10 Things to Know About Smart Meters

Posted by Jenny Edwards  |  Date August 2, 2013

The Electric Power Research Institute estimated that a modernized grid could yield up to $2 trillion in benefits and reduce emissions by 58 percent. Smart meters are a key physical component in smart grid implementation, but the media’s focused more on the risks of radioactivity and hacking than their potential to refine demand response programs and improve our energy infrastructure. Read on if you’re curious how smart meters could affect electricity consumers and providers.

What makes smart meters intelligent?

Automated Meter Reading (AMR) streamlines data collection.

Basic analog electricity meters measure how much energy a building or device consumes. To access this data, providers must check them manually. The latest “smart” metering technologies record then transmit energy consumption data to a data collection point in short and regular intervals. These collection points are dispersed throughout the service territory. They send information and receive commands from electricity providers.

AMR and other communications capabilities are crucial components of Advanced Metering Infrastructure (AMI).

The Federal Energy Regulatory Commission (FERC) defines “advanced meters” as 

Meters that measure and record usage data at hourly intervals or more frequently, and provide usage data to both consumers and energy companies at least once daily...  Advanced meters include basic hourly interval meters, meters with one-way communication, and real-time meters with built-in two-way communication capable of recording and transmitting instantaneous data.

FERC’s Survey on Demand Response and Advanced Metering does not count meters with the capacity to send data unless the utility finishes programming the software and builds out the communication infrastructure to support them. 

How do smart meters benefit end-users and electric utilities?

Smart meter data improves customer experience and enables demand response.

Initiatives like Green Button increase a customer’s understanding of how she uses energy. On a larger scale, utilities can inform their customers by displaying an entire region’s status during a power outage. Some utilities, including San Diego Gas & Electric and Southern California Edison, offer rebates to customers who use their smart meters to reduce their peak load on critical days. 

Strategic analysis of “meter events” builds grid resiliency.

When a meter loses power, it sends out out a wireless message (its "last gasp") to the collector. This helps a utility identify priority restoration areas during power outages, especially if it is designated as a “bellwether meter” at sites such as hospitals that need reliable access to energy. Smart meters can also record power quality events such as voltage swells.

Utilities use meter data to increase return on investment.

Advanced meters and metering infrastructure are expensive upfront, but smart meters have the potential to collect and analyze data that describes the quality of the power being consumed to help improve energy infrastructure and delivery. For example, Oklahoma Gas & Electric recently installed 800,000 smart meters. They’re using segmentation analytics to better understand consumer response to price signals, identify target audiences for marketing campaigns, and refine rate structures. 

Improved meter data management (MDM) would yield further benefits. 

To make the most of AMI data, utilities must build data management and analysis expertise, something that is still in the works across the country. A recent survey by Oracle found that about half of utilities with smart meters in place felt they missed chances to send key information to their customers. 64 percent list improving data management and analysis in their top three priorities. Implementing MDM software is a good first step. Utilities could also consider looking at data at an enterprise level, rather than siloing data ownership across departments

How are utilities deploying smart meters?

Utilities choose metering technologies based on existing infrastructure, the ability of a site to meet the technical requirements, and economic impact.

There are two basic architectures, based on local area network (LAN): via radio frequency or power line carrier.

The radio frequency method uses a wireless radio to transmit data from the meter to a collection point, from which it’s sent to the utility for processing. This method includes both mesh (smart meters talk to each other, forming a LAN cloud to the connector) and point-to-point (smart meters talk directly to the collector) technologies. This method has little latency and large bandwidth, but can be challenging to implement in rural and less secure areas because there are multiple collection points. In comparison, in a more densely populated urban area, there is often a single collection point for most meters.

The power line carrier method transmits data across utility power lines. This method takes advantage of existing utility infrastructure and works effectively in challenging terrain, but offers limited bandwidth (i.e., it’s slower) and can be expensive in urban and suburban locations.

Market penetration will continue to increase.

Thanks to state and federal regulators and funding from the Smart Grid Investment Grant program, US smart meter market penetration approached 23 percent at the end of 2011, up from 9 percent in 2010. But only a few states have implemented smart meters at a large scale:



Local policies, state electricity prices, and the condition of utility assets all affect smart meter market penetration. Researchers predict that market growth will normalize, but we can still expect penetration to increase to 55 percent by 2020.
 

What are the challenges to implementation?

Interoperability will play a key role in developing AMI.

Smart meter operation suites and other communication softwares vary widely, which creates complications when utilities try to integrate communication networks. The National Institute of Standards and Technology’s Smart Grid Interoperability Panel developed a “Framework and Roadmap for Smart Grid Interoperability Standards,” which includes Priority Action Plans to help ensure smart grid devices (including smart meters) communicate smoothly, regardless of their manufacturer. Elster, Landis + Gyr, and Secure (major smart meter manufacturers) are working to develop interchangeable and interoperable devices and command sets in line with ZigBee’s Smart Energy Profile.

Consumer concerns about about data privacy, security, and health impact AMI effectiveness. 

Smart meters are more accurate and less expensive than mechanical meters, and present much smaller radio frequency concerns than other household items. But because of media attention, a number of utilities offer “opt-out” programs for individuals who don’t want a smart meter. While few customers choose to opt-out, mixing analog and digital systems in a service territory makes it more difficult to automate billing or detect power outages. Many states are conducting feasibility studies and suggest charging for the opt-out option.

Related posts:

Power, Energy, and Policy: Looking Ahead

in other words: Green Button