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by Will McNamara, KEMA Consulting
A recent KEMA report confirms that the Smart Grid starts with an advanced metering infrastructure (AMI). What's more, many U.S. utilities have decided that the time has come to move ahead with AMI implementations. (SGN heard similar comments at the recent Smart Meters West Coast conference hosted by Metering.com.)
Headquartered in the Netherlands, KEMA provides management and technical services to utilities and others in the energy sector. It recently surveyed 14 utilities about their plans for advanced metering and smart grid activities. When combined with KEMA's own research and insights, the survey provides some useful benchmarks for anyone who wants to know the pulse of the market.
The Time Is Now KEMA reports that utilities repeatedly said that “the time is now” for AMI deployments. (At the recent Smart Metering West Coast conference, many vendors said they had so much business that they actually welcomed RFP postponments.)
Many survey respondents believe the technology is near maturity and reasonably priced and thus deserves serious consideration. The increasing cost of electricity and the need for energy efficiency are also drivers forcing many utilities to look closer at the impact of 'time of use' (TOU) rates or other energy efficient programs that AMI technology supports.
Data KEMA compiled related to current or planned AMI pilots and large-scale deployments. The data collected offered the following market averages:
Vendors -- 'Future Proof' Your Solutions Vendors should be aware of utility's technology preferences. They are increasingly looking for interoperable solutions that can be mixed and matched with their current systems and with systems adopted down the road. In other words, ‘future proof” architectures.
In the world of AMI solutions – whether limited to collecting meter data or extended to broader SmartGrid applications – utilities are faced with a growing and maturing mix of communications options. Among the alternatives are radio frequency (RF), power line communications (PLC), broadband over powerlines (BPL), cellular communications, WiFi, or some combination therein. RF appears to be the dominant choice for the utilities KEMA interviewed, though it is often used in combination with BPL or PLC interfaces.
Wireless mesh technology is gaining significance in part due to its ability to incorporate high functionality and competitive costs. It also appears to be better suited for some urban areas than traditional RF-configured systems that typically require meter data collection at one collector point.
Vendors -- Incorporate Standards Many utilities referred to American National Standards Institute (ANSI) standard C.12.22 that provides an application layer standard for network communications. This standard is designed to transport C.12.19 standard data tables in electric metering over any physical medium.
The manner by which the AMI network delivers the data packet – whether by use of cellular communications, WiFi, powerline communications, or RF – should not matter to the receiver, and the data content should not concern the AMI network. Put another way, the ANSI C.12.22 standard achieves the goal of being agnostic to the communications technology chosen by a particular utility.
Utilities -- Several Ways to Pay for AMI Utilities are understandably concerned about the expense of AMI, given that AMI systems typically cost hundreds of millions – or even billions – of dollars. More specifically, utilities are examining how to recover costs for AMI implementations.
Utilities planning or developing AMI initiatives generally seek to recover the difference between total AMI infrastructure cost and the operational savings it generates. It appears that utilities are typically pursuing two regulatory strategies with regard to rate recovery:
Market Drivers Give AMI a Momentum With little variation, responders agree that the three main drivers for AMI are: 1. Regulatory directives/mandates; 2. Desire for customer service enhancements; and 3. Desire for greater operational efficiencies. The AMI market certainly received a major push from the Energy Policy Act of 2005. Section 1252 states that all utilities, not just IOUs, will “provide customers with time-based rates and the ability to receive and respond to electricity price signals.” Smart Grid News believes that HR 3221, the federal Smart Grid Facilitation Act, now in conference, will further accelerate delployment. HR 3221 offers over $1.25B in matching federal grants for Smart Grid technology implementation through 2012. Additionally, some state regulators have mandated AMI. The most obvious example includes California. Other states with aggressive regulatory policies on AMI include New York, Michigan, Maryland, and Texas. These mandates dovetail with utilities’ focus on improving customer service and operational efficiencies. Key internal objectives for AMI include improving field service efficiencies for remote connects/disconnects, reliability (including both grid congestion and outage restoration/management), and operational cost savings. Others cite “maturing” technology as a driving factor, stating they were driven to evaluate AMI because the technology necessary to support smart metering and networks is finally available. Regulators’ current and future desires to increase demand response and energy efficiency/conservation are also pushing utilities toward AMI. Indeed, utilities are now analyzing how AMI will provide both short- and long-term benefits, improvements that could ultimately change how utilities operate now – and for decades in the future. Adapted with permission from KEMA. Will McNamara is a principal consultant for KEMA.
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