View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
January 17, 2007

Automated meter reading technology still requires regulatory intervention for success

In the search for technological solutions to reduce energy consumption, automated meter reading technology has been heralded as key to changing consumer's consumption patterns. However, while this technology has its benefits, a cast-iron investment case for it has yet to be made, and current investments are being driven by regulatory intervention, not pure business decisions.

By CBR Staff Writer

While analysts talk about automated meter reading (AMR) technology as a single technology, in reality the solution is comprised of a number of technological components that are all decided upon and configured. There are multiple options that exist for the actual meter that sits in consumer’s homes. Likewise, different communication options exist for getting the actual meter data from the home to the utility company and back again, and additional options exist for the hardware and software systems to process and integrate the data.

The most interesting battleground is in the area of communication systems, where, broadly speaking, three different solutions exist: powerline communication, where the data is transported over the existing residential electrical power lines; fixed line transportation, where the data is transported over fixed telephone lines and the most recent development, transportation of data using mobile networks.

This battle is currently being played out in the Swedish rollout by Vattenfall. In Sweden, Vattenfall is installing AMR in three different areas of the country and in each of these areas a different communication option is being utilized, with different combinations of powerline communication and mobile networks being employed.

European rollout

While the technology to support the introduction of AMR has been around for some time, large-scale European rollouts have not materialized in the way that some analysts would have expected. In the past, costs have been prohibitive for utility companies and the payback period for such investment was, at best, uncertain.

In the last three years we have seen two large-scale European rollouts of the technology take place, the largest being in Italy with the installation of 30 million new electricity meters by Enel. The Swedish rollout by Vattenfall is on a much smaller scale.

To date, the installation of new meters has actually been driven by government intervention and regulation. While Enel and Vattenfall try to argue that the implementation of AMR has been made on the back of pure business investment decisions, this transparency is not clear to the market. Sweden has been prompted into the adoption of AMR by the government-imposed necessity for monthly readings.

Content from our partners
How to turn the evidence hackers leave behind against them
Why food manufacturers must pursue greater visibility and agility
How to define an empowered chief data officer

Enel’s rollout received a E1.1 billion reimbursement from the government in 2005 to cover stranded costs. This covers the loss for Enel if it installs an automated meter in a customer’s home, only for that customer to switch supplier before Enel has gained a return on its investment.

In a future of liberalized energy markets across Europe, it becomes difficult to ascertain which player in the value chain will be prepared to swallow the huge investment needed for large-scale AMR rollouts without further regulatory or government intervention of one sort or another.

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU