smart meters and ami markets - global perspective

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


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


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


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


13

20102010 20152015 20202020

DriversDrivers


ImpactImpact

Drivers and Restraints – New Zealand

Demand side participation

20102010 20152015 20202020


Restraints

Lack of standards

Ageing workforce

Compliance deadline of 2015

Highly competitive &Deregulated market


14

20102010 20152015 20202020

DriversDrivers


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


15

20102010 20152015 20202020

DriversDrivers


ImpactImpact

Drivers and Restraints – South Korea

Energy Security

20102010 20152015 20202020


Restraints

Lack of standards

Lack of private funding

Boosting technology export

Smart grid implementation


16

20102010 20152015 20202020

DriversDrivers


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


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


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


CAGR of 71% from 2009-2017

Japan


CAGR of 85% from 2009-2017

Taiwan

Market size of 600 million USD over the next 9 years

CAGR of 137% from 2009-2017


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


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


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


44%

92%81%

55%

19%6%2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Residential Commercial Industrial

Smart

Prepaid

Credit


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


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

smart meters and ami markets - global perspective

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