putting the consumer and the community at the heart of the design 9 2. Managing the complexities of deployment 10 3. Focusing on the people and process change 12 4. Future proofing the solution 12 5. Releasing further value from analytics 16 Conclusion: Extracting value from smart metering 19 Appendix. Global perspectives: The shifting geographical 20 focus of smart metering rollouts 2
Introduction
Smart metering deployment represents a common first step into smart grid
solutions at scale for many utilities. The 10 largest national deployments
worldwide are expected to add 500 million new smart meters by 2020,1
approximately tripling the 2012 global installed base, and the locus of
growth shifting from North America to Europe, then Latin America and
Asia. Despite the ongoing rollouts, many utilities are still unclear about the
optimal route to extracting value from these large investments. Whether
utilities are at the stage of planning, preparation or actual deployment, the
blanket term “smart” masks a more complex reality. Smart metering means
different things to different utilities, given the variety of prevailing industry
structures, legal frameworks, regulatory mandates, availability of technology,
network infrastructure stability and the operational environments. There is
a wide array of possible approaches to deploying smart technologies and
benefit areas on which to focus most aggressively.
Against this backdrop, Accenture recommends focusing on five areas to help
support strong, ongoing benefits realization from smart metering across the full
breadth of the business:
1. Putting the consumer and the community at the heart of the design
2. Managing the complexities of deployment
3. Focusing on the people and process change
4. Future proofing the technology
5. Releasing further value from analytics
3
Smart metering: A diverse and challenging deployment 4
A broad, diverse set of Varying degrees of clarity Accenture’s Digitally Enabled
value levers on business models and the Grid program: 2013 executive
survey methodology
Smart metering deployment has the business case
potential to deliver value across the entire
Although deployments are proceeding in
Accenture conducted an
value chain. Results from Accenture’s
a large number of markets worldwide, the executive survey among utilities
recent utilities executive survey, conducted
as part of Accenture’s Digitally Enabled survey also indicates that some utilities executives worldwide involved
still feel they face uncertainty in both the
Grid program on insights from smart grid in the decision-making process
and smart metering, confirms that utilities business model and business case for smart
metering (see Figures 2 and 3). Overall, for smart grid-related matters in
are focused on different benefits from
their deployments (see Figure 1). For North North American utilities seem to feel more their company. The survey results
American respondents, the role of smart secure than the European respondents are based on questionnaire-
about how smart metering will impact their
metering as a means to support outage
businesses, which is likely a result of being led interviews with 54 utilities
management and increasing grid reliability
are clear priorities. In contrast, European further along in the deployment cycle than executives in 13 countries,
utilities are much more focused on most European utilities. It is clear that conducted via telephone in 2013
many European utilities and regulators have
consumer-related capabilities and meeting
more work to do to provide the necessary
for Accenture by Kadence.*
regulatory mandates. These smart metering
priorities reflect the macro challenges clarity in business model and business
countries face and whether the deployment case areas, if their aggressive deployment
is mandated or not. schedules are to be maintained and
expected value delivered to consumers.
Figure 1. Benefits expected from smart metering deployment.
What are the largest benefits that your company expects from smart metering deployment?
Select three North Europe
America
Improved outage management and outage restoration 58 % 73 % 38%
Reduced meter reading costs 42%
Improved grid reliability 38%
Enhanced network planning and asset management 31% North
Europe
Drive energy efficiency and demand response America
through new tariffs and greater information 27% 44% 17 %
Meet regulatory mandate 27% North
America
Europe
Reduced energy theft 25% 33 % 6%
Improved retail operations efficiency 23% Europe North
America
Enable the integration of distributed
generation and electric vehicles 15% 44% 10 %
Europe North
Enable beyond-the-meter load applications 10% America
31% 7%
Base: All respondents, smart metering section.
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
5
Figure 2. Degree of business model clarity for smart metering deployments.
Is the business model in your company well defined for smart metering (e.g., understanding of the impact on the
day-to-day operations, clear process ownership, visability on costs and revenue flows, clarity on data governance, etc.)?
59% Europe
69%
North
America
50 %
9 0 1 9 0 1 9 0 1 9 0 1
8 2 8 2 8 2 8 2
7 3 7 3 7 3 7 3
6 5 4 6 5 4 6 5 4 6 5 4
31% 10% 32% 27%
Yes, and it is Yes, the future business Yes, to a large extent: No, the business model
already in operation model is fully articulated the business model is largely is not defined yet
and agreed defined but there are still
some areas of uncertainty
Base: All respondents, smart metering section.
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
Figure 3. Degree of business case clarity for smart metering deployments.
Is the business case for smart metering articulated and agreed between key players
(e.g., regulator, distribution company, retailer, municipality, consumer advocates, etc.)?
Yes
25 % North
America Europe
83% 63%
75%
No
Base: All respondents, smart metering section.
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
6Deployment challenges Learning from other smart
Utilities face a broad set of challenges metering deployments
to confirm effective deployment of
smart metering. As would be expected, The extensive range of deployment
European survey respondents identify an experience around the world provides
undefined business model and a lack of a tremendous learning opportunity for
supporting policy/regulation as the two utilities. Although the temptation for
largest challenges to deployment (see utilities may be to look to learn from
Figure 4). In contrast, while some North deployments that are very similar to
American respondents also seem to have their own, the contrasting deployments
concerns about the degree of regulatory might yield even more valuable insights.
support, other more practical deployment For example, the United Kingdom smart
considerations are also highlighted, such metering deployment program (see the
as data management and analytics, UK case study on page 8) looks highly
and lack of consumer acceptance. unusual at a high level, but it will most
likely yield interesting solutions in areas
of value to all deployments, such as
data management, consumer behavior
change and technology interoperability.
