Abstract
Overview
Introduction
Migrating to a smart metering approach is being pushed by legislation in a
variety of countries. Nevertheless, it requires a significant overhaul of
existing systems. Understanding how to develop a business case and evaluate
the costs and benefits of migration is crucial if the most efficient solution
is to be found. A variety of internal challenges will also have to be overcome.
Scope
- This brief provides an overview of the scale of the investment that will
need to be undertaken when implementing smart metering
- A recommended approach for developing a business case and weighing the
costs and benefits of smart metering is explored
- The focus is on the utility that is migrating to smart metering
- Research comes from online surveys and interviews with vendors and
retailers
Report Highlights
Migrating to smart metering will involve replacing legacy infrastructure with
new investments. Key investment areas will be in hardware, communications and
networking and software.
Developing an effective business case for smart metering will require each
operational area to address the impact smart metering will have on it.
However, the benefits will likely be insufficient unless the utility also
includes the variety of demand and supply-side management benefits that smart
metering provides.
Business case modelling must sit within a wider smart metering roll out and
adoption strategy, which typically involved planning, procurement and
deployment phases. A need for executive sponsorship is also critical and the
issue of marketing must also be addressed.
Reasons to Purchase
- Understand the scale of systems overhaul that will be needed to implement
smart metering
- Gain insight into how to develop an effective business case for smart
metering
- Discover what other internal challenges utilities considering migrating to
smart metering will be faced with
Table of Contents
- DATAMONITOR VIEW
- ANALYSIS
- The move to smart metering will involve a substantial overhaul of
existing systems
- New meter technology and hardware will be a significant outlay
- Meter assets and meter devices
- Hardware at supplier-end of value chain
- Enhanced networking and communications will be necessary to deal with
two-way communication
- New software and integration will be crucial to meet the needs of
multiple stakeholders
- Developing an effective business case is fundamental to the adoption of
smart metering
- Developing a business case requires looking at different operational
areas impacted
- Cost-benefit analysis for individual operational areas is required
initially
- Operational benefits primarily accrue by reducing theft
- Overall AMI costs typically outweigh the net operational benefits
- Demand management benefits also need to be taken into consideration
- Demand response programs deliver the main benefits of demand
management
- Benefits from supplier load management also
- There are a variety of internal challenges that must also be addressed
- Developing a wider roll-out and adoption strategy is vital
- Planning
- Procurement
- Deployment
- Marketing is another key challenge that needs to be overcome to ensure
success is achieved
- Marketing will be crucial
- Full internal participation must be coupled with executive
sponsorship of the migration process
- Transparency and revisions are also essential
- APPENDIX
- Definitions
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Figures
- Figure 1: Smart metering functions require an investment in metering
assets and devices
- Figure 2: Complexity in supplier business without data management
system
- Figure 3: Cost-benefit analysis of smart metering/AMI on individual
operational area
- Figure 4: Operational benefits of smart metering
- Figure 5: Weighing net operational benefits against overall smart
metering/AMI costs
- Figure 6: Benefit of demand response programs
- Figure 7: AMI Cost-Benefit Analysis for Southern California Edison
- Figure 8: Three phases of the wider roll-out and adoption strategy and
timelines
- Figure 9: Penetration of smart meter deployment over 7 year strategy