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Advanced metering is key to getting utilities operating efficiently

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In the mid-term, smart grids will enable demand-side management. (GETTY IMAGES)
In the mid-term, smart grids will enable demand-side management. (GETTY IMAGES)

Advanced and intelligent metering is key to getting local utilities operating more efficiently

When the first construction boom hit Dubai in 2005, there was a steady evolution in what was expected of projects, be it better working conditions for labourers, more efficient working practices or sustainable development.

As the region begins to recover from a barren few years, there is a notably greater emphasis on transparency, environmental awareness and efficiency. This can be seen in the growth of smart metering technology, not just the awareness, but the desire to implement it.

“The move towards Advanced Metering Infrastructure (AMI) technology and smart grid solutions can be attributed mainly to new pressures that utility companies are experiencing,” says Abdelrahman Abdellatif, principle consultant, industry solutions with Huawei.

“From regulators needing to find ways to reduce carbon footprints, customers wanting greater transparency over the power, gas or water that they consume, to utility companies wanting to increase the efficiency of their operations and maintenance.”

In October, CESI Middle East announced it had been selected by the electricity & co-generation authority of Saudi Arabia (ECRA) to develop policies, specification requirements and an implementation plan for smart metering and advanced metering infrastructure.

The new mandate, the first to be undertaken in Saudi Arabia, gives further impetus to the development of future plans based on renewable energy across the Middle East as the implementation of smart grids allows for a switch from conventional energy to renewable energy.

Floris Schulze, managing director of CESI Middle East, said the project was an important step for Saudi Arabia and the region in moving towards the global future of electricity and energy and the implementation of newer, more advanced technologies and innovations that will deliver sustainable solutions and cost-saving through energy conservation.

“Smart metering and smart grids are a growing trend across the region and deserve serious consideration and formulation of a strategic plan for their deployment. The Middle East electricity market is forecasted to grow at an accelerated rate over the next few years due to higher consumption rates.

This results in the need for a successful implementation strategy that can bridge the gap between the supply and demand - a smart grid network makes for the ideal bridge where the goals of modernisation can meet those of a reliable public infrastructure,” said Schulze.

The study’s primary objectives will include: identifying Saudi Arabia’s current and future challenges that a smart meter/smart grid strategy can help overcome, investigating and reviewing available smart metering technologies that are best suited for the kingdom, assisting ECRA and representatives of the major electricity industry stakeholders in the kingdom to determine and finalise the salient functional requirements of proposed smart meters and advanced metering infrastructure to be deployed.

Research reports on the adoption of smart grid solution including AMI shows large potential in the MEA market, adds Abdellatif. But it isn’t as simple as presenting the technology to potential investors, it requires a substantial shift in thinking and a broader, more collaborative approach between various regulatory and municipal bodies.

Such projects are currently in the concept stage, which therefore necessitates building a business case, shaping the adoption roadmap and conducting business impact analysis.

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“To date, one of the major obstacles that is hindering the level of adoption of Smart Metering Technology is the lack of greater cooperation between telecom operators and utilities companies,” said Abdellatif.

“Both telecom operators and utility entities need to work closer together so that they can provide more attractive business models based on managed services to utility companies. For example, utility companies can better manage operational costs by deploying cellular-enabled smart metering solutions where charges are not monthly on each SIM card, but rather based on an overall flat rate.”

“It is considered a “ MUST” now…it is the planning, product and implementation costs that are keeping it from going fast forward,” concurs Richard Menezes at Utico.

Technologically, the current focus is on wireless technology, which is evolving rapidly as costs decrease. “The technological focus, we believe, will be towards adopting wireless smart metering embedded with this type of connectivity.

Products that best demonstrate this are with cellular communications such as LTE/3G/4G. In this domain, Huawei is well positioned as a global market leader of mobile technology and the number one solutions provider in the Middle East region,” said Abdellatif.

Such technology, when embedded with cellular connectivity has numerous functional and technical advantages over smart metering systems. Whilst CAPEX cost appears high at first, the ‘total cost of ownership’ will be greatly reduced.

