Europe's investment in smart meters has begun to open up the market for analytics that benefit both utilities and customers.
Two new reports from GTM Research demonstrate the substantial investment in both advanced metering infrastructure (AMI) and specific customer analytics segments -- the first report analyzes the progress of AMI deployment in Europe, while the second is a comprehensive assessment of analytics use cases enabled by or interacting with AMI.
The Third Energy Package mandated EU member states to perform a cost-benefit analysis to evaluate the economic viability of deploying smart meters. Two-thirds of the member states found there was a net positive result, while seven members found negative or inconclusive results.
“The mandate spurred AMI deployment in the EU, but all member states are deploying some AMI. Even without an overall positive cost-benefit outcome, utilities found pockets of customers where there is a positive business case for AMI,” said Paulina Tarrant, research associate at GTM Research and lead author of “Racing to 2020: European Policy, Deployment and Market Share Primer.”
Annual AMI contracting peaked in 2013 -- two years after the mandate -- with 29 million contracted that year. Today, 100 million meters have been contracted overall. As member states reach their respective targets, the AMI market will cool in Europe and spending on analytics and applications will continue to ramp up, Tarrant noted.
Between 2017 and 2021, more than $30 billion will be spent on utility back-office and revenue-assurance analytics in the EU, according to GTM Research’s Grid Edge Customer Utility Analytics Ecosystems: Competitive Analysis, Forecasts and Case Studies.
FIGURE: Overall Customer Analytics (2017 Annual and 2017-2021 Cumulative Spend)
The report examines the broad landscape of customer analytics showing how AMI interacts with the larger IT/OT environment of a utility.
“The benefits of AMI expand beyond revenue assurance -- in fact, AMI represents the backbone of many customer utility analytics and grid edge solutions,” said Timotej Gavrilovic, author of the Grid Edge Customer Utility Ecosystems report.
Integration is key, according to the report.
“Technology providers are integrating data sets, solutions and systems and partnering with others to provide a one-stop shop serving broad utility needs, increasing efficiencies and reducing costs,” Gavrilovic said. “Cloud-based deployments and platform-as-a-service offerings are becoming commonplace, creating an opportunity for utilities to balance the cost versus performance tradeoff to optimize their analytics systems and applications.”
FIGURE: Maturity/Journey Matrix -- Illustrative Mapping of Analytics Submarkets
A diverse array of customer analytics applications is a critical foundation for demonstrating the positive cost-benefit of AMI.
“Advanced analytics and applications are key to ensuring that AMI investments provide a positive return after smart meters are initiated,” said Tarrant. “Improved billing and revenue assurance was not enough everywhere to show customer benefit -- these analytics packages will leverage the distributed network infrastructure and subsequent increased data access, uniting the electricity markets of the EU.”
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Learn more about the AMI forecast for Europe here.
Learn more about the Grid Edge Customer Utility Analytics report here.