Individual energy use is under the spotlight. While plans to implement domestic smart metering – to cut energy use and carbon emissions – will vary from country to country, we can expect most developed countries to make steps towards this standard within the next ten years.
Already, the UK government plans to fit every home with smart meters by the end of 2020. That’s 26 million electricity meters and 22 million gas meters at a cost of around £7bn. Utility providers must install the necessary infrastructure to support all these changes.
A similar revolution happened in the telecoms sector when static quarterly billing gave way to a constantly expanding maze of customer choice and churn.
Few now tolerate a one-size-fits-all tariff from mobile network providers. We believe they want a varied contract according to their call, text and browser use.
Some want pay-as-you-go tariffs, while others prefer state-of-the-art handsets, and networks that can’t accommodate them will soon find themselves abandoned in favour of competitors who can.
In the same way, smart metering and legislative changes will force utilities – and those technology providers that serve them – to become more flexible.
According to the European Smart Metering Industry Group (ESMIG), most smart metering plans will require a data transmission infrastructure and an IT environment suited to ensuing data volumes – allowing a two-way communication between utility and the meter.
Utility companies will have to reconcile all these new technologies with existing ones to adapt to smart metering.
As well as offering flexibility to their customers, they will also need to navigate a regulatory minefield. With household energy use being monitored every half hour, in contrast with just four times annually, there will be accompanying compliance issues to cope with an increased volume of data.
Most utilities have disparate and often disjointed back-end IT systems, so delivering a new smart infrastructure and complying with demanding time-scales will be a huge challenge.
Telecommunications providers may use Business Process Management (BPM) products to help manage this, and help them comply with regulations, such as Mobile Number Portability and EU regulations on roaming charges.
BPM can also speed the introduction of new products or packages to market, partly by supplying real-time insights into processes.
The advent of smart metering may be daunting for organisations unwilling to change. However, these changes could actually create important opportunities for customers of tech providers serving the utilities sector.
Utilities will be able to use their increased access to demographic information for marketing and to introduce targeted tariffs – improving both retention and attraction to their customers, and hopefully boosting profits.
Ultimately, every country will respond to smart metering differently. But whether they are quick or slow to introduce legislative change, utility companies will need to reconcile many new systems and technologies with myriad old and disjointed systems. The channel can help.
Jim Shaw is energy and utilities specialist at Software AG
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