Smart Meters and AMI Markets -Global Perspective
22
AMI Technology Trends & Evolution
Agenda
1
2
3
APAC AMI Markets
Key Industry Challenges4
5
AMI Benefits & Features
AMI Introduction and Value Chain
European Smart Meters Markets6
South African Smart Meters Markets7
US AMI Markets8
3
Utility Metering
Utility
Legacy System vs AMI Systems
Consumer
Electricity Meter
Cannot communicate
to/from consumer
One-way communication
Utility
AMI
RF MESHPLCBPL
RF MESHPLCBPL
MDMS
Utility MDMS WAN LAN MeteringConsumer
CDMAGSM
CDMAGSM
HAN
In home Display
Two-way communication
Smart Meter
4
AMI Value chain
MDMS
Process and store meter dataMajor PlayersItron, eMeter, SAP
Wide Area Network (WAN) Public/Private
Network
Local Area Network (LAN)
RF mesh, PLC, BPL, WiMax, GPRS
Home Area
Network (HAN) Zigbee, Home plug
WiFi, Z-Wave, Wavenis,
DigitalstromMajor Players
GridConnect, Freescale, MicroChip
Smart Meter
Data collection & storage
Major PlayersGE, Landis+Gyr, PRI,
Elster
System Integrators
Consultants
Installation Contractors
Source: Frost & Sullivan
Major PlayersItron, Elster, SSN, EKA
Systems, Trilliant
Meter Vendors Communication Vendors IT Vendors
5
Advanced Metering Benefits
Reduced meter reading errors
Reduced billing errorsReduced meter reading costs
Prepayment option
Physical privacy for consumers
Half Hourly usage data
Reduced Energy bills
6
AMI Features
22
33
44
55
66
77
11
Remote reading and also ability to manually readRemote reading and also ability to manually read
Remote connection and disconnectionRemote connection and disconnection
Two-way communication and Communication path to in-home displayTwo-way communication and Communication path to in-home display
Visual display on meterVisual display on meter
Meter settings reconfiguration (remote)Meter settings reconfiguration (remote)
Tamper detectionTamper detection
Record at least Hourly Usage of dataRecord at least Hourly Usage of data
88
99
1010
1111
Outage notificationOutage notification
Prepayment optionPrepayment option
Time of useTime of use
Load ControlLoad Control
1212 Measurement of active/reactive energy flow (To allow for distributed
generation)
Measurement of active/reactive energy flow (To allow for distributed
generation)
7
2011 2012 20132010 2014
AMI Technology Evolution
2015 2016 2017 2018 2019 2020
Source: Frost & Sullivan.Source: Frost & Sullivan.
Remote Meter Configuration
In-Home Display
Time of use
Demand Response
Energy Management
Systems
Real time communication
Outage Notification
Remote Connect/ Disconnect
Remote meter reading
8
Technology Trends – Communication Technology Penetration
AMI Technologies
AMI Technologies
WiMAXWiMAX
GPRSGPRS
RFRF
2010 2015 2020
PLCPLC
Low Medium High
Source: Frost & Sullivan
9
Lack of Standard Protocols and Interoperability
Initial upfront cost and cost recovery
Advanced Metering - Industry Challenges
Risk on information security clouding consumers judgment
Fear of losing power over load control by the utilities
Source: Frost & Sullivan
Issue of ”Stranded Assets” and evolving technology
10
AMI – Roll out Cost breakdown for Projects
Smart Meter and its installation form the majority of cost involved in AMI implementation
Source: Frost & Sullivan
11
Asia Pacific AMI
12
20102010 20152015 20202020
DriversDrivers
High Medium Low High Medium Low
ImpactImpact
Drivers and Restraints - Australia
Government Mandate
20102010 20152015 20202020
Rapidly changingtechnology
Restraints
Lack of standards
Rising cost to consumers
Enhanced Customer information
Operational Efficiency
Source: Frost & Sullivan.Source: Frost & Sullivan.
