In the latter part of the 20th century, North American utilities led the world in automating metering systems. At times, various analysts estimated that anywhere from 80 percent to 95 percent of world AMR deployments were at North American utilities.
Since the turn of the century, European utilities lead the world in deploying next-generation metering systems—providing solid use cases for North American utilities to emulate. Next-generation systems go beyond traditional AMR and include smart meters and advanced metering infrastructure (AMI) to offer value-added and smart grid applications. As North America makes the move toward AMI systems, much can be learned from the European deployments.
Starting in 2000, European utilities leapt to the forefront of metering systems technology. Led first by Enel in Italy, which has now deployed more than 27 million smart meters in its system, and followed by utilities in countries such as Sweden and the Netherlands, these utilities have completely bypassed traditional AMR and moved to next-generation metering systems. Unlike traditional AMR systems, these new systems provide fast, secure and highly reliable two-way communications to all meters. The meters themselves offer a new level of functionality for residential customers, including fully digital designs with integrated disconnects, remote configurability and programmability, detailed power quality measurements, support for a variety of rate plans, multi-channel data logging capability, advanced theft and tamper detection, and more.
The vast superiority of next-generation metering over AMR systems leads to several key questions for North American utilities: Why have next-generation systems taken hold in Europe first? Is the European experience relevant to utilities in North America and, if so, what should be drawn from it?
Given the history of AMR adoption within North America, some might have expected the next-generation systems to take hold there first. However, many North American utilities have already made an investment in AMR systems, so their relatively newly purchased AMR equipment often slows the move to new, more advanced systems. In Europe, with little investment in legacy AMR systems, European utilities are able to move forward more quickly toward advanced metering systems.
The regulatory and political environment has also played an important role. The European Union began opening markets and unbundling services in late 1996. Energy conservation has been an important part of European energy policy for some time. While North America also has growing political and regulatory forces moving the market, this is a much more recent phenomenon. In many ways North America is following the same arc as Europe, just shifted by several years.
However, the relevance of European advanced metering deployments is often questioned due to perceived technical differences between European and North American power grids. While differences exist, so to do similarities and much can be learned from these European deployments.
A key difference is that European utilities typically service more residences per transformer than North American utilities do. Many European utilities have taken advantage of low-cost, bidirectional localized power line communications systems to enable a cluster of meters on a given low-voltage transformer to share a single radio frequency (RF) modem, which tends to be one of the more expensive components in the system. The European approach has proved to be reliable, secure and cost effective. In contrast, basic AMR systems have typically required an RF card in every meter. While North American utilities may not experience the same magnitude of per-customer cost reduction using this approach, there is still a potentially significant gain. Even sharing the RF card in one meter with two other meters on the same transformer represents a 67 percent reduction in RF equipment cost and management complexity. Also, it should be noted that this difference of number of customers per transformer is not prevalent throughout Europe. There are many countries such as Sweden where the number of customers per transformer is more similar to North America, and they still are able to justify and utilize the same AMI approach as European utilities that have densely populated areas.
Swedish utility Vattenfall is rolling out 600,000 advanced meters based on Echelon’s Networked Energy Services system.
Another often-cited difference is that disconnects for North American meters are more expensive than their European counterparts due to the higher amperage provided to residential customers (200 Amps versus 100 Amps). While North American disconnects may have historically been more expensive, much of this is due to low volume from suppliers and the use of a retrofit design for electro-mechanical meters. When included as an integral part of the product design from day one, the disconnect cost can be dramatically reduced. Many of the advanced features and operating improvements of advanced systems stem from a remotely controllable disconnect with configurable current limiting capabilities, including remote service disconnect and reconnect, lifeline service, remote upgrade, intelligent load curtailment, and prepaid metering. By including smart meters with under-the-glass integrated disconnect, utilities are able to obtain these extensive benefits.
One other important but often overlooked difference is that North America has a significantly higher percentage of outdoor meters. In contrast, almost all Europe’s meters are indoors. This difference actually represents a significant advantage for North American utilities because it reduces installation costs and logistical complexity. This assists North American utilities with the cost justification needed to deploy AMI systems.
Three examples of utilities deploying next-generation metering systems are Italy’s Enel and Sweden’s E.ON and Vattenfall. In Italy, Enel’s Contatore Elettronico Project replaced all of the utility’s stand-alone electricity meters with communicating solid-state meters networked via a hybrid -wireless/ANSI 709 power line system at more than 27 million customer sites. This is the largest meter replacement and upgrade project ever undertaken. The actual deployment started in 2001 and was completed in 2006. Published estimates from Enel have shown savings of €500 million per year gained from the €2 billion project—an astonishing four-year ROI. The savings are obtained by the ability to perform various functions remotely and respond more effectively to customers. For example, because of its advanced metering system, Enel estimates it will make 6 million fewer field visits each year. Enel is able to respond to 98 percent of customer requests within 24 hours. Also, Enel has created customized tariff plans for its customers, which can be dispatched over the network into the meters without requiring a field visit. In addition, the system has provided improved network planning and load balancing, while increasing fraud detection.
Currently, Sweden is in the midst of replacing its existing metering infrastructure to comply with government regulations designed to promote an open and efficient energy market. The Swedish Energy Authority (STEM) has estimated that more frequent readings alone will benefit the country’s economy by about €65 million per year, not to mention all of the additional utility-related applications. Two large examples of Swedish utilities adopting next-generation systems as part of this rollout are Vattenfall, which is rolling out 600,000 advanced meters based on Echelon’s Networked Energy Services (NES) system and E.ON Sweden, which is in the early stages of rolling out 370,000 advanced NES meters. Vattenfall is using its advanced metering system for additional functions beyond remote meter reading, such as remote disconnect and reconnect, load control associated with demand management, power outage recording, and power quality monitoring and reporting. These are all functions that benefit North American utilities as well.
Although there may be differences between North American and European utilities, the importance of these has often been overemphasized or misinterpreted. Advanced metering systems have essential advantages and common attributes no matter where they are installed. Europe has taken the lead in implementing such systems. These represent live, large, working examples of next-generation systems and new deployment models that North American utilities can learn from and build upon when looking at how they can use AMI systems going forward.
About the Author: Jeff Lund is vice president, business development & corporate marketing, Echelon Corporation. He has a master of business administration degree from the Wharton School of the University of Pennsylvania and a bachelor of science degree in Electrical and Computer Engineering from the University of California at Davis. Jeff serves on the Board of Directors of the OSGi Alliance.