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March 05, 2012

Smart Grid Reporting Systems Will Get 'Top Billing' in 2012

Four centuries ago, Shakespeare penned the question, “Can one desire too much of a good thing?” in his pastoral comedy, As You Like It. Then, as now, the answer is, emphatically, yes, and the examples include plastic surgery, food and the data we generate through credit card purchases, Google (News - Alert) searches, Facebook interactions, and smart meter usage.

Even as you read this article, at 30-minute or hourly intervals smart meters are collecting data representing the electricity and/or water consumption of millions of appliances and systems at customer residences and businesses worldwide. In order to put that information to good use, rather than just stashing it away in some data warehouse for future consideration, utilities are beginning to deploy complementary reporting, billing, and customer information systems.


Source (News - Alert): Demand Response & Smart Grid Coalition

According to a report from Innovation Observatory, an independent UK-based analyst house, attention in the utility industry will shift this year to facilitating ways of deriving value from all of the data generated by smart meters and using it to balance loads, avert problems, and provide customers with the knowledge they need to cut costs. The analyst company estimates that  the market for new installations of smart grid billing systems will be worth US$440 million in 2012, growing to US$1.2 billion in 2016. Of this, Information Observatory estimates that some 15 percent is available to new providers of billing systems, rather than existing utility market suppliers. Maintenance and upgrade revenues increase the size of the potential market.

Many energy retailers today still rely on charging and billing systems that were designed to handle simple flat-rate or volume-based tariffing and batch processing of usage data based on quarterly or monthly billing cycles. These systems were not expected to accommodate complex charging schemes based on hourly or half-hourly interval data produced by smart meters; nor to handle consumer microgeneration or future smart grid requirements, such as roaming accounts for plug-in hybrid electric vehicles (PHEVs).

To prepare for these envisaged smart grid service innovations, utility retailers will need modern billing, charging and customer care systems capable of processing large volumes of transactions in near real-time and of handling a wide variety of usage-, time- and event-based tariffs as well as enabling flexible new service creation, discounting and promotions.

In Innovation Observatory’s new report, “Smart Grid Billing Outlook 2012-2016,” author Danny Dicks, principal consultant, and director, said, “While smart meter deployments have been growing steadily over the last three to four years, utilities' IT system priorities have been focused on preparing for how to deal with large volumes of smart meter data. This year, we expect to see the emphasis change toward making use of that data.”

Dicks believes that smart grid billing challenges can be addressed in a variety of ways, and that each company will choose to do things differently. “Decisions on billing system change — for instance, whether to go for a ‘big bang’ or an ‘adjunct system’ approach — will be taken in the light of the company’s competitive market position, and its existing IT infrastructure,” he commented.

In the last couple of years, most smart grid investment has been in meters, and much billing-related investment has been in data-collection and meter data management (MDM); rather than in the charging, billing and customer care. MDMS companies like San Mateo, California-based eMeter have achieved success by offering systems that utilities understand and that are closely tied to the big capital expense item — the smart meter rollout.

Now, contracts for highly capable billing systems are starting to point the way toward increased opportunities for billing system vendors. For instance, according to Innovation Observatory, U.K.-based LogNet Systems’ contract with First Utility, also in the United Kingdom, suggests that new entrants into the electricity retail market, unencumbered by legacy IT infrastructure, can make billing system decisions based on choosing the best system for the new requirements of electricity supply retailing in the smart grid era. Cincinnati-based Convergys’ February 2012 framework deal with E.ON IT of Hanover, Germany, suggests that there is a place for new providers with capable systems.

The report outlines four types of suppliers that are competing for the smart grid billing system market:

  • Established enterprise IT system vendors with a very large footprint in the utility space;
  • MDMS vendors, which can offer rating and charging;
  • Billing system vendors with a telecoms background; and
  • New entrant vendors that have built billing systems for smart grids from the ground up.

The analysts recommend that utilities should install systems that will enable them not only to cope with the immediate challenges of rating and charging based on smart meter data and introducing simple time-of-use (TOU) tariffs but will provide them with a long-term strategic tool to realize operational efficiencies, create innovative services, and improve customer care. Utilities should invest in systems that have sufficient flexibility to adapt to their uncertain or unknown future needs, and meet new challenges without expensive customization.




Edited by Rich Steeves
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