Green energy transition using Advanced Metering Systems
In the past few years, many regional government utility companies have been investing in Advanced Metering Infrastructure (AMI) Systems. AMI is an Internet of Things (IoT) solution, based on an integrated system of equipment, communications, and information management systems to remotely collect customer electricity usage data in real time.
The traditional primary function of metering is to accurately measure consumers’ energy consumption so that they can collect revenues from electricity bills.
With AMI, the metering process has been digitalized and utilities, through remote access to the meter, can obtain data in real-time about energy consumption, at any time, about not only energy consumption as in the traditional meters, but also power quality data, events for abnormal events, and others.
This provides additional benefits to utilities such as reduced O&M costs, improved customer satisfaction, reduction of losses, and more.
However, there are also important challenges related to AMI. Utilities need to be ready to transform their organization and the existing processes and this requires the development of a new set of skills.
In this context, Economy Middle East spoke with Pierluigi Vicini, Managing Director at CESI Middle East, a company with 25 years of experience in smart metering systems supporting utilities globally in their green power transition, including the Gulf region.
How is the CESI Group helping UAE and Saudi with their green energy transition?
Our activities focus on defining national strategies for developing renewable energies, understanding the technical, economic and environmental impact of renewable projects in the power grid, planning and implementing smart grid projects, planning and operating cross-border interconnections, and developing the Gulf regional market. All activities aim to support new ways of looking at the power system to enhance efficiency and the environmental footprint of electricity supply.
Have the UAE’s DEWA or Saudi’s Water and Electricity regulatory authority been approached about smart metering AMI systems?
Both the UAE and Saudi have been massively investing in AMI systems. Last year, Saeed Mohammed Al Tayer, MD & CEO of DEWA, announced the company has installed more than 2 million electricity and water smart meters in Dubai. Saudi Electricity Company (SEC) has announced the Smart Metering Project which envisaged the installation of around 10 million smart meters.
These projects demonstrate the efforts of utility companies in the Gulf to develop a state-of-the-art digital infrastructure of which smart meters are a key component. In addition, such projects can boost the local industry as in Saudi Arabia, 40% of the smart meters installed were produced inside the Kingdom.
What are the benefits/savings of this IoT solution for governments, private sector companies, and end users?
The first benefit is the improved meter-to-cash process with respect to traditional meters. However, the real power is in the accurate real-time data that can be collected from the field, the possibility of controlling these assets remotely, and the ability to empower the consumer in order to be aware of their own consumption.
As benefits, we can reduce O&M costs, improve customer satisfaction, reduce losses; save electricity, improve network planning, implement smart grid initiatives and demand response programs, and integrate with renewables. Even more remarkable, considering the continuous improvements in data analytics and artificial intelligence, the future opportunities from AMI will steadily increase.
Moving to the quantification of the benefits, a study by the European Commission from December 2019 on the deployment of smart meters in the EU, found that on average, smart meters provide savings of €230 (approx. AED 900) for gas and €270 (approx. AED 1,060) for electricity per metering point, as well as an average energy saving of at least 2% and a high of 10%. The average cost of installing a smart meter in the EU is between €180 (approx. AED 700) and €200 (approx. AED 785). The economic feasibility is, therefore, evident.
As a further example, a cost-benefit analysis (CBA) carried out in 2019 in the UK, showed that the project will deliver significant benefits for households and small businesses in Britain, with a total Net Present Value (NPV) of £6bn over the next few years.
CESI has also carried out sever CBAs on smart metering projects in the Gulf. For example, CESI in one of his studies for WERA, the Regulator of KSA, estimated an NPV of the order of billions of SAR over a period of 15 years associated with the installation of smart meters in the Kingdom.
What are the environmental benefits of AMIs toward green energy transition?
According to World Bank data, Gulf countries have the highest carbon emissions per capita in the world.
Smart meters can play an important role in the digitization of the traditional grid and can facilitate the green transition. Indeed, smart meters are key facilitators for the introduction of renewable energies and improving efficiency, with significant environmental benefits driven by the reduction of electricity generation from traditional fossil fuel-based power plants.
How high is the obstacle of technically training staff and transforming the capabilities of utilities in terms of time and cost, when going with AMI systems?
Smart meters, in contrast to traditional meters, require a set of skills that are traditionally scarce in electrical utilities, including IT and telecommunication. Staff training is crucial but it is essential to understand that smart metering projects should be seen in the view of the overall innovation and digitization of companies, requiring support from upper management and a proper strategy for change.
Are large companies/factories adopting smart metering for their own power usage, globally or regionally?
A better understanding of consumption, thanks to smart meters, allows for the optimization of energy supply options and reduced costs. For these reasons, large companies and factories have been getting more and more interested in smart metering solutions. It should be highlighted, however, that the profitability of each implementation should be carefully analyzed.
For example, the potential cost reductions are related to the electricity tariffs paid by customers. If tariffs are cost-reflective, the attractiveness of investing in smart meters is much higher than with the presence of significant subsidies. An interesting example is related to Oman, where the introduction of cost-reflective tariffs for high-value customers successfully led to a reduction of electricity consumption during peak times and pushed companies to invest in smart meters and alternative supply options.