Insight

IoT trends in the utilities & smart metering industry – what you should know

Smart meters offer utilities a gateway into IoT, which leads to smarter grids and better customer relations. Explore the value chain IoT creates for the utilities & smart metering industry.

Automatic meter reading is just the beginning

Today, the most common use case for utilities IoT is automatic meter reading (AMR) via smart meters. Metering system operators can collect data automatically, without visiting the physical meter in the field.

The rapid development of smart meters has been sparked by legal regulation and commercial requirements. Almost one third of EU electricity customers had a smart meter at the end of 2016, a number that is set to double over the next five years.

Regulation compliance and operational efficiency

Industry regulations increasingly require accurate meter data to be collected at regular intervals, and made available to all energy suppliers for billing purposes. By automating this process, metering system operators can collect data of a higher quality and do so more rapidly, using less manpower than manual reading.

AMR is a cost efficient way to collect accurate readings based on actual consumption from millions of meters. Smart meters also give utilities the ability to operate and upgrade every node remotely.

IoT is redefining the power grid

With increasingly rapid mobile connectivity speeds, smart meters provide near real-time information on energy consumption and transmission. This data allows for more efficient, demand-based electricity generation and distribution. IoT makes it possible to integrate a larger ecosystem of power sources, with electricity, hydroelectric, oil and natural gas integrated into unified distribution networks.

Smart meters are also facilitating the growth of the local, micro-production of energy such as solar panels and wind turbines. This creates potentially new revenue streams, as well as further efficiency of production and distribution. It also creates interaction with other market players in – or outside the “traditional” ecosystem.

Stronger customer relationships and new revenue streams

Just as IoT can enable demand-based energy production, utilities can further influence demand by offering consumers incentives to use energy at particular times. For the end-customer, transparent pricing lead to lower bills, while the grid operator can reduce the cost of building greater capacity.

Smart meters provide utilities a direct channel to offer the consumer value-adding services, such as smart home applications that automate energy usage. Realizing the full potential of IoT will allow utility operators deeper consumer relationships and new revenue streams over time.

IoT trends in the utilities industry

Short term trends

IoT leads to cost saving and regulatory compliance.

An emerging need to increase meter reading frequency to shorter intervals, which will require a more advanced IoT solution, utilizing high-speed LTE and 5G mobile connectivity.
Low margins in the utilities industry creates a barrier for investment in IoT projects.
IoT development is likely to happen more quickly in markets where automated meter reading legislation is already in place.
Cost savings remain the main driver for adoption, but the full potential of IoT remains untapped.
Next-level investments in Utilities IoT will lead to more efficient grid operations with solutions for alarm functions, maintenance, and upgrades.

Long term trends

Balancing demand and improving services.

The commercial breakthrough of electric vehicles will have a major impact on demand
The whole industry will become more connected, driven by legislation, customer demand, and lower TCO (Total Cost of Ownership).
Near real-time data will lead to intelligent energy distribution planning.
IoT facilitates the growth of the localized green energy production.
Two-way communication with end-users make differentiated pricing possible.
The direct communication link from utility to household enables new revenue streams such as smart home automation.

Are you ready for IoT?

Is your company ready for IoT and digital transformation?

Our IoT Readiness Test will help you determine where your organisation is today and what steps you need to take to develop and deploy successful IoT solutions.