October 31, 2016

The second wave of smart meters: a win–win situation for consumers and energy companies

Vegard Høynes

Project Manager, Tieto

Jan Berntzen

Lead Solution Architect, Tieto

Are smart meters finally ready to change the way we consume energy? The upcoming second wave of smart meters and advanced metering infrastructure (AMI) will deliver upgrades that have the potential to shake up the energy market. How can consumers take full advantage of the new features, and what are the key advantages of AMI to energy utilities?

Though smart meters are now common throughout the Nordic countries, they have not dramatically changed our lives—yet. Smart meters have been important in modernizing the metering processes, but they were only the first step towards advanced metering infrastructure (AMI). This integrated system of smart meters, communications networks and data management systems enables two-way communication between utilities and customers.

Today, the original equipment is nearing the end of its life—for example in Sweden the first smart meters were installed more than a decade ago. Today some suppliers no longer exist, spare parts are unavailable and operational errors have arisen as the equipment has gradually become old and outdated.

Sweden is now approaching the second wave of AMI—new energy regulations require the replacement of old smart meters with new ones with more advanced features: hourly measurements of both production and consumption, measuring energy delivery quality and a fuller integration of smart meter equipment into the homes of end-customers.

Empowering consumers and prosumers

Through AMI, the growing number of energy-conscious consumers will be able to measure their own energy consumption (and production), be billed for actual usage rather than monthly estimates and adapt to hourly energy price fluctuations.

Energy prices vary a lot during different times of the day. In the near future it is likely that people charging their electric cars will cause peaks in energy consumption when they return home from work.

Advanced metering infrastructure allows consumers to plan their own consumption, so energy can be used when it costs less. Every smart meter will have an interface, from which consumers can follow their consumption and access information about prices and fees. This transparency will help the energy-conscious customers become an integral part of the energy market,

Smart meters also enable more efficient micro-energy production throughout society. So-called prosumers (consumers who produce their own energy) can measure energy produced by their own solar panels and offer surplus energy to the energy market. Through aggregation, distributed generators and energy users can respond to market price and demand response signals.

Improved energy solutions through real-time data

Are consumers the only beneficiaries of AMI? Of course not—energy companies are sure to benefit as significantly from smart meters. Because smart meters constantly send information about the delivery quality, they assist companies with maintenance and locating faults.

Smart metering also enables real-time billing instead of billing based on estimates. The monitoring capability of meters continually checks the quality of electricity and if these standards are not met, meters automatically notify the company, to help them correct quality errors.

Catching the second wave

Because meters—especially in Sweden—are approaching their end of life and the transition to the Nordic hub is already underway, utility companies must now start preparing for the second wave of AMI. This will require operational and political processes, the renewal of regulations and of course, good planning. The migration process needs to be conducted in parallel with phasing out old meters, while paying close attention to operational side of the new meters, which can last over 15 years.

In our next blog post, we will further discuss how energy companies should plan out the migration process in order to ensure a successful implementation of new smart meters.

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