Legislation and the evolving grid
push utilities towards an increasingly
data-heavy environment
From legislation
to grid evolution –
What’s next for AMI?
T
he electricity meter market con-
tinues to accelerate its shift from
basic to communicating meters
as utilities head towards a data-
driven future. Nearly two-thirds of the 1.
billion meters shipping between 2018 and
2025 will be communicating, boosted by
several large smart meter rollouts within
EMEA and Asia Pacifi c regions.
A short-term peak will occur in 2020
before the market rebounds again through
2025, as a result of the various rollout cycles
that aff ect the overall forecast (particularly
where ahead of schedule, such as Japan and
South Korea). In contrast, the North Ameri-
can market maintains a steady growth with
no major rollouts expected in the next few
years, whilst Latin America continues to
show potential for growth.
LEGISLATION STILL KEY DRIVER
The main driver for this current shift
towards communication remains the same –
legislation and national mandates. Long-run-
ning, legislation-driven rollout programmes
in the European Union and China continue
to drive much of the volume; Europe, Middle
East and Africa (EMEA) and China account
for nearly 57% of the total market shipments
during the forecast period.
For countries that provided a positive cost
benefi t analysis, the EU’s Third Package had
a target of 80% smart metering coverage by
- Meanwhile, China has several initia-
tives helping drive smart metering, including
the 13th Five-Year Plan, whereupon the State
Grid Corporation of China (SGCC) has cre-
ated a plan for smart grid investment to align
with this mandate.
Although these short term drivers remain
strong for AMI investment, organic demand
for smart metering from utilities is growing as
they look beyond meter-to-cash.
EVOLVING THE ELECTRIC GRID
The long-term drivers for metering willcome more from grid evolution and two par-
ticular regions are already approaching it dif-
ferently: Africa and Asia Pacifi c.
EMEA is often classed as a mature market
overall, but the true picture is more detailed;
Europe is the established market, Middle
East is the evolving market, and Africa is
the emerging market. Africa has one of the
lowest rates for access to electricity, but the
grid is changing as more buildings are becom-
ing connected.
This increases the need for metering,
although likely basic or AMR for the foreseeable
future due to the lower cost and lack of funding
typically available. However, Africa has very
low barriers to entry for AMI technology.
In most areas there is no previous infra-
structure needing adaptation, repairing
or replacing to allow for communicating
meters, whilst less regulations or standards
also provide lower barriers to technology
adoption too. Where funding can be secured
for specifi c projects, AMI therefore has huge
transformational potential for African utili-
ties, but pure electrifi cation eff orts more typ-
ically drive metering investment into lower
technology solutions.
The largest rollout plan in Asia Pacifi c is
India. They are advancing from basic (or
no) meter with a very large smart meter roll-
out; the government having announced
plans to have install 50 million communicat-
ing meters, which alone would drive a 10%
increase in the global market total.
However, delays are expected due to the
complexity of the tenders, with only one
major tender deploying any signifi cantvolume to date. In contrast, organic drivers
for metering across the rest of Asia Pacifi c are
more typically smart grid and communicat-
ing meter focused. Legislation and govern-
ment initiatives typically center more around
smart grids and smart cities, for example in
China, South Korea, Thailand and Vietnam.
There are over 1,000 smart cities planned
for deployment over the next decade, with
nearly half of these being in China. These par-
ticular grid evolutions are driven by energy
theft, growing shifts towards renewable
resources, and social changes, all alongside
the global increase in electricity demand.
In all cases, grid evolution will drive the
need for communicating meters rather than
basic, as utilities seek to understand and anal-
yse grid status through data networks.MORE THAN JUST A CONSUMPTION METER
The next decade will see the shift take place
from legislation-driven AMI and towards
organic utility need for AMI through grid evo-
lution. As a result, utilities will focus less on
implementing the lowest cost solution to
simply satisfy a mandate, and increasingly
focus on the total cost of ownership for sys-
tems (including communication network)
and loading more applications into the solu-
tion (such as outage management).
This approach will help drive the next level
of demand for communicating electricity
meters, pushing volumes from the current
magnitude of 100 million per year, up to the
order of 1 billion installations by 2025, as util-
ities look to make the communicating meter
even smarter.WORLD MARKET FOR ELECTRICITY METERS BY TYPEUnit shipments (millions)Basic meters2018 2019 2020 2021 2022 2023 2024 2025250200150100500Communicating meters
Source: IHS Markit © 2019 IHS Markithttp://www.utilities-me.com August 2019 / Utilities Middle East 13
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