By Mike Ballard, Senior Director Utilities Strategy, Oracle
Around the world utility companies are being buffeted by strong winds of change. Shifting customer demands, fresh competition and new government policies and regulation mean business-as-usual strategies no longer work.
Sitting at the centre of these changes is the smart meter. Being rolled out in increasing numbers, these devices have the capacity to alter both the way in which utilities operate and the nature of their relationships with customers. According to industry estimates, more than 600 million smart meters have already been installed around the world.
In addition to these global trends, in Australia, moves are being made to deregulate metering, potentially allowing the entry of a range of new players in the market. This is likely to hasten future smart meter rollouts.
A changing approach to metering
Where traditional meters delivered little more than a record of power consumed by a home or business, smart meters are able to provide a whole lot more. Consumption can be monitored on a real-time basis and differential pricing used for different times of day.
When this is combined with the increasing adoption of renewable generation, utilities now have the technologies to monitor and control generation and distribution at a much more granular level. Demand can be accurately assessed and capacities scaled up and down much more quickly.
Smart meters can also provide data on other connected devices. There might be solar cells generating power on the roof and a storage battery in the basement. Each such device produces data that can be collected and used by the meter provider, the retailer and of course the customer.
However, a challenge arises because many utilities are still working with first generation Meter Data Management (MDM) systems not designed to cope with newgeneration smart meters. Designed only to collect basic consumption data and provide it to a centralised billing system, they simply can’t cope with the demands of new smart meters and the demands utilities have of their MDM systems.
Utilities need to understand that, when they start to roll out smart meters across their networks, both the volume and types of data generated will increase. This is due to the fact that a typical smart meter creates a variety of different data points and can do it as frequently as every 15 seconds.
Data collected includes everything from consumption over time to the quality of received power. Using the combination of consumption and power quality, smart meters can inform a utility company of any potential problems in their distribution network by analysing voltage being received and any fluctuations that occur. This capability becomes more important as variable generation equipment is increasingly installed on the low voltage network.
Note that data volumes from smart meters do not increase in a linear fashion but grow exponentially. Traditional MDM systems were never designed to cope with these kinds of volumes.
Utilities need to find a way to costeffectively deal with this data, which arrives in large quantities and in a variety of formats. They need to be able to efficiently collect it, cleanse it and analyse it to extract real business value. There needs to be business rules in place that can deal with everything from billing based on timeofday consumption, net metering as well as all of the distribution use cases too.
Utility companies also need to be able to manage the smart meters themselves. Essentially small computers, smart meters need to have firmware and security updates which must be carried out in a regular fashion. These kinds of requirements were never considered when using the old meters or first generation MDM systems.
The bottom line is that utility companies need a metering platform that can scale and be flexible enough to cope with the changes that are happening across the sector. Without this, they will be unable to continue to operate effectively and provide the levels of service that customers are coming to expect.
However, making significant investments in back-end IT infrastructure that is capable of dealing with these high data volumes and extracting business value is not always financially viable for utilities. This is especially the case when utilities have already piled significant capital into their smart meter programs. However, there is another alternative.
Cloud-based platforms offer the ability to take advantage of the infrastructure needed to handle high volumes of data without the requirement for sizeable up-front expense. All data received from smart meters can be stored, backed up, and analysed without the need for any direct investment in physical infrastructure.
A cloudbased infrastructure can also be readily scaled. If a utility rolls out another 100,000 smart meters, processing capacity is immediately available as storage and processing resources are consumed as a service. The utility only pays for what is used.
However, despite the significant benefits offered by a cloud platform, some utilities are still reluctant to make the move. They are hesitant to make the change from housing their smart meter data and processing to inhouse servers to an external cloud-based platform.
One reason cited for this reluctance is that they fear they will lose the ability to use the data in other systems. They believe that, once it leaves the traditional data centre, it will be difficult to recapture.
Reality is somewhat different. Some cloud providers are offering services that allow metering solutions to be portable from on-premise to cloud and back again if needed. They also recognise that an MDM systems in the cloud is only viable if they can ensure that the data is easily uploaded, processed and most importantly delivered back to the utility’s downstream business systems.
In this way, organisations can evolve their data architectures to extract and leverage value from their existing IT and ‘data assets’ as well as exploit the latest capabilities from market leading MDM systems investments.
A cloud-based system also offers benefits to utilities keen to ‘try before they buy’. They typically have the option of undertaking a pilot program, taking data collected from smart meters and performing analysis to determine its worth. In this scenario, no up-front capital investment is required as the utility can simply rent some capacity from the cloud provider.
If the pilot program is deemed a success, the cloudbased metering approach can be quickly scaled to cover the entire operation.
By using a cloud-based infrastructure to support their smart metering projects, utilities no longer need to be concerned about the cost and complexity of setting up traditional back-end systems to support these projects. They are free to focus on the data that is being generated and on finding ways to derive business benefit from it.
As the electricity market becomes more complex and competitive, those utility companies that flourish will be the ones that can use data collected by smart meters to have a better picture of their customers and their changing demand patterns. A cloud-based processing platform can help them achieve this aim.