4 November 2010 | Published by Ovum
Strong risk smart meters will not deliver on some promises
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.
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