Figure 4. Challenges to successful full-scale smart metering deployment.
What is the biggest challenge to successful full-scale smart metering deployment in your company?
Select one Europe North
America
Lack of supporting policy/regulation 25% 2 2
Complexity in terms of data
management and analytics 24% 3 1
(e.g., security, ownership, etc.)
Lack of consumer acceptance 12% 2
Undefined business model 10 % 1
Undefined business case 8%
Lack of clarity on the best technology/
optimal architecture development
6%
Concerns about security 6%
Concerns about scalability of the solution 4%
Lack of industry standards 4%
Lack of clarity regarding
deployment approach 2%
Base: All respondents, smart metering section.
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
7The UK smart metering rollout: A unique deployment
that might offer valuable lessons
The United Kingdom is embarking on a While the need to enter homes increases While smart meters have significant
substantial deployment of smart meters, the brand risks from poor delivery, it potential to improve the service levels
with more than 50 million electricity and also opens up the potential for training provided to prepayment consumers, they
gas meters due to be deployed, costing consumers on solutions offered by the also open opportunities for new tariffs and
close to £12 billion.2 Although the UK meter and in-home devices. So varying demand-response products to help manage
smart metering rollout differs markedly approaches by the utilities involved could grid constraints and renewables integration.
from every other global deployment, easily lead to different outcomes in
it could end up providing a wealth of energy conservation and in the uptake of Unlike with many rollouts, the UK
insights for all deployment programs. Its additional products and services. deployment will enable consumers to
most fundamental characteristic is that retain ownership of their energy data.
it is retailer-led within a competitive Given the relatively high level of UK Utilities would only have the rights to the
retail market. As a result, the deployment consumer switching, interoperability basic data required to deliver against their
approach taken by each utility will need to will be key. Considerable effort will be statutory commitments. This separation
take into account both the optimization of invested in verifying that expensive assets limits utilities to providing services such
installation and the potential to improve need not be replaced when consumers as basic billing and last-gasp alerts
its retail position, particularly with its most change retailers or sign up for new signaling an outage, unless the consumer
valuable consumers. Beyond the potential products. Also, the approaches the United explicitly agrees. This situation opens up
efficiencies in meter operations, there Kingdom adopts for managing consumer the prospect of a type of market developing
is value in attracting and retaining the data will provide useful comparisons for consumer data—in turn, raising the
best consumers. Given this background, for many utilities in other markets. question of how much utilities would
utilities around the world may learn have to pay to gain additional access to
some valuable lessons from the way the Another distinctive characteristic of the that data. It would also be instructive
retail product set in the United Kingdom United Kingdom is that prepayment is to see if the UK model of consumer data
evolves—helping to answer questions likely to be a significant component of ownership helps to improve consumer
such as: What do consumers want, and the offered solutions.4 Already, about acceptance of smart meters, and whether
will beyond-the-meter services be part of 15 percent of UK electricity meters use this approach is adopted by other countries.
the solution? For example, one utility has prepayment —a higher proportion than in
already raised the possibility of offering most other developed countries, and the
free electricity on Saturdays in return for number of consumers with prepayment
customers switching more of their usage meters has been growing in recent years.
away from the working weekdays.3 The potential to provide prepay solutions
at a lower cost than using traditional
In the United Kingdom, meters generally prepayment meters could result in growth
sit inside people’s homes, meaning most of the prepay approach and its extension
installations require appointments and a into new consumer segments, mirroring
well-trained, consumer-aware workforce. the use of prepay in mobile phone services.
8Achieving value from smart metering
across the full breadth of the business
Accenture has identified five critical
success factors to help confirm sustainable
1. Putting the consumer and proactive, particularly when it comes
to saving money. A sound smart metering
benefits realization from smart metering and the community at the program can be delayed for years or even
across the full breadth of the business, canceled if it fails to engage consumers
from design through deployment:
heart of the design and win buy–in. For example, after early
One of the key lessons that has emerged experiences with some public backlash
1. Putting the consumer and the
is that deployment success is dependent in the United States, energy providers
community at the heart of the design
on developing and communicating a and other organizations have exhibited
2. Managing the complexities of compelling consumer value proposition. a consistent focus on engaging and
deployment Consumers need to feel the solution educating consumers on the benefits of
has been designed for their benefit if it smart metering as part of their deployment
3. Focusing on the people and process
is to achieve behavioral change. During and post-deployment programs (see sidebar
change
smart meter rollouts, consumers want to on page 11). Lack of consumer acceptance
4. Future proofing the technology be engaged and educated and, once in was identified as the second-most common
5. Releasing further value from analytics place, they expect providers to leverage deployment barrier by North American
the technology to offer a new energy respondents in our executive survey.
experience—one that is more personalized
Figure 5. Consumer expectations for education about new smart meters.
If your energy provider was installing a smart meter at your home, what would you want to know about the smart meter?
