Let’s discuss a key component of the smart grid. For this column, I want to take an international view of smart-meter adoption. In fact, I want to touch on a bit of controversy surrounding smart meters in one particular country.
A smart meter is an electronic device that enables two-way communication between an electrical energy meter and a central utility system. More specifically, smart meters record energy consumption data in intervals and then communicate that data back to the utility.
Utilities use this energy consumption data for usage monitoring and customer billing purposes. Smart meters can also eliminate meter reading, saving utilities a ton of man-hours.
Of course, smart meters also benefit consumers and businesses because they allow utility customers to monitor their usage as they go, rather than having to wait until a bill comes in the mail. This makes budget planning easier, and it also encourages energy consumers to use less energy.
It’s a classic example of how the IoT (Internet of Things) is allowing people to make decisions proactively instead of reactively. We’ve been talking about smart meters for what seems like a long time, but what are we looking at nowadays in terms of smart meter growth and global market penetration?
Let’s take a look. In terms of growth projections, according to research firm progressive markets, the global smart meter market is expected to grow at a CAGR (compound annual growth rate) of 10.8% between 2017 and 2025.
What’s driving the market? A few things: First, there are government policies that are increasing the demand for smart meters. Second, smart meters’ ability to enhance distribution efficiency is definitely encouraging adoption among utilities. And, third, an increasing awareness about the benefits of smart grid technologies continues to push demand for smart meters from utility customers.
Hurdles for smart meters, remain. For instance, in some markets, installation costs remain a burden. Recently I saw a report that broke down and analyzed global smart meter adoption in a helpful way. The report is from Navigant Research, and it takes a close look at global utility smart meter projects to draw its conclusions.
Here’s what I learned. Simply, China is killing it when it comes to smart meters, apparently. Navigant’s research demonstrates that China leads the global smart meter market with at least 408 million installed meters, which accounts for 68.3% of tracked installations.
Besides China, other countries in the Asia Pacific region, such as Japan and India, are also making waves thanks to large-scale projects and high-volume deployments. Elsewhere in Asia Pacific, the market is more fragmented. This is similar to the case in Eastern Europe, Latin America, the Middle East, and Africa, where uptake remains relatively limited.
Even though uptake is limited, these regions stand to gain a lot from overcoming the various barriers to entry they face. There are a multitude of benefits wrapped up in grid modernization—many of which we discussed on the show a couple of weeks ago—including preventing energy theft, reducing labor costs, and many more.
Here in the U.S., smart meters are helping us accomplish a couple of important goals.
As consumers and businesses become more accustomed to quantifying everything, there’s a growing desire for data across the board. In energy and utilities, more data can lead to more accurate billing.
Utility customers just aren’t ok with taking the utility’s word for it anymore … not in the age of the IoT. Rising energy costs in the U.S. will also continue to increase the demand for smart meters in the coming years.
We also can’t ignore the national and global push for more energy efficiency. Smart meters can help people and businesses self-regulate their energy use. Just like with wearable devices, which can help keep patients with chronic illnesses, employees on the jobsite, or just regular people who are tracking their exercise, smart meters can give utility customers the tools they need to make smart energy-use decisions.
I really love this about our connected society. Better decisionmaking is what it’s all about—whether you’re a health provider using data to make treatment decisions, a manager in charge of overseeing a factory floor, or a small business owner trying to reduce energy costs.
I want to leave you with a bit of controversy as food for thought. During my research I came across an interesting study from the University of Twente in the Netherlands that claims some electronic energy meters give false readings up to 582% higher than they should be.
Obviously, this caught my attention. The study is limited only to Dutch households, and it’s not made clear which device manufacturers were included. Encouraged by rumors that smart meters were producing higher-than-usual readings, a group of professors got together and tested nine different meters. The experiment suggested five of the nine meters gave readings that were higher than the actual amount of power consumed—up to 582% higher.
Interestingly, two of the meters gave readings that were 30% lower than the actual amount of power consumed. It’s hard to know exactly what to make of these findings.
I personally think it’s good food for thought, but we can’t read too much into this particular experiment because the size and scope is so limited.
What we can do as an industry is look for ways to spur innovation and adoption in the smart-meter space, perhaps by encouraging healthy competition among manufacturers and educating utilities, consumers, and businesses about the benefits of this technology.
It certainly raises a lot questions and gives us all a lot to think, and even more to work towards here in the states.
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