Internet of Things

How the IoT and smart meters will transform the energy sector

28 September 2017

How the IoT and smart meters will transform the energy sector

Everyone knows we need to get serious about energy saving. But before we can start cutting our gas and electricity consumption, we need to know how and how much we are consuming. That is the job of smart meters. These devices are being rolled out all over France, and began with the Linky electricity meter in 2015. There are currently found in around 4 million households, with 35 million more set to be equipped by 2021. On top of that, 11 million Gazpar meters are due to be installed by 2022. smart meters

The arrival of remote displays

Smart meters offer a real advantage to suppliers, who are consequently able to monitor closely household consumption, and thus better optimise production with more precise data. Moreover, they will enable users to track their consumption: useful when trying to stick to a budget and save energy. The goal is to foster a culture whereby measuring consumption becomes the norm for French citizens.

As it stands, households actually see very little benefit in installing smart meters. But all this could change very soon with the distribution of remote displays, and the key that will allow them to communicate locally with the meters. These IoT devices will allow customers to track their consumption in real time, with information displayed in euros and megawatt hours. At first, energy providers are obligated to offer these displays to households suffering from fuel poverty who receive fuel vouchers. But it is more than likely that the law will eventually be extended to all French households. And given that those with high purchasing power tend to spend more on luxury appliances, it is even more crucial to educate them on how and why to reduce consumption.

Difficulties in practice

It could be extremely troublesome for energy suppliers if they were to install these remote displays in all French households. Firstly, from a technical standpoint, they require a local loop — this means that the meters no longer transmit data only to the utility company’s IT system, which then transfers them to the supplier, but also locally to the display. Studies on how to put this non-centralised system in place are currently under way. A Linky Radio Transmitter (LRT) for Linky electricity meters has been in development since 2014, but does not yet come included with the device.

A whole new operation of appointments would thus be necessary to fit these LRTs in households already equipped with meters. This could prove very costly for the installer that the state nominates, potentially suppliers. And in addition to these installation costs is the cost of manufacturing and maintaining the equipment, as well as managing the project. By far, no mean feat. Yet, they must still prepare for the eventuality. Especially given the government’s future plans to promote self-consumption; since if we are to switch to self-consumption systems, we need data on how much we are consuming, and also producing. The French Environment and Energy Management Agency (Ademe) recommends “incorporating the development of smart meters into a global policy that should help develop a genuine energy-conscient culture in households to raise awareness of energy consumption and ways to reduce it”.

Smart meters in the home automation ecosystem

If suppliers take advantage of remote displays being introduced to remodel their services, it could incidentally present an opportunity rather than an inconvenience.

Rather than simply informing customers of their overall energy consumption, energy providers could develop a platform that gathers energy consumption for each household appliance. Customers would thus benefit from a global overview of how they use energy, allowing them to adjust their consumption accordingly. The platform could even use the data for each household appliance to calculate the average energy consumption for each type of appliance, and thus create an energy profile. It would also be possible for suppliers to take on an consumer advice role by providing customers with a energy consumption rating for each appliance. Such a rating would eventually replace or supplement current energy-efficiency labels, which are self-evaluated and range from A+++ to G. The platform could bring together a community of users to discuss issues such as their energy consumption and the efficiency of appliances.

The fact that ZigBee and KNX must be used means that turning this simple display into a complete home automation platform is not beyond the realms of possibility. It could be used not only to track one’s energy consumption, but also to turn them devices on/off and operate them remotely using a smartphone or voice commands. Suppliers would thus be in a strong position to partner with manufacturers of smart home devices, whose products would be managed directly via the platform. Suppliers could even offer all-inclusive packages comprising consumption, equipment, maintenance, remote surveillance and much more.

New applications in the sector

There are many other potential applications, notably by exploiting the remote display’s local loop and blockchain technology. One such example is through the tokenization of energy, which will facilitate self-consumption and the peer-to-peer trading of energy. Tokenization is the process by which a real-world asset is substituted for a unit (or token), which can then be sold or exchanged. In the case of electricity, rather than generating energy and putting any unused production back into the national grid, it could be sold directly to one’s neighbour. Smart meters allow both parties to know precisely how much energy they generate or produce, and thus calculate the exact amount needed. The blockchain then provides a secure way to complete the transaction.

These advances move towards cutting out the middleman in energy supply. Further impetus for energy providers to take action and diversify their operations to offer added value across other business segments. Installing remote displays should be seen as an opportunity to differentiate oneself from the competition. What is more, new jobs could be created, perhaps in community management or in reevaluating the quality of manufactured products — a godsend for French industry.

Key to leading this revolution is developing a scalable platform from the start. The idea is that by being prepared as far in advance as possible, we prevent the need for expensive field operations further down the line, favouring rather remote/non-physical adjustments. All that remains is to assess to what extent the platform should be scaleable, striking the right balance between risk and predicted return on investment. And surrounding oneself with the right partners. Finally, the hallowed state funding should be used by suppliers to conduct tests, so that they are ready to roll out an innovative solution on a large scale when remote displays become more widespread.

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