“Utility companies are looking for automated (and autonomous) advanced metering solutions that allow them to focus more on their core business, which is generating and delivering power. The main advantage of cellular-enabled smart meters is that it allows utility companies to do just that,” adds Abdellatif.

It cannot be denied that people are sitting up and taking note. In his keynote presentation at the Fleming Gulf’s second Annual Smart Grids and Smart Meters Summit in Abu Dhabi, Dr Amro Farid, Assistant Professor, Engineering Systems and Management at Masdar Institute of Science & Technology, said smart grids offer a critical enabling technology to achieving objectives laid out in Abu Dhabi’s 2030 Economic Vision. Although he stated much needed to still be done to develop comprehensive and holistic methods of assessing system performance and reliability.

The global smart meter market, which experienced double digit growth during 2006-2011, is projected to grow further in 2012 with a compound annual growth rate (CAGR) of 12% through 2017 and $8.2bn, according to Lucintel, a leading global management consulting and market research firm.

The report titled 'Growth Opportunities in Global Smart Meters Market 2012-2017: Trends, Forecast, and Market Share Analysis' adds that with increased deployment by the electric utilities, smart meters are rapidly being adopted around the world as part of larger smart grid initiatives.

“In the near term, smart meters will deliver greater information to customers on their bills and electricity usage patterns and allow utilities to provide greater customer support in key functionality like outage management, power quality support, and mobile workforce deployment,” says Dr Farid.

“In the mid-term smart grids can help to enable demand side management thus saving millions of dirhams in potential investment into new thermal power generation. Smart grids finally will enable the high penetration of renewable energy resources like solar and wind energy; thus allowing the UAE to achieve its 7% commitment to renewable energy.”

In August, PowerOneData International, a smart grid company that offers AMI, automated smart meters and collector units to utilities, municipalities and systems integrators within the energy industry announced its collaboration with SourceEdge Software Technologies to market AMI solutions in the Middle East.

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This will, according to Phil Nuciola, chairman and CEO, “…hasten the market acceptance of our AMI solutions to target captive industrial markets such as large steel production companies and military installations, where power is purchased and redistributed within a captive audience.”

In June a new study was released by the Northeast Group on smart metering which said the MENA region stands to make a minimum saving of $300 million for Gulf countries.

The study, which was titled ‘Middle East & North Africa Smart Grid: Market Forecast (2011-2022) projects the smart metering market will reach 16.1 million units by 2022 with cumulative capital expenditure of $3.9 billion. The majority will be in the Gulf, where Saudi Arabia and UAE lead the way. By 2022, 86% of homes and businesses will have smart meters.

MENA countries outside the Gulf will develop at a notably slower pace, due primarily to political risk. Yet they still represent larger market sizes.

"MENA countries are also aggressively pursuing renewable sources of energy, highlighted by Saudi Arabia's recent announcement that it is aiming to spend $109 billion to develop 41 GW of solar capacity over the next 20 years. Smart grid technologies will be instrumental in helping these countries incorporate intermittent renewable resources," according to Northeast Group.

Although, the pace of adoption for smart metering solutions is still considered slow compared with other regions in the world such as North America, Europe and Asia, the expectation within the field is that demand is to increase exponentially in the near future as businesses quickly come to realise the need to improve efficiency and customer experience whilst needing to meet new regulations. Such actions are becoming a top priority for utility companies in the region.

“In general, most utility projects in the Gulf are state-driven. Consequently, government funding, either directly or indirectly, for Smart Grid projects is a factor that determines the adoption levels and pace of smart grid solutions in the region,” said Abdullatif.

One method to offer a more seamless transition to smart metering is through e-billing. This can offer dynamic tariffs to end-users when they consume electricity, water and gas.

This is considered an attractive benefit for both the utility company and end-user. Although e-billing systems are implemented in the later phases of a typical smart grid project, having AMI/AMR and meter data management (MDM) solutions in place are ‘a prerequisite’, added Abdellatif.

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