How will it impact my bill 5% 14% 81%
How much it will cost to install and maintain 6% 13% 81%
How will it work 7% 21% 72%
When it will be installed and if I have
to be home for the installation 10% 25% 65%
If there are any health and safety concerns 11% 25% 64%
If the power will go out while the smart meter
is being installed and for how long 12% 26% 62%
If there are any privacy concerns 14% 27% 59%
How it will help me reduce my impact on the environment 10% 35% 55%
If I can choose to keep my old meter
(i.e., not have a smart meter installed) 16% 31% 53%
What extra products and services my provider
can offer along with the smart meter 13% 38% 49%
Base: All respondents, excludes Italy and Sweden. I would not care I would like this I would require
Source: Delivering The New Energy Consumer Experience, Accenture 2013. about this information information but will be this information
fine if I do not have it
9According to Accenture’s 2013 research,
Delivering the New Energy Consumer
2. Managing the Developing and executing a comprehensive
internal stakeholder communication plan
Experience, conducted among more than complexities of deployment can help verify support for the program
10,000 residential end consumers, most and readiness for the new processes.
respondents reported they would want Get the delivery leadership and
to learn more about smart meters (see team right and aligned Successfully deploying a smart metering
Figure 5), particularly: how a smart meter capability requires the development of
The deployment of smart meters is new, often scarce skillsets within the core
will affect their bill, how it will work
a transformational change for many delivery team. For example, by its nature,
and the costs to install and maintain.5
parts of the utility business, and cannot any smart meter deployment program
It is vital to determine from the very
be achieved without the appropriate is highly complex; it is important to
start of the program what consumers
leadership and coordination from the use planners experienced in large-scale
want from a smart meter and build a
delivery team. Leadership needs to planning and dedicated to the project.
good understanding of consumers’ fears
articulate a shared vision for smart As a result, high-quality, experienced
over issues such as privacy, health and
metering and verify there is alignment personnel with deployment delivery
cyber security. Likewise, consumers
across roles, responsibilities and metrics. experience would be at a premium for
must be educated about what a smart
meter can and cannot do—unrealistic utilities and deployment partners. Verifying
A vital task for the core team is internal
expectations about reductions in bills sufficient access to these personnel would
communications with employees.
without having to change consumption require long-term talent management.
Smart metering deployment can cause
behavior can undermine the program considerable concern to employees;
and damage consumer relations. they must be engaged throughout the
project duration for it to be successful.
The communications methods developed
Maintaining employee engagement
should be viewed as part of a consistent,
throughout a long, complex deployment
comprehensive approach that spans
program is challenging, particularly
the full project all the way through
confirming that the employees drive and
post deployment (see Figure 6).
own the changes to ways of working.
Figure 6. Accenture’s high-level communications approach for smart meter deployment.
Early New meter Availability of smart
awareness installation metering services
First consumer touchpoint Community outreach Consumer communication
and employee training and education • Website
• Welcome letter • Briefings with public officials • Actively solicit input
• Employee brochure and stakeholders
• Community feedback
• Employee intranet updates • Home improvement and • Consumer testimonials
energy-efficiency seminars
• Employees as educational advocates • Higher-than-usual bill periods
• Web tutorial • Worksite information fairs
and seminars Media outreach
• Leadership messages
• Special events and venues • One-on-one educational briefings
• Employee feedback
• Presentations at community events • Proactive approach as part
and neighborhood organizations of education effort
• Online resources and education • Emphasis on media outlets with reach
into key consumer bases
Social media and advertising
• TV/radio/online/print
10Verify thorough From the initial stages of the program, it every part of the program; for example,
is important to perform a comprehensive taken into account in every process
end-to-end testing end-to-end testing of the solution: meter design session.
Installation issues and meter malfunctions and communications technology, systems,
are common to all smart metering rollout volumes, installations in all environments Australian utilities Jemena and United
stages and should be managed through and the scope for scalability. However, Energy used business intelligence to
rigorous supply chain planning, as well as it is equally vital to stay focused on the create a deployment tracking dashboard,
open cooperation and close monitoring of overall business goals and not just technical which combined key rollout and safety
the contractor. The optimal approach is to testing. For example, testing consumer performance indicators and exceptions
plan for technological and process mishaps concerns and the reasons for refusal of to present a consolidated view of
but try to prevent them by thorough end- a smart meter can allow the deployment meter rollout progress. This dashboard
to-end testing of the whole solution. At the team to build a tiered response process was instrumental in managing rollout
same time, the supply chain and capacity that addresses refusals in a sympathetic contractor performance and payment,
management require frequent monitoring but consistent, efficient manner. including supporting required regulatory
to verify sufficient access to materials reporting. The underlying data was
and installers. This requirement can be In the midst of the complexity of the additionally used to provide spatial
aided by building financial incentives and deployment stage, it can be easy to lose visualization of the rollout progress
penalties into the contracts for installation focus on benefits realization. The program on a map of the network area.
vendors that take account of a broad set management team needs to validate that
of targets, not just initial installation. the business case is front and center of
Putting consumers first: Leading practices from
the United States
Consumer engagement is a critical Energy Saver contest (run by Simple Energy), providing a consumer portal as part of a My
component of successful deployment and which awarded consumers for specific usage Account program to track energy usage by
adoption of smart meters and technologies. reduction compared to the prior year. hour, day, month or year. My Account also
Engaging consumers at every phase of provides easy-to-read reports that include
the smart meter deployment process can On its journey to deploy 2.2 million smart insights to help shift usage to evenings and
generate sustainable benefits for both meters, CenterPoint Energy communicated weekends. SCE also created the Budget
utilities and consumers. Following are with consumers prior to key touchpoints Assistant smart meter-enabled tool to help
examples from the Smart Grid Consumer through various channels, including door consumers set monthly spending goals, track
Collaborative’s report, Smart Grid Customer hangers, small billboards and cinema progress and get automated alerts to stay in
Engagement Success Stories, of strategies advertisements, and enabled consumers control and on budget each month.
