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By Natasha Lomas, 12 July 2007 14:02

NEWS

Smart metering is set for massive growth as utilities in Europe and North America overhaul their infrastructure with an eye on energy efficiency, according to analyst Datamonitor.

Datamonitor's report Smart metering in the energy and utilities sector predicts the penetration of smart metering will increase dramatically from around six per cent of households in Europe and North America today, to 41 per cent in Europe and 89 per cent in North America by 2012.

Smart metering uses machine-to-machine communication to enable the real-time transmission of meter readings to the utility - meaning companies can save on staff costs as meters no longer need to be read manually. The comms channel is also two-way, enabling the utility to send data to the customer as well - such as a higher tariff during peak usage hours to encourage people to reduce their power consumption. This enables energy use to be more effectively and efficiently monitored and managed.

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The increasing cost of energy has put power consumption firmly on the political radar - which is one of the factors driving the adoption of smart metering technology, according to Datamonitor.

But the success of technologies such as broadband and wi-fi - and even the development of WiMax - is also playing a part in driving smart metering, said the analyst, by helping to create the high-bandwidth infrastructure needed to transmit the large volumes of data involved. Data generated by smart meters includes information such as time of use, tariffs, tampering and outage detection.

Alex Kwiatkowski, lead analyst in Datamonitor's vertical market technology team, said a high-bandwidth infrastructure is key to widespread adoption of smart metering as mobile networks are looking increasingly burdened.

He told silicon.com: "Quite clearly [smart metering means] sending more data over wireless networks in certain areas than has ever been experienced before so there is definitely a need to make sure the infrastructure - country-wide - is of a standard and of a capacity which allows this real-time collection of data to take place. Otherwise the system doesn't get off the ground."

Kwiatkowski added: "Recognise that there's going to be a heck of a lot of data being sent and received."

The rate of smart meter penetration is predicted to be slower in Europe than North America due to higher rates of customer churn here, said Datamonitor, which gives utilities less of an incentive to invest in a radical technology overhaul. However, Kwiatkowski said he is confident smart metering is on the rise and likely to build "quite rapidly", and that utilities need to understand how to approach the daunting task of overhauling existing systems.