Smart Metering Threatens Utilities With Real-Time Data Explosion
John Poulter, 01/04/2010, posted in "Analysis"
John Poulter is Senior Vice President, EMEA Sales, Informatica. John joined Informatica in September 2006 to spearhead the company's expansion in EMEA. John brings 11 years of senior sales and ...more info
John Poulter is Senior Vice President, EMEA Sales, Informatica. John joined Informatica in September 2006 to spearhead the company's expansion in EMEA. John brings 11 years of senior sales and sales management experience. Prior to joining Informatica, John was VP Sales - Northern EMEA at Symantec, where he directed sales in the UK, Ireland, Nordics and Baltics. ...less info
Smart meters are the next generation of electricity and gas meters for consumers. Intelligent home-based devices, they constantly communicate with the utility company to provide accurate, real-time meter readings.
This means consumers can better track their gas and electricity usage and take steps to potentially reduce energy consumption and bills. In turn, utility companies will benefit from increased efficiency as it will spell the end of sending staff out to manually take meter readings or charging through estimated bills.
However the real-time nature of smart metering risks swamping utilities with real-time data, causing their systems to grind to a halt and damaging customer service and business performance. While the amount of data in each reading is small, the sheer volume and frequency of readings add up to a data explosion for utility IT systems, many of which are already creaking at the seams.
To see how smart metering will revolutionise the utility sector, let’s start by looking at the drivers – and the challenges that need to be overcome.
Greening the utility sector
The biggest factor in the introduction of smart meters is climate change. The EU has set tough targets to reduce energy consumption by 2020. Smart meters enable consumers to see exactly how much energy they are using – and how switching a TV or lights off affects consumption and their bills.
The idea is that this will change consumer behaviour in a positive way. It will also allow utilities to cope with new electricity needs, such as the growth in electric vehicles and the Smart Grid, which will see householders generating their own power and selling the surplus back to utility companies.
The benefits for utilities are based around efficiency and improved customer service. Obviously removing the need for physically sending someone out to read the meter cuts costs dramatically, but that is just the start. Having real-time information will allow new products and services, such as time sensitive pricing, to be introduced.
This enables companies to differentiate themselves and makes it much easier to introduce innovative new services. Given that most customer service issues revolve around billing, having real-time information available from smart meters should reduce complaints and make the whole process transparent to the customer.
2020 – The UK deadline looms
In the UK, the government has announced plans to replace all 26 million electricity and 22 million gas meters with smart equivalents by 2020. The total installation bill of £7bn will be met by cost-savings to utility companies and more efficient use of electricity by consumers.
While 2020 seems like a long way off, there is much to be done to make smart metering a success. Simply installing 48 million smart meters will be incredibly time consuming and it’s important that utility companies make sure that their back office systems can cope with tsunami of real-time data that will be generated. The challenge for utility providers centres around how they will deal with complexity, scalability, making information available and turning it into valuable business data.
Meeting the challenge
Currently most utility companies have multiple systems dealing with different parts of the billing, distribution and customer service processes. These tend to operate as silos of information, not in real-time and use a mixture of legacy and more modern technologies. The advent of smart metering will add further components to the IT system. Most importantly it will create a need to integrate data in real-time to create a Smart Grid that underpins the utility’s business.
The volume of data from smart meters threatens to swamp utility IT systems through its sheer quantity and the fact it is being transmitted in real-time. As the actual data from smart meters will be relatively simple, it will need to be modified and enriched to make it useful to businesses as well as having data quality tests performed on it. This will require major, real-time processing power that scales to match demand.
For the first time, smart metering provides a real-time, two way relationship with the customer. In order to succeed with smart metering utilities need to make this information flow across the business and beyond to partners, customers and regulators. So the service team has the latest information if a customer calls in, enabling them to answer their query faster. All of these different parts of the business will be using different systems, meaning that real-time integration is necessary to ensure a single version of the truth across an organisation.
Smart metering enables real-time business decision making by utility companies for the first time. Monitoring usage, identifying potential business opportunities, bad debt and analysing tactical performance will all be possible. Utilities need to take meter data, enrich it and use powerful analytics to explain it across the business in terms that staff will recognise and understand.
Transforming technology
Technology is at the heart of successful smart metering implementations. In order to succeed with this major change in how they do business, utilities need an overall architecture that embraces all of their technologies and enables the company to access, integrate, and trust their information assets in real-time.
A data integration architecture that combines data services with application integration is the most logical and strongest solution to meet this complexity. This will manage the entire flow of smart metering data into the utility, check and clean it, integrate with metadata, turn into useful business information and share it across the organisation and beyond – quickly and seamlessly. Implemented correctly and combining real-time data integration, smart meter data and sophisticated analytics will underpin better business performance across the utility sector and turns organisations into smart businesses.
Smart metering is the biggest change in the utility sector in a generation. The benefits for consumers, energy companies and the environment are potentially huge. However there are major challenges that need to be overcome if all of these benefits are to be realised – it is time for utilities to start work on technology now if they are to hit the 2020 deadline.
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