used by four US utilities to successfully to track the deployment progress of their
engage consumers at various phases of neighborhood online. The utility also created Through the installation of 823,000 smart
deployments, and to help increase consumer an annual Biggest Energy Saver contest, to meters and creation of the SmartHours
awareness, acceptance and adoption of encourage consumers to reduce monthly program, Oklahoma Gas & Electric (OG&E)
smart technologies and programs.6 energy usage compared to similar periods in was able to reduce its load by 70 megawatts.
the prior year. As a result of its engagement SmartHours provides participating consumers
During San Diego Gas & Electric’s (SDG&E) efforts, a 2011 survey of CenterPoint Energy’s with notice of the next day’s peak price
smart meter deployment, the utility consumers indicated 80 percent approved via phone, text or e-mail. Consumers could
performed consumer outreach at 90-, of the utility’s smart grid, 70 percent were then take action to shift their usage out
60- and 30-day intervals prior to meter interested in smart appliances/thermostats of the peak period. The goal for 2014 is to
installation and, out of approximately 2.3 and 89 percent valued energy savings enabled reduce its load by 210 MW by lowering peak
million installations, received complaints by smart meters. demand. In conjunction with SmartHours,
from less than 2 percent of consumers. OG&E offered state-of-the-art programmable
SDG&E also provides home area network During Southern California Edison’s (SCE) thermostats to consumers, enabling them to
(HAN) devices for purchase, integrated with smart meter deployment of 5 million adjust temperature settings to coincide with
consumers’ smart meters, enabling them residential and small business accounts, peak hours and take advantage of time-
to manage their usage, determine energy the utility proactively engaged consumers based pricing. The thermostat automatically
usage of home appliances and make smarter by posting 68 FAQs organized in four adjusts the temperate to match consumers’
energy decisions to reduce overall usage categories—smart meters, privacy, home and personalized settings as it receives price
and costs. The utility also held a Biggest business area networks, and opting out—and signals through the smart grid system.
113. Focusing on the people The most impacted network and retail
processes include:
4. Future proofing the
and process change solution
• Core customer operations.
Recognize the scale of business Developing a sustainable
• Customer interaction and advocacy.
change technology solution
• Operational support services.
Smart metering deployment is far more While the concept of smart metering for
than an asset replacement and IT program • Customer strategy. consumer billing purposes is relatively
and the change approach must reflect • Customer field operations. mature, the technology is still evolving. So
this. Operating the change management too are some of the uses of smart metering,
program in a manner that emphasizes • Integrated analytics. with utilities, consumers and third parties
the new capability requirements and • Network analysis and long-term planning. all exploring new solutions to extract
ways of working would support benefit further value from their investments.
realization. Talent management is critical • Asset network needs management. Preferred communications technologies
to providing the new skills and behaviors • System capacity and demand analysis. are changing, meter asset life is uncertain
required. Managing the coordination and some smart metering products are
of new capability development while • System operations governance. constantly evolving.
balancing operational priorities is a key • Communications networks.
challenge and requires detailed scheduling Concerns over these broad, rapid changes
• Regulatory management. can stall smart metering programs in
to verify that the business maintains high
service levels. Throughout the transition their early stages, as utilities pursue the
The extent of process change provides a
to smart metering, effective change objective of a future-proof solution. The
major business challenge to organizational
management would be required to manage ongoing evolution of the smart metering
readiness, such as managing the cross-
the changeover effectively, both within the solution landscape should not prevent
business implications of unplanned outages.
business and with consumers. utilities from pressing ahead with their
One starting point is to drive the change
smart metering plans.
requirements from the desired business
Accenture analysis estimates more than
outcomes and design the new capabilities
half of utilities’ business processes can
to meet them. Each work group in a utility
be impacted by the deployment of smart
would be affected differently and require
meters and the accompanying premise-side
different levels of readiness (see Figure 7).
technologies, programs and services.
Figure 7. High-level summary of the impact of smart metering on key utility work groups.
Work groups Change in Work volume New skills/ New behaviors Overall impact
nature of job competencies required
Grid operations
Field operations
(Construction and maintenance)
Field operations
(Meter reading and home services)
Consumer solutions
(Call center)
Consumer solutions back office
(Billing and collections)
Information technology/operational
technology (IT/OT)
Consumers/external N/A N/A
Significant change Moderate change Minor or no change
12Implications for future proofing different ways by different parties. This which smart-metering-as-a-service is
cooperation will not happen by default; it more likely to be adopted are the United
the technology solution will need to be made to happen through States, the Nordic countries, Germany,
Accenture’s perspective is that there strong architectural oversight. The Latin America, Asia and Australasia. For
are three specific actions a utility requirements for system performance and example, a relatively small utility co-op in
can take to mitigate the risk of availability will be driven by the very high Denmark, EnergiMidt, is using a cloud-based
obsolescence and make deployments of data volumes and industry obligations solution to provide billing and operational
the technology more future-proof: on data collection performance. support services for its 170,000 meters.8
• Where timelines and market maturity Buy, build or borrow? Trends for smart metering
permit, select products that are able to
integrate via open standards. To date, the trend in Western markets has applications
been to implement smart metering using Smart metering applications are needed to
• Define a flexible architecture that packaged solutions. In the Asia-Pacific
will put a baseline in place and allow support the introduction of smart metering
region, the larger utilities have shown capability across three dimensions:
the solution to evolve as products stronger interest in custom-built solutions
mature—and then manage expectations due to the perceived uniqueness of their • The implementation of new technologies to
aligned to this capability. market and their often strong internal enable remote collection and processing of
• Select advanced metering infrastructure information technology (IT) engineering significantly larger volumes of meter data.
