SIEMENS

When asked about the electricity meters in the Swiss municipality of Arbon, Jürgen Knaak, head of the local power utility, Arbon Energie AG, says, "It’s time to get out of the dark!" What Knaak is referring to is the fact that for a very long time nearly all electricity customers and suppliers around the world have suffered from a huge lack of information. Consumers know nearly nothing about their electricity consumption habits, while suppliers know very little about the state of their grids at any given — including such basic information as whether loads in certain sections are dangerously high, or whether the supply voltage has dropped dramatically in particular areas. That’s because data from electricity meters generally doesn’t become available until months after power is actually consumed, and such information only shows the sum of the electricity used over a specific period of time.
Having such data made available in something closer to real time would conserve resources, as consumption could then be flexibly adjusted, prices for consumers lowered or raised in line with peak loads, and power generation capacity stepped down when less electricity is needed.
Meters capable of such real-time data delivery were not available to the average consumer until recently — but now, more and more power suppliers are installing smart meters that electronically measure electricity consumption. Alexander Schenk, head of the AMIS Business Segment at Siemens’ Power Distribution Division, explains. "Smart meters don’t just substitute a digital display for mechanical cogs; they also automatically forward consumption data to a control center and have a feedback channel." Among other things, this enables suppliers to send price signals to customers, who can then reduce consumption during peak times in order to save money. One smart meter now on the market is the AMIS model from Siemens, some 100,000 of which are scheduled to be installed in Upper Austria by early 2010 (see Pictures of the Future, Fall 2008, Stabilizing the Grid). Residents of Arbon, Switzerland, on the shores of Lake Constance will also soon be enjoying the benefits offered by the Siemens meter.
"The near-real-time transmission of data from households, special contract customers, and the power distribution structure gives us the kind of insight we need as to what’s going on in the grid," says Arbon Energie’s Knaak. "This allows us as a supplier to make more precise forecasts of peak load times, and thus plan more efficiently." Arbon residents will be among the first in Switzerland to know exactly how much electricity they’re using every month, instead of having to pay estimated fees, as was the case in the past, and then receiving a huge bill at the end of the year. So living in the dark about one’s own electricity consumption will soon no longer be an issue, at least not in Arbon.
The benefits that smart energy meters offer utility companies go far beyond improved grid load planning. For one thing, the manual reading of conventional meters is subject to errors that generate additional costs, such as the need for a second readings. These require disproportionate amounts of time and energy in comparison with standard reading trips. Smart meters, on the other hand, are read automatically. "On average, around 3 % of the readings of conventional meters are erroneous and need to be repeated," says Dr. Andreas Heine, head of Services at Power Distribution. "Smart meters reduce this error rate to nearly zero. So, if you’ve got an area with a million customers, you can save more than €1.6 million per year, which corresponds to 53 % of the previous cost for readings."

No More Flying Blind. Most smart meters are now being used in highly developed countries, with dozens of projects currently under way in the U.S. and Europe. Direct economic benefits are generated in such nations mainly through a decrease in blackouts and efficiency gains in service processes. By installing around 30 million smart meters with feedback channels, Italian energy supplier ENEL, for example, has been able to automatically carry out 210 million meter readings. The initial investment of €2.1 billion can be amortized relatively quickly through savings of around €500 million per year, while service costs per customer and year have been reduced from €80 to €50.
EnBW ODR, which supplies electricity to the region east of Stuttgart, Germany, is now replacing its conventional meters with Siemens AMIS units along with the complete meter data management system. 90 % of the company’s new meters communicate with a central server that processes the huge amounts of data, with most of this data transfer occurring via power line communication — in other words, the grid itself.
And in New Zealand, Siemens went a step further by establishing a joint venture with Vector, a local power supply company. The JV runs Vector’s IT infrastructure and handles its readings and data processing operations, which form the basis for customer invoices. "Smart metering is leading to the formation of new business models," says Philip Skipper, from Siemens Metering Services. "In this case, Siemens is serving as a service partner that does the work formerly carried out by the company’s metering department."
Siemens prepared itself well for such new types of cooperation models for smart metering systems by partnering with U.S.-based eMeter, one of the world’s leading providers of meter data processing services. Such partnerships require a high degree of flexibility, however, since the business logic behind smart metering projects differs greatly from region to region.

Time for Smart Meters. By 2030, global electricity production is expected to increase by 63 % over its 2008 level to approximately 33,000 TWh. Whereas today’s poorer countries are expected to expand their annual production by around 4 %, electricity production in the most developed regions will grow by only about 1.3 % per year. Completely new grid structures are now being set up throughout large parts of India and China, and many regions are now being supplied with electricity for the very first time. A total of 150,000 villages in India alone will be hooked up to the grid over the next few years. As smart metering technology will be used here from the start, integrating it into existing systems won’t be a problem.
More developed markets — like Brazil, for example, where the vast majority of households already have electricity — will have to modernize their systems to reduce electricity theft and increase supply reliability. Smart meters will thus also be installed in many areas in these markets. Finally, in many of the most developed countries, legislation enacted as part of electricity market deregulation is leading to the rapid introduction of smart meters. The European Union, for example, has an energy efficiency and services directive that stipulates that all conventional meters be replaced by smart meters by 2020. Indeed, all new buildings built today have to have such meters.
According to Knaak, smart meters represent just a small component of a much larger project: the smart grid. With this energy network, it will be easier to incorporate renewable sources of energy. In addition, electricity storage will one day play a major role here and with improved network load planning it will be possible to reduce the occurrence of the sort of major blackouts that have caused havoc in Europe and the U.S. over the last few years. "Without smart meters, there would never be a smart grid," says Knaak. "Together with Siemens, we, in our little town of Arbon, have laid part of the foundation for this flexible network of the future."