In a report titled, ‘Electricity Smart Meters: Government policies and sustainability initiatives will drive 2.1 billion connections in 2033’ Transforma Insights estimates that the total number of Electricity Smart Meter devices will grow to reach 2.1 billion in 2033. This article provides an overview of electricity smart meters, delving into their main drivers, challenges, and the technologies used to connect them.
Types of electricity smart meters
Electricity Smart Meters are devices that record the consumption and, where relevant, generation of electricity at a location and transmit this data to suppliers. In some instances, these devices also transmit usage data to users in order to encourage more energy-efficient behaviours.
Electricity smart meters fall under two categories: Automated Meter Reading (AMR) and Advance Metering Infrastructure (AMI). AMR technology automatically connects consumption, diagnostic, and status data from the metering devices and transmits it to a centralised database for billing, troubleshooting, and analysis, and AMI additionally supports two-way communication back to the meter from the utility.
Drivers for adopting electricity smart metering
While the development of electricity smart metering began in the 1970s, large-scale adoption of smart meters only started to snowball in the early 2000s, when Italy began a country-wide rollout. The main reasons behind their now extensive adoption around the world include:
- Government mandates: Governments have typically been the principal driver of growth in the global market for smart meters through mandated use and incentives. For instance, Taiwan started a smart meter rollout in 2018, and its state-owned electricity provider, Taiwan Power Company intends to install more than 6 million smart meters by 2030 out of a total of more than 14 million.
- Cost savings: Unlike traditional meters, smart meters do not require manual reading, significantly reducing the costs to support billing. Moreover, these meters are more advanced in terms of data storage and reporting outage detection and often do not need manual intervention in situations where end-users need to be disconnected from the electricity grid.
- Power theft: Power theft is a prominent driving force for the adoption of smart meters, especially in South Africa and Asian countries such as India, Pakistan, Bangladesh, Malaysia, and the Philippines. For instance, it has been estimated that power theft reduced India’s GDP by 1.5 % in 2019. Smart meters can provide real-time consumption information, allowing utility providers to better detect theft and where necessary to control and cut off electricity supplies.
- User feedback: In some cases, smart meters provide customers with detailed feedback on electricity usage, encouraging them to adjust their habits to lower their electricity bills. In turn, this enables electricity providers to use dynamic pricing to influence smart meter-equipped customers’ behaviour to enhance grid reliability, reduce blackouts and system-wide electricity failures, and curb greenhouse gases and reduce reliance on fossil fuels.
- Load balancing and renewables: Consumers can connect EVs, HVAC systems, and smart appliances to a smart metering system so that they can respond to real time pricing data and to the availability of renewably generated power. Using renewable energy sources for electricity has also increased the need for load balancing across power grids as the supply of renewable power is often variable. Current geopolitical factors are also likely to accelerate the adoption of renewable power sources and make load balancing even more critical.
Challenges for the adoption of electricity smart metering
The adoption of smart meters has undeniably gained momentum in the past few years and many governments from around the world have replaced and updated various generations of smart electricity meters, yet the adoption of electricity smart meters still faces significant challenges, some of which are discussed below.
- Deployment or replacement of electricity smart meters is expensive: The deployment of electricity smart meters is not easy, with expense involved at each stage starting from planning to the final phase of installation and ongoing maintenance and support. For instance, even locally manufactured smart meters in India cost INR6,000-7,000 (USD72-83) per unit. Utility companies may not be able to bear such costs, resulting in higher taxes or energy rates which may prevent their deployment, particularly in less wealthy countries. In addition, some early deployments of electricity smart meters have faced significant issues resulting in costly replacements of first-generation devices. For instance, the first generation of smart meters in the UK had to be either replaced or upgraded by second-generation meters, since the first-generation ones did not always allow consumers to change energy providers without losing the ability to send a meter reading automatically.
- Instances of incorrect and more accurate billing: There have been some instances of smart meters billing incorrectly, which can take some time to detect due to their independent operation. Additionally, in countries with particularly high losses due to theft and poor billing, there may be a backlash from consumers who do not wish to be charged accurately. For example, after deploying smart meters Energy Efficiency Services Limited (EESL) in India reported an average rise of nearly 25% in electricity billing compared to conventional meters.
- Opposition due user privacy concerns: Some consumers believe that smart meters hinder privacy with real-time feedback on energy use that can be used to analyse a home and its residents’ behaviour. For example, in the Netherlands, apprehensions about consumer privacy caused a notable postponement in the implementation of smart meters when the Dutch Senate turned down a proposition for obligatory smart meter deployment.
- Opposition by consumers due to suspected health reasons: Some consumers oppose smart meters owing to their concern about the potential health impact of introducing a producer of electromagnetic radiation into their homes. This is despite evidence to the contrary from multiple studies. For example, a study by Public Health England found that exposure to the radio waves produced by smart meters is likely to be much lower than that from other everyday devices such as mobile phones and Wi-Fi equipment and should not be a basis to decline any installation.
The main communication technologies used for electricity smart meters
Smart metering systems either use wireless communication options or fixed wired connections such as PLC (Power-line Carrier). A wide range of different wireless communication options have been used, such as Wi-Fi, RF mesh networks, LoRa, Wize, Zigbee, NB-IoT, traditional cellular communication technologies (2G/3G/4G), and Wi-SUN.
Technologies such as PLC and RF Mesh are currently the most common primary communication technologies with a share of 60% of devices shipped in 2023. The vast majority of the remaining new devices use 5G mMTC (including NB-IoT and LTE-M) and non-mMTC LPWA (including, for example, LoRaWAN) as their primary means of communication. In 2023, 5G mMTC had a share of 17%, non-mMTC LPWA had a share of 10%, 4G had a share of 9%, and Short Range had 2%. In 2033, 5G mMTC (share of 32%), LPWA non-mMTC (30%) and PLC and RF-Mesh (30%) will be the pre-eminent means of connectivity for new devices.
In future, many smart meters will also be equipped with Short Range communication capabilities in order to communicate with HAN (home area network) devices or with IHDs (in-home displays), which typically record energy consumption, either in real-time or through the logging of historic usage.
Supporting grid transformation and sustainability
In conclusion, the rapid proliferation of electricity smart meters represents a significant shift from traditional analogue billing methods to precise digital monitoring. With our forecasts projecting a substantial increase in global smart meter installations, it is evident that these devices are at the forefront of the transformation of energy grids and the overall energy landscape, thereby promoting the adoption of sustainability sourced power. However, the adoption of electricity smart metering is not without its challenges which need to be addressed to ensure rollouts continue apace.
Nikita Singh
Joydeep Bhattacharyya