(AMI) and communications that can be capabilities. In general, Accenture
expects most utilities to be able to • Modifications to existing systems to
efficiently upgraded remotely, as these
successfully deploy packaged solutions. support remote meter functionality,
can commonly be incorrect the first time.
management of new asset classes, new
Consider, in detail, any aspect that cannot
In the past two years, the prospect of smart billing options, and interaction with
be remotely upgraded.
metering as a managed service has emerged. operational systems such as outage
Overall, while the standards for smart According to Pike Research, it is unlikely management.
metering are still evolving, this fluid situation that large state-owned utilities such as • The implementation of new “value-
does not necessarily compromise the those in China and India will be willing to add” capabilities such as analytics and
potential for mass deployment. As standards use a “standard, non-customized offering” additional integration to optimize the
evolve, cooperation and integration between for their solutions.7 However, it is likely that benefits and returns from smart metering
the meter and communications providers are smaller or financially constrained utilities investments.
critical; even when standards are specified, would find such an offering attractive.
in many cases they can be interpreted in Based on this research, the territories in Table 1 outlines global trends observed for
the smart metering application landscape.
Table 1. Trends in smart metering applications.
Application Current position Future trend
The head end • Relatively immature technology that has • Move to nonproprietary networks will drive head-end
historically been structured around proprietary solutions to increasingly support standardized protocols
network solutions across multiple communications technologies
Meter data • Relatively mature core solution • Packaged solutions will dominate rollouts
management • Packages provide strong performance on most • Extension of MDMS to support complex analytics solutions
systems (MDMS) functions, though some utility-specific analysis to increase benefits proposition
requirements can cause problems if not managed • MDMS will scale to more than 20 million to 30 million meters
carefully
Application • Driving increased value from integration of meter • Extension of integration to third-party systems, such as to
integration data with outage management systems, asset transmission operators for load forecasting, and to potential
analytics and customer systems providers of in-home solutions, such as energy management
companies
Analytics • Largely an underutilized area of value for existing • Increasing demand for real-time analytics will drive the use
deployments, though becoming recognized as a of cloud-scale computing and integration with nonstandard,
key next step for many utilities with AMI unstructured data sources
• Application of existing business intelligence
approaches to meter data is starting to
demonstrate the scale of benefits available
Portals • Smart meter data generally being incorporated • Increasing requirements to access real-time data, support for
into existing utility portals smart devices and integration with social sites
13Trends for smart metering Trends for smart meters and This coordination is typically most
effectively managed via an overarching
communications premise-side equipment AMI solution architecture function. While
While the pace of change for utilities is The technologies for metering of electricity, contractual arrangements with each party
now faster than ever across virtually all gas and water are relatively mature. are important, success also requires careful
areas of their business, this acceleration is However, key challenges remain around selection of parties that can work well
especially evident in their communication the interface with communications to together to deliver an overall solution.
needs. Communications for AMI has been enable remote functionality, both with
one of the most significant developments the utility and with the HAN (see Table
for utilities in recent years, and continues 3). For this reason, it is critical that the
to be of strategic importance. In this meter and communications vendors work
context, key global utility trends are together closely to avoid gaps in the design
impacting the AMI network, as detailed in and implementation of the meter-to-
Table 2. communications interface.
Table 2. Trends in communications.
Comm. network Current position Future trend
Wide area network • Strong focus on capacity planning and data • Growing importance of reliable, lower-latency
(WAN) prioritization to make most-effective use of networks to support real-time control
limited bandwidth • Extension of Internet protocol (IP) support to the end points
• Requirements for increased security of consumer in the field
data on network • Increased interest in partnerships for dedicated high-
• Interoperability constraints with different bandwidth networks
types of FAN
• Leveraging existing corporate WAN to
support grid operations
Field area network • Dominated by proprietary networks such as mesh • More flexible networks to support different types
(FAN) radio and power line communications (PLC) of data traffic and allowing sharing of data with
• Security of consumer data supported by multiple applications
proprietary network • Leveraging of AMI technologies to support other smart
• Greater importance for network reliability grid technologies such as distribution automation
• Interoperability between field area networks • Extension to support other end points other than smart
is driving the use of IP meters, such as switches, transformer sensors, etc.
Home area network • Limited communication beyond the • Increasing pressure for open standards and the usage
(HAN) meter to household smart devices of IP as opposed to proprietary protocols
• ZigBee® and Wi-Fi HAN are the dominant • Growth of IPv6 to support increased security
communication technologies • Increased device control capabilities where electric vehicles
or solar photovoltaic deployments become very high
Table 3. Trends in smart meters and premise-side equipment.