13
20102010 20152015 20202020
DriversDrivers
High Medium Low High Medium Low
ImpactImpact
Drivers and Restraints – New Zealand
Demand side participation
20102010 20152015 20202020
Rapidly changingtechnology
Restraints
Lack of standards
Ageing workforce
Compliance deadline of 2015
Highly competitive &Deregulated market
Source: Frost & Sullivan.Source: Frost & Sullivan.
14
20102010 20152015 20202020
DriversDrivers
High Medium Low High Medium Low
ImpactImpact
Drivers and Restraints – Taiwan
Reduced energy wastage
20102010 20152015 20202020
Regulation
Restraints
Lack of standards
Lack of funding
Reduction in peak load
Reduction in Green HouseGas emissions
Source: Frost & Sullivan.Source: Frost & Sullivan.
15
20102010 20152015 20202020
DriversDrivers
High Medium Low High Medium Low
ImpactImpact
Drivers and Restraints – South Korea
Energy Security
20102010 20152015 20202020
Rapidly changingtechnology
Restraints
Lack of standards
Lack of private funding
Boosting technology export
Smart grid implementation
Source: Frost & Sullivan.Source: Frost & Sullivan.
16
20102010 20152015 20202020
DriversDrivers
High Medium Low High Medium Low
ImpactImpact
Drivers and Restraints – Japan
Infrastructure for EVs
20102010 20152015 20202020
No clarity on technology to deploy
Restraints
Efficient grid
Vertically integrated power suppliers
Developing new industries and enhanced services
Integration of renewable energy into grid
Source: Frost & Sullivan.Source: Frost & Sullivan.
17
Asia Pacific AMI Market Size
• Total APAC AMI market is expected to generate a cumulative demand of 41 million meter units by 2017
• The market is estimated to generate revenues of about US$12.5 billion from 2009 through 2017
• The market is estimated to have a CAGR of 69.32% for the period from 2009-2017
• The growth will be fuelled by AMI activity in Australia, New Zealand, South Korea, Japan and Taiwan
Source: Frost & Sullivan
Asia Pacific AMI Market size (USD million)
0.00
500.00
1000.00
1500.00
2000.00
2500.00
Year
US
D m
illi
on
0.00%100.00%200.00%300.00%400.00%500.00%600.00%700.00%
% g
row
th
Asia Pacif ic AMI Market Size (USD millions) % grow th
18
Key Growth Markets – SEA/NA & Pacific
Australia
Market size of 4.02 billion USD over the next 9 years
CAGR of 70.45% from 2009-2017
New Zealand
Market size of 525 million USD over the next 9 years
CAGR of 35% from 2009-2017
South Korea
Market size of 3.15 billion USD over the next 9 years
CAGR of 71% from 2009-2017
Japan
Market size of 4.16 billion USD over the next 9 years
CAGR of 85% from 2009-2017
Taiwan
Market size of 600 million USD over the next 9 years
CAGR of 137% from 2009-2017
Source: Frost & Sullivan
19
Asia Pacific Summary
The Asia Pacific advanced metering industry is in a nascent stage with rollouts expected to begin around 2011-2012The Asia Pacific advanced metering industry is in a nascent stage with rollouts expected to begin around 2011-2012
The Asia Pacific AMI market will be worth US$12.5 billion through 2017 and is likely to grow at at a CAGR of 69.3%
(2009-2017)The Asia Pacific AMI market will be worth US$12.5 billion through 2017 and is likely to grow at at a CAGR of 69.3%
(2009-2017)
Thailand , Malaysia and Philippines are currently focused only on automated meter reading capabilities for
commercial & industrial consumers. No plans yet for a large scale residential roll outThailand , Malaysia and Philippines are currently focused only on automated meter reading capabilities for
commercial & industrial consumers. No plans yet for a large scale residential roll out
Singapore is expected to begin rollout of AMI around 2015, with basic smart meter functionalitySingapore is expected to begin rollout of AMI around 2015, with basic smart meter functionality
Some of the key drivers for AMI in Asia Pacific include regulatory mandates, choice for customers, technology
upgrades, energy management and a move towards smart grids architectureSome of the key drivers for AMI in Asia Pacific include regulatory mandates, choice for customers, technology
