Obstacles and solutions to smart metering application in the utilities sector

Smart metering

“The rate of growth in electricity consumption is projected to slow, yet consumption is still expected to increase by 29% from 2012 to 2040.” U.S. Energy Information Administration (May 7, 2014)

Many major cities in the world are planning the installation of smart meters in homes and businesses. Utility companies recognize the benefit of smart metering; it’s considered a benefit for both suppliers and consumers. From the consumer’s perspective, smart meters offer households and businesses the chance to understand and reduce their energy usage in much greater detail than previously possible. On the other hand, smart meters assist utility companies (gas, electricity, water) to improve the accuracy of billing and cut visits to properties to read meters.

In reality, the installation process is slower than most of us expected, according to research conducted by Ovum. What are the obstacles that prevent utility companies from using smart metering? Ovum found out that many utilities firms have commonly struggled with accuracy of their customer and billing data, the prospect of mass smart metering could present a considerable challenge.

One of the biggest challenges is the exponential growth of data. From a billing perspective, for example, if smart meters read every half hour, it’s 17,520 meter readings a year. Scalability is a key concern to the current smart meter management systems. How to ensure every meter message gets through to the back-end server? Data validation can place a substantial Input/output (I/O) load on servers.

So is smart metering application a mission impossible? Actually, most of the utility companies across the globe for gas, electricity and water have started rolling out smart metering infrastructure, which has called for millions of dollars in initial infrastructure cost, but as a medium to long term ROI, the step has shown significant improvement in improved revenue stream for suppliers and savings for careful spending consumers.

Successful utility companies are investing heavily on operational technology, streamlining business processes and IT, often simultaneously. It also helps them to be considered green towards the environment. With an appropriate real-time convergent billing and big data analytics solution, suppliers can develop an effective, smart and creative pricing model to share their profits with consumers. For example, time-of-use (TOU), seasonal benefits, volume used / month, bundling various offerings (gas, electricity, energy, water), and many more.

Although implementations may vary, Gartner has noted that calculating billing determinants and aggregating meter reads are one of the key functions that Master Data Management (MDM) should support.