Meter/device Current position Future trend
The smart meter • Asset lives considerably shorter than previous • Reducing smart meter costs leading to lower use of
meter generation (five to 15 years) modular design—replace the whole meter
• Modular design for communications and other • Increasingly specified to actively support smart
components likely to evolve quickly grid operation
Beyond-the- • Currently limited in scope and capabilities— • Growing interoperability and open standards
meter devices dominated by in-home displays to provide • Rapid and diverse growth of end-consumer energy solutions
energy information to consumers and direct
• Growth of set-and-forget technologies to
load control devices
support energy management
• Security concerns common
• Embedded devices in appliances to support grid
among householders
stability (no consumer interaction)
14The role of power line communications in European
9
smart metering rollouts
Two-way communication plays a major based PLC systems are now seen to offer under consideration. Spain and France,
role in building the modern metering reliability, higher throughput and support which have some of the largest distribution
platform, with communication solutions for a range of smart grid applications. service operations (DSOs) in Europe, have
potentially achieving an optimal trade-off also managed large-scale pilot rollouts.
between system costs and performance. The use of PLC has tended to be particularly Germany and United Kingdom have
Despite perceived reliability issues popular in many European countries (see numerous medium-size rollouts, largely
during its early deployment, power Figure 8). This choice has reflected a because of the higher number of DSOs.
line communications (PLC) presents an broad set of considerations, both local,
attractive transmission solution to some such as meter numbers per transformer
utilities. New, open orthogonal frequency and general, such as attitudes to service
division multiplexing (OFDM)-based discontinuation risks. Some of the Nordic
PLC systems developed and tested in a countries and Italy have already completed
number of international field trials have the deployment of smart meters based
rehabilitated PLC’s early image, and OFDM- on PLC, although other projects are still
Figure 8. Status of power line communications metering deployment in Europe.
Note: Map based on Accenture perception and might not represent the Complete rollout Pilot (< 100k) Large-scale rollout Pilot (< 100k)
completeness of European projects. (>100k)
Source: The Role of Communication Technology in Europe’s Advanced Metering
Infrastructure, Accenture, 2013.
155. Releasing further value the potential benefits from distribution
optimization and capital efficiencies are
Analytics as a key capability in
from analytics commonly discounted or ignored. Similarly,
smart metering value realization
while the scale of potential benefits from The step change in availability of accurate
Identifying the full breadth of areas such as theft prevention are clear, the load and power quality data from
smart metering benefits deployment of solutions that can provide millions of end points offers enormous
ongoing delivery of these benefits is still at potential value in managing the network,
The smart metering business case is broad
an early stage. generation and consumer relationships.
and complex, as the technology has the
Accenture’s executive survey results
potential to impact the entire electricity
support this view, with analytics solutions
system, from generation investment and
representing the highest-priority smart
dispatch, through network optimization,
grid solution, particularly for North
all the way to retail operations and beyond
American respondents (see Figure 10).
into the home (see Figure 9). The most
However, delivering these solutions
commonly pursued benefits, however, have
will require an advanced analytics
tended to be focused on the retail area,
capability that enables integration and
particularly the core areas of meter reads
examination of large quantities of data.
and consumer service support. While the
benefits are becoming well characterized
in the retail area, it is clear that many of
Figure 9. Key potential benefit areas of the smart metering business case and their levels of certainty.
Degree of certainty
Commonly Initial success at Under Strategy
achieved most utilities exploration phase
Meter reading
Meter services
Core metering Contact center call
Back office
Retail
Under metering
Bad debt costs Pre-pay
Retail revenue Tempering and theft costs
Benefit areas
protection Disconnect non-pay
Estimated meter - move in/out
Predictive maintenance costs
Distribution Outage (FLISR)
Distribution
optimization Network optimization and technical losses
Power quality and Volt/VAR management
Capital Replacement deferral
efficiencies Reinforcement deferral
Electricity Demand response
System-
wide
system Energy efficiency
optimization Remote load control
16Reducing distribution costs Canadian utility Hydro One is currently Enhancing the renewables
using smart meter data to improve its
through capital efficiencies asset management capabilities10 (refer to hosting capacity through
Traditionally, the lack of granularity of the related paper in Accenture’s Digital improved network optimization
consumption data has meant that engineers Grid Visions program, Unlocking the Value and demand response
have had to add significant margins onto of Analytics, for more details). Deploying
asset designs and operations to account these types of solutions requires strong Many distribution utilities are starting to
for unknown asset loading and power analytic capabilities to deliver useful experience the impacts of increased levels
quality levels. Smart metering provides data. For example, smart meters can often of distributed renewables in their networks,
a potential step change in the accuracy provide false or multiple outage alerts, and without the necessary data to understand
with which loads can be monitored and therefore confusing notifications, such as when the altering power flow characteristics
forecast. This possibility opens up a broad when reclosers are trying restore supply. will cause network instability. Smart metering
range of potential areas of value for asset They can also present the utility with data can enable improved projection
managers such as peak load forecasting, huge quantities of notifications, such as models, which bring together historical
power quality assessments and asset loading in the event of a major storm. Without the data and weather forecasts, allowing a
monitoring. Prioritization of replacement appropriate algorithms to sift through this utility to accurately forecast supply of
or reinforcement capital spend can reduce avalanche of data, it can be impossible to renewable resources. Forecasting demand
overall investment as well as improve network prioritize outage notifications and verify requires insight into consumer electricity
reliability. In addition, such data can help that accurate information is provided consumption, maximum demand (value and
utilities articulate to regulators the true to restoration crews and consumers. time), seasonal variability and demographics.
cost of reinforcement activities resulting This detailed data also allows utilities to
from distributed generation deployment, develop solutions, such as demand response,
potentially supporting new approaches to that are targeted specifically to support
manage network disruption resulting from localized distribution network operations,
large-scale embedded generator growth. rather than generation or transmission.
