Smart metering is a not a cure-all for the utilities industry’s woes and there is a strong risk it will not deliver on some of its promises, Ovum finds.
In a new report*, the independent technology analyst states that smart meter and smart grid investments help to address a number of issues utilities companies currently face. However it finds there is a possibility smart meters could increase some costs and investment in further new technologies is also needed
Stuart Ravens, Ovum principal analyst and author of the report, said: “The utilities industry is facing some tough challenges and pressure is coming from all sides: concern over CO2 emissions is high, billions need to be invested in infrastructure and resources are becoming scarce. In addition, the rising cost of fuel forces utilities to drive down operating costs, their workforce is aging rapidly and they are experiencing an increase in payment defaults due to the economic downturn.
“Smart grid and meter investments will go a long way to address these problems, but to extract the full value of smart energy, utilities will require further new technologies such as analytics, billing and CRM systems.
“Furthermore, customers may struggle to understand the benefit from smart meters and may be confused by the additional complexity smart meters bring. There is a very strong risk that this increase in complexity will cause an increase in customer service costs.”
Smart grids help to reduce the environmental impact of traditional electricity production by supporting increased volumes of renewable energy and energy storage, with which aging infrastructure was not designed to cope. Meanwhile smart meters counter the issue of resource scarcity by influencing customer behaviour through demand-response programmes, which take control of appliances and turn them off when demand peaks. They also help to improve customers’ understanding of their energy usage, how it affects their bill and the environment.
Ravens added: “While these benefits are significant, they should not be overestimated and seen as the answer to all the problems the industry is facing. While they could make an impact, the reality is that there is also a possibility they will not deliver what utilities are expecting.”