Smart Metering is about replacing one of the ultimate bastions of outmoded electromechanic technology by a new generation of smart electric meters. What seems to be an evolutionary development accompanying the global trend from an analog into a highly digital world could have a rather revolutionary impact on the iron patterns of today’s power industry. Whereas most traditional branches of the economy have already gone through their initial transformation into an e-Business, the power industry has not, and right now, energy economics are right at their turning point.
Smart Metering is one of the crucial drivers for this development, although the new generation of smart electric meters is nothing of a new invention. It is a mere application of state-of-the-art information and communication technology (ICT) on the existing metering infrastructure. This technological upgrade will influence every link in the energy supply chain as the commercialization of electric energy heavily depends on its metering. With the increasing availability of real-time data provided by smart meters and the integration of the underlying power grid into a Smart Grid, the traditional business models of our present power industry (e.g. full supply contracts with annual billing) run the severe risk of being replaced by revolutionary new methods of providing a value proposition to the customer.
For example, every household equipped with a smart meter could appear as an active and self-determined player on the electricity market, as a consumer as well as a decentralized producer from renewables. Once every power flow can be tracked and measured in real time, producers and consumers of relatively small quantities of energy could enter a direct market relation for the very first time. Neighbors could collaboratively use the production of a small-scale photovoltaic power plant interconnected to the grid, or you could put your pre-estimated “negawatts” (under-consumption) on a liquid market platform when going on holiday. Automation will help to reduce the end-user complexity of these new technological options.
The business environment of Smart Metering is currently emerging and the rules of the game have not yet been determined up to now. While the established power companies are likely to hold themselves captive with increasing the efficiency of their processes through the plain automation of meter reading, new players could appear, pushing forward the energy industry’s transformation into a dynamically evolving sector of the digital economy, replacing traditional structures. Historically, the convergence of developments in both the energy sector and the communications sector has resulted in two revolutions of the industry. Now, the third industrial revolution is on the way, with Smart Metering being an inconspicuous but essential driver of the new game in energy economics.
To be continued soon …