Figure 10. Priority smart grid solutions in the short term.
Which smart solutions do you expect to be the highest priority for your company by 2020?
Select three
North
America Europe
Analytics solutions
(i.e., predictive and control analytics using data from intelligent electronic devices) 60 % 75% 41%
Distribution sensing and automation 58% Europe
North
America
Advanced metering infrastructure (AMI) 56% 71% 50%
Outage management 48%
Distribution management systems (DMS) 46%
Beyond-the-meter solutions
(e.g., customer displays, HVAC controls, etc.) 23%
Base = Respondents who selected “discrete implementation” or “comprehensive rollout” as their short-term (to 2020) smart solution rollout plan.
Source: Accenture’s Digitally Enabled Grid program, 2013 executive survey.
17To grid operations, a smart metering Reducing theft Smart metering as an initial step
system looks like a distribution grid
sensor network with fine, though uneven, Theft or diversion detection provides a in improving grid intelligence
granularity. The data can provide inputs to substantial benefit area for some utilities, Smart metering can provide a significant
myriad areas, such as voltage sensing to although this varies markedly across improvement in a distribution company’s
assist power flow monitoring, equipment geographies. By combining data from premise ability to monitor the grid, for the first
loading and load distribution data, and meters and feeder meters, it is possible to time providing pervasive information on
operational effectiveness monitoring. create a comprehensive diversion-detection the volumes and quality of power being
solution. Feeder meters measure power flow consumed to network operations, workforce
into and out of a feeder segment and premise
Applying smart meter data to meters measure the metered consumption
management and asset management teams.
The value of this data, however, will be
support outage management in the same segment. The application of enhanced further if data capture is extended
analytics can indicate diversion amounts further into the grid through feeder meters
Many utilities are looking to fault location,
as well as total segment technical losses. and smart line sensing. Leading companies
isolation and system restoration (FLISR)
solutions to help reduce outage durations should assess how to incorporate the
A key consideration for these solutions potential from increased grid intelligence
and improve safety. Smart meter outage
is that once smart metering has been into their investment management processes.
notifications (last-gasp and restoration
deployed, constant adaption to verify For many utilities, this investment may
signals) can be combined with data from
ongoing benefits delivery will be the norm, be limited to opportunistic inclusion of
sectionalizing and reclosing systems to
including addressing emerging risks. For sensing capabilities during replacement
provide improved visibility of outage locations
example, smart meters can help reduce theft, or reinforcement activities, but in some
and the restoration progress. A critical
but they can also introduce new ways to locations the benefits may warrant
requirement to allow smart metering to
steal electricity. In the United States alone, retrofitting of sensing equipment.
support outage management activities is
electricity theft is estimated at $6 billion.11
the presence of good connectivity models
Also, energy thieves will continue to become
(meter-to-transformer, transformer-to-
more sophisticated as they respond to new
phase). For many distribution companies,
utility tools to identify fraud, meaning that
the quality of these models is patchy at
utilities will need to review and update their
best, with limited accuracy and commonly
theft algorithms regularly to stay ahead.
missing the phase information altogether.
When connectivity models are incorrect,
The capabilities enabled by detailed
meter voltage readings become much less
consumption analysis provide a valuable,
valuable or even useless. Leading utilities will
low-risk first step beyond the core metering
look to improve their connectivity models
solutions. None of these solutions entail
during the smart metering deployment. For
a wholesale modification of the business
instance, meter-to-phase information can
processes to start providing significant
be captured via devices using GPS timing
value. This is because the solutions are
during the meter rollout. Once established,
predominantly based on monitoring
the connectivity data must be kept accurate.
and offline analysis and do not require
This synchronization is one of many smart
operation of an active grid with the new
grid meta-data management issues requiring
capabilities. However, they do require
a transformation of utility business processes.
integration with other data sources as
well as significant analytics capabilities.
18Conclusion: Extracting value from
smart metering
Smart metering has the potential to provide • Design and deploy with the consumer at Smart meters may be a revolutionary
transformative levels of information and the heart of solution. technology, but the process of achieving
control to utilities, but there is no simple ongoing value is more likely to be
• Verify that you have developed the
solution that ensures benefits delivery. evolutionary in nature. Building in business
most effective delivery team possible to
Utilities must endeavor to gain full control and technical flexibility will be critical for
manage the program.
over the critical components: seizing opportunities as the uses of smart
• Perform end-to-end testing of metering evolve.
everything—technology, processes,
benefits areas, consumer attitudes, etc.
• Do not underestimate the scale of the
business change.
• Future proof the technology solution
where feasible through use of open
standards and flexible architectures.
• Extend the breadth of the business case
across the value chain and deliver these
benefits through advanced analytics.
19Appendix
Global perspectives: The shifting geographical
focus of smart metering rollouts
Smart metering has emerged as the Around the world, most smart meter as the business case has become clearer;
dominant entry point into the smart grid deployments are being driven by for example, Sweden mandated its rollout
journey for most distribution utilities. governmental mandates, including in China, despite the original negative benefits case.
