Share

Q&A: Accenture on smart metering

Accenture's Waseem Taqqali discusses smart metering.

Share
Smart metering, COMMENT

Waseem Taqqali, utilities industry manager, Accenture Middle East, on the regional prospects for smart metering.

What is the current status of smart metering in the Middle East? What is influencing investment decisions on smart metering?

The deployment of smart meters in the Middle East is still in its early stages, and electricity and water utilities in the region can be split into three groups. The first group, accounting for the majority of utility companies, in countries such as Jordan, Lebanon, Syria, Iraq, Yemen, and even Oman and Bahrain in the Gulf, have yet to start the introduction of smart meters. The second group, such as utilities in Saudi Arabia, Qatar and Dubai, are still in the pilot phase, while the third are actively deploying the technology. But only one utility in the UAE, Abu Dhabi’s ADWEA, has fully completed the phase-one roll-out of smart meters for electricity and water.

Having a regulatory mandate in place was a key factor in ADWEA’s decision to deploy smart metering, while the business incentives include improved metering accuracy, lower operating costs and potential reductions in peak demand.

But the installation costs can be significant, particularly in populous countries like Egypt and Saudi Arabia. In some cases awareness of the benefits of smart metering is still limited, while the two-way communications infrastructure needed to operate smart metering is also lacking. And sometimes the government departments responsible for electricity and water tariffs are simply reluctant to break old habits and adopt the new pricing designs available with smart metering, such as Time of Use (ToU) and Critical Peak Price (CPP) tariffs.

The biggest barrier is arguably the fact that most utility companies in the Middle East are government owned and still provide heavily discounted water and electricity, often below the cost of production. So with consumers having little incentive to manage consumption, and producers having no motivation to generate a profit, smart metering is yet to be given the priority it deserves.

Why is it important that the smart metering is implemented across the Middle East? What are the key benefits for utilities in the Middle East?

Smart metering is one tool in managing the increasingly unsustainable demand for water and electricity in the Middle East more responsibly. It will also become more and more important as energy sources diversify. The deployment of solar energy in the Gulf to address domestic power demand is gathering pace but the reliability and quality of power generated by renewable sources can vary. That has been the experience overseas in countries with a relatively high penetration of renewable energies. Smart metering may therefore become extremely important in ensuring the smooth adoption of clean energies in the Middle East, helping to maintain security of supply and the satisfaction of the end-user.

Smart metering allows utilities to forecast demand more accurately and therefore plan network expansion more confidently. The fact that some countries in the Middle East have capacity shortages while others enjoy relative over-capacity indicates a lack of accurate data for proper forecasting.

Smart metering can lead to reductions in peak demand, helping to defer the huge capital investments needed to manage the power and water requirements of the region’s expanding urban environments and infrastructure. It also reduces non-technical losses, such as theft and losses due to poor equipment maintenance and calculation errors.

What are the key technologies related to smart metering? How are they developing? What kind of advantages do they bring?

Demand for cooling accounts for the majority of electricity demand in the Middle East in the summer, especially in the Gulf. Therefore, ‘demand response’, ‘smart thermostat’ and ‘home display’ are key smart metering technologies designed to shave peak demand.

Advanced Distribution Management Systems (ADMS), with control applications for the Smart Power Grid, and Outage Management Systems (OMS) are additional technologies designed to improve the reliability and availability of supply. These advances reduce the cost of infrastructure upgrades by shifting investment away from expensive new power lines to cheaper smart computing technologies.

What are the challenges facing the adoption of smart metering in the region?

The main challenge is the enormous investment needed to introduce the technology in countries where there is a large number of accounts, such as Egypt and Saudi Arabia. The low awareness of the operational and business benefits also needs to be addressed, while cultural barriers remain in some cases to the adoption of smart metering technologies, such as home displays and demand response. Improvements in communications infrastructure also need to be made to accommodate the new technology in some countries. Greater flexibility in introducing new tariff structures will also smooth the adoption of smart metering technology.

What do you see as the future opportunities for smart metering in the Middle East? Are there particular projects of interest? What country is leading the way?

The future for smart metering in the Middle East is bright and the UAE in particular will make considerable advances in 2014. A road map is already in place and a pilot project was introduced by Dubai last year. Abu Dhabi will also expand smart metering for new and existing customers. We expect Saudi Arabia and Qatar to follow in the UAE’s footsteps in a few years, while other countries may take longer.

Newsletter

Most Popular