upgrades, energy management and a move towards smart grids architecture
The growth in AMI is fuelled by Australia/New Zealand in the short term & Korea, Japan and Taiwan in the long termThe growth in AMI is fuelled by Australia/New Zealand in the short term & Korea, Japan and Taiwan in the long term
Major market restraints include financing issues, interoperability and lack of standards, limited experience &
reference instatallation s for the technology, and justifying the cost-benefit of AMI roll outMajor market restraints include financing issues, interoperability and lack of standards, limited experience &
reference instatallation s for the technology, and justifying the cost-benefit of AMI roll out
20
Europe Smart Meters
21
Smart MeterKey Drivers & Restraints
Smart meters are imperative for
implementation of smart grid
Smart Meters considered active towards efficient
energy management in T&D
Increasing price of electricity
encouraging the need to reduce
expenses
Well defined legislations and
directives enabling utilities to adopt smart meters
Source: Frost & Sullivan.Source: Frost & Sullivan.
Lack of a standardization in communication
protocols leading to problems of
interoperability
Global Economic Slump slowing down
new investments towards smart meter and grid technology
No clarity on an apt
business case inhibiting market
adoption
Ma
rke
t D
riv
ers
Ma
rke
t R
es
tra
ints
22
Europe Market Measurements (Smart Meters)
Smart Meters – Europe, 2008
Source: Frost & Sullivan
23
Europe Smart MeterGeographical Hotspots
Propensity towards smart meter investments
Deg
ree
of
Imp
lem
enta
tio
n
Low
High
High
Sweden
Italy
NetherlandsFrance
Denmark
Finland
United Kingdom
Germany
Austria
Spain
CyprusLatvia
Czech Republic
Portugal
Belgium
Poland
Ireland
Malta
24
Europe Summary
The European smart meter industry is in a nascent stage with commercialisation expected to happen by 2012The European smart meter industry is in a nascent stage with commercialisation expected to happen by 2012
Smart meters deployment are an integral part of smart gridSmart meters deployment are an integral part of smart grid
The scope for smart grids does not end with the energy industry, but extends across different industriesThe scope for smart grids does not end with the energy industry, but extends across different industries
Europe has been very proactive with deployment almost complete in Italy and SwedenEurope has been very proactive with deployment almost complete in Italy and Sweden
Lack of clarity on an ideal business case and interoperability continue to cloud investors rationalLack of clarity on an ideal business case and interoperability continue to cloud investors rational
Europe – push market – smart meter and smart grid markets are legislation drivenEurope – push market – smart meter and smart grid markets are legislation driven
25
South Africa Smart Meters
26
Market Drivers
Government legislation
Government legislation
The Amended Electricity Regulations Act of 2006 specifies that all end users
with a monthly consumption of 500 kW or greater needs to have two-way
communication smart metering systems installed by 2012.
The Amended Electricity Regulations Act of 2006 specifies that all end users
with a monthly consumption of 500 kW or greater needs to have two-way
communication smart metering systems installed by 2012.
Decrease in theft/fraud
Decrease in theft/fraud
Smart meters will enable energy distributors to detect meter tampering or
electricity theft and remotely disconnect the electricity supply to these
meters on detection.
Smart meters will enable energy distributors to detect meter tampering or
electricity theft and remotely disconnect the electricity supply to these
meters on detection.
Demand side management
Demand side management
Demand side management is expected to reduce energy consumption in
the country by 3,000 MW by 2012 and Eskom has identified energy-efficient
metering as a key initiative for the success of this program.