The 10 largest deployments worldwide driven in part by the country’s current Five-
are forecast to add 500 million smart Year Plan,15 US states such as California and Looking around the world, the geographical
meters by 2020,12 approximately tripling Texas, and the European Union directive focus of smart meter deployments
the current installed base. Together, for 80 percent of EU meters to be smart is shifting from West to East, with
these 10 countries are expected to spend by 2020.16 However, there are also some the Asia Pacific region, specifically
an aggregate total of between US$150 notable deployments being planned China, set to dominate overall global
billion and US$220 billion on the initial that have considered a market-driven deployment by 2020 (see Figure 11).
deployment.13 The UK deployment alone— approach. Uncertainties about the costs
of about 50 million electricity and gas of deployment and the ability to monetize
smart meters—is expected to cost about the benefits have resulted in some national
£12 billion (around $19 billion, or $380 cost/benefit analysis exercises producing
per deployed meter) over five years,14 negative or marginal outcomes. Despite
requiring a five-fold increase in meter sometimes negative assessments, some
fittings per year across the country. utilities are proceeding with deployments
Figure 11. Existing and forecast smart electricity meter deployments by country—2012 to 2020.
Meters (millions)
400
350
300
250
200
150
100
50
0
China United Japan France Italy Germany United South Spain India
States Kingdom Korea
Source: Accenture analysis, 2013.
Existing meters Forecast additional meters by 2020
20Smart metering Smart metering Smart metering deployment
deployments in the United deployments in Europe in Asia and Australia
States and Canada Europe will experience a significant The Asia Pacific region is set to dominate
increase in smart meter deployments to the global deployment of smart metering
The deployment of smart meters in the 2020, driven by government mandates by 2020 (see Figure 14). China is forecast to
United States and Canada is expected to and market factors (see Figure 13). It lead the way, with an installed smart meter
steadily increase by 2020, representing is estimated that a total of around 200 population that could potentially approach
a penetration rate of about 80 percent.17 million new smart electricity meters will 400 million by that date.21 In contrast, it is
During that time frame, the United States is be deployed across Europe, bringing the estimated that India will deploy fewer than
forecast to add close to 90 million meters region’s total smart meter population 18 million smart meters to its population of
to the current population of 43 million, to approximately 240 million.19 Most more than 1.2 billion people. However, the
while Canada is estimated to grow its European countries have adopted mandates high potential in India for the deployment
installed smart meter base from 6 million for deployment, with a key part of the of smart meters to support prepayment
to between 15 million and 20 million18 (see overall expected benefits being the solutions could result in strong market-led
Figure 12). potential to help meet their obligations growth in installations.
under the European Union’s “20-20-20”
The nature of the regulatory structures Elsewhere in Asia, Japan is expected
climate change targets. This set of binding
in the United States and Canada means deploy almost 60 million smart electricity
legislation aims to ensure the European
that some states and provinces will delay meters by 2020, largely under a market-
Union meets its ambitious climate and
smart meter deployment due to cost/ driven model.22 Meanwhile, South Korea is
energy goals for 2020 through reducing
benefit concerns. However, many of the looking to position itself at the forefront
greenhouse gas emissions by 20 percent
largest population centers are covered of smart grid deployment globally through
compared to 1990 levels, increasing
by mandated rollouts or by approved the government’s “Green Growth” policy.
the share of renewables by 20 percent
agreements with the local regulators. As part of its broader smart grid strategy,
and delivering a 20 percent reduction in
consumption.20 The only large European the South Korean state utility, KEPCO,
nation to not have mandated deployment of is looking to deploy between 500,000
smart meters is Germany, but major rollouts and 1.5 million smart meters per year
are still expected based on the separate in homes over the next 10 years.23 In
market assessments made by individual Australia, only the State of Victoria has
German utilities. made significant deployments, due to a
state-level mandate.24 In other Australian
states, concerns about the business case
and adverse media coverage have delayed
significant deployments. This is set to
change, however, based on the recently
published “Power of Choice” paper by the
Australian Energy Market Commission, the
national market rulemaker, which outlines
the framework for a national retailer-led
deployment.25 Further, the deployments
in Victoria are starting to extend their
solutions to realize value for customers
and the utilities involved.
Figure 12. Estimated total number of installed smart electricity meters, North America, by 2020 (millions).
Total number of installed smart electricity meters by 2020 (millions)
43 United States ~ 90
6 Canada 8 - 12
Installed electricity meters in 2013 (millions)
Additional electricity meters by 2020 (millions)
Source: Accenture analysis, 2013.
21Figure 13. Estimated total number of installed smart electricity meters deployed in Europe, by country, by 2020 (millions).
Total number of installed smart electricity meters by 2020 (millions)
Government-mandate approach/Market-driven approach
0.3 Germany 32
0 Austria 1 5
0.3 France 35
0 Belgium 3 7
0.1 Netherlands 2 8
34 Italy 0
0 Greece 6
Czech
0 Republic 5
0 Poland 3 16
4.4 Sweden 0
1.6 Finland 1
1.7 Denmark 1
1.7 Spain 17
0.1 Portugal 6
United
0.7 Kingdom 33
0 Ireland 2
Installed electricity meters in 2013
* Realistic scenario: Mostly based on announced deployment by utilities
Additional electricity meters by 2020 (realistic scenario)* ** Max scenario: Assumed 95% rollout by 2019 as required by the regulatory degree
Additional electricity meters by 2020 (max scenario)** Source: Accenture analysis, 2013.
Figure 14. Estimated total number of installed smart electricity meters deployed in Asia Pacific, by country, by 2020 (millions).
Total number of installed smart electricity meters by 2020 (millions)
Government-mandate approach/Market-driven approach
152.8 China 200-
10.5 Japan 48 250
4.9 South Korea 16
2.2 Australia 5
1.4 India 16
Installed electricity meters in 2013
Additional electricity meters by 2020
Source: Accenture analysis, 2013.
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