Demand side management is expected to reduce energy consumption in
the country by 3,000 MW by 2012 and Eskom has identified energy-efficient
metering as a key initiative for the success of this program.
Replacement of obsolete
technology
Replacement of obsolete
technology
When replacing meters due to natural wear and tear, electricity distributors
wish to replace these meters with the latest metering technology in order to
avoid further subsequent replacement or conversion costs.
When replacing meters due to natural wear and tear, electricity distributors
wish to replace these meters with the latest metering technology in order to
avoid further subsequent replacement or conversion costs.
27
Market Restraints
Substantial investment
Substantial investment
Implementation of mass smart meter rollouts represent a large capital
investment by municipalities.
Implementation of mass smart meter rollouts represent a large capital
investment by municipalities.
Compatibility standards
Compatibility standards
There is currently no set compatibility specifications for the national
standardization of the smart metering network. Until the NRS049 has been
reviewed and approved, electricity distributors will not tender for substantial
rollouts of smart metering systems.
There is currently no set compatibility specifications for the national
standardization of the smart metering network. Until the NRS049 has been
reviewed and approved, electricity distributors will not tender for substantial
rollouts of smart metering systems.
Communication technology
Communication technology
Potential Communication technologies to be used for the operations of
smart metering systems is still undecided within many municipal regions.
Potential Communication technologies to be used for the operations of
smart metering systems is still undecided within many municipal regions.
Expertise shortageExpertise shortage
Smart metering represents a relatively new technological development
within the metering industry of South Africa. In this regard, there exists a
certain lack of expertise within municipalities with regards to installation,
maintenance and repair of the product, as well as its operations
Smart metering represents a relatively new technological development
within the metering industry of South Africa. In this regard, there exists a
certain lack of expertise within municipalities with regards to installation,
maintenance and repair of the product, as well as its operations
Consumer adoptionConsumer adoption Initial resistance to the adoption of smart meter technology is expected by
consumers, as it represents a forced change in consumer life style.
Initial resistance to the adoption of smart meter technology is expected by
consumers, as it represents a forced change in consumer life style.
28
South African Electricity Meters Market
• The electricity meter market within South Africa is segmented into three broad meter technologies: Credit meters, prepaid meters and smart meters.
• The total market size of the electricity meter market within South Africa is just over 11 million meters.
• Total current market growth: 3.6 percent (2008)
• Driven by electrification initiatives
• The smart meter market is expected to experience a period of rapid growth over the next five years
• Conversion initiatives
• Electrification initiatives
smart, 0.5%credit, 26%
prepaid, 74%
credit prepaid smart
Electricity Meter Market: Market share per product type (South Africa), 2008
Electricity Meter Market: Market Share per Product Type and Sector (South Africa), 2008
Source: Frost & Sullivan
44%
92%81%
55%
19%6%2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Residential Commercial Industrial
Smart
Prepaid
Credit
Source: Frost & Sullivan
29
Market Revenue
• The total revenue of the electricity meter market is expected to reach $50.5 million by 2014
• Growth in total market revenue is expected to increase substantially for the period 2009 - 2014
• This is due to the roll out of more expensive smart meter systems
• CAGR for product categories (2007 – 2014)
• credit meter market:: -6.13per cent
• prepaid meter market:: -5.9per cent
• smart meter market: 57.2 per cent
South Africa – Market Revenue
Total Revenue Forecasts (South Africa), 2007-2014
Smart Meters
Credit Meters
Prepaid Meters
Forecast Revenue Growth (South Africa), 2008 - 2014
Source: Frost & Sullivan
Smart Meters Prepaid Meters Credit Meters
2008 market size Forecasted market size (2014)
30
USA AMI
31
USA Market Measurements - AMI
32
Market Drivers and Restraints
33
USA – AMI Market Forecasts
34
Thank YouQ&A