Managing the challenge of smart meters, an international perspective Dr. Daniella Muallem, National Metering Unit, IEC Abstract The move towards

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1 Managing the challenge of smart meters, an international perspective Dr. Daniella Muallem, National Metering Unit, IEC Abstract The move towards "smart metering" continues to make progress around the world, despite cases of negative cost-benefit-analyses, poor customer reactions, and a degree of skepticism within the utilities industry. To date the largest deployments have taken place in the USA, with Europe following closely behind with a target of 80% deployment by The case for smart metering typically hinges on the potential benefits: to enable energy efficiency, improve network performance, provide better customer service and support integration of renewable energy. However, to gain the benefits of smart meters requires a significant effort to implement new technology, manage and make use of the data produced, as well as drive a change in customer behavior. For example, by becoming more efficient or using less energy at peak times. This review provides a state of the market perspective on the approach to and status of meter deployments and describes Israel's position in terms of technology and drivers, in the context of developments in Europe. Introduction Utilities around the world are facing challenges to provide reliable electricity supply, meet customer expectations and comply with regulatory requirements for reduced emissions and increased renewable energy. In this light "smart grid" has become a hot topic, frequently referred to as the solution for integration of renewable energy, distributed generation, and demand management. A Smart Grid may encompass a variety of connected components, such as meters, sensors, distributed generation, storage and electric vehicles deployed throughout the network in an integrated way to enable visibility, automation and control, network optimization, and demand management. At the heart of smart grid are smart meters and associated communication technology, i.e. Advanced Metering Infrastructure (AMI). Smart meters/ami provides greater visibility of the Low Voltage (LV) network, and a tool for bidirectional interaction with end consumers. Smart meters/ami is the most widely deployed smart grid technology to date. The market is most mature in the US, which got a big push from the Smart Grid Investment Grant program under the American Recovery and Investment Act (ARRA) of There are now upward of 50 Million smart meters deployed in the US, covering over 40% of US homes [1]. In Europe, the picture is heavily influenced by EU-wide directives and national regulations. The 2009 European Electricity Directive required member states to carry out a cost benefit analysis (CBA) for smart metering, and set a deadline of 2020 for 80% coverage in cases where the CBA is positive [2]. Smart meters have already been rolled out in Sweden, Finland, and Italy, with other European countries at varying stages in the process. Beyond Europe and North America, the largest number of smart meters is likely to be installed in China, which is pursuing smart meter deployments and is reflected in a number of Chinese manufacturers entering the market. The Case for Smart Metering

2 At the most basic level, smart meters/ami provides utilities with the ability to remotely read meters and provide customers with accurate monthly bills. However, deployment of AMI and smart meters has the potential to provide greater benefits for the network operators, the end consumer and broader society. For example meters can provide network operators with information about outages or power events, support network and asset planning through load forecasting at the level of individual transformers, and enable fraud detection. The end consumer can be provided with high resolution data, which in turn can be used to offer the customer additional services, better transparency, as well as drive energy efficiency and load management. Typical functionalities of smart meters may include; load profile interval data, power event log, remote disconnect and reconnect, load limit, tamper detection, capability for multiple tariffs, and remote firmware upgrade and software configuration. Smart Metering in Europe The European electricity market is unbundled and partially deregulated, with different players acting as generators, transmission system operators (TSO), distribution system operators (DSO), and electricity retailers. Typically, generation and retail are competitive markets, while transmission and distribution, which are natural monopolies, are regulated. Network tariffs are subject to price controls. With the exception of the UK, DSOs are responsible for smart metering in Europe. The first deployments of smart meters in Italy and Sweden, were rolled out with the primary goal of switching to remote meter reading and providing more accurate, monthly billing for customers at a time when there was very little consumer awareness of the topic. These rollouts in Italy and Sweden were carried out on the basis of national decisions. However, the 2009 Electricity Directive set out Europewide requirements, and in October 2011, the EC published a set of common functional requirements of the smart meter, defined in terms of 13 key functionalities [3]. The drive to increase competition at the electricity retail level, and provide better services for customers was one of the main drivers for smart metering. The business case varies from country to country dependent on local regulatory conditions, but with growing deployment of distributed generation/loads such as residential PV, and pressure on utilities to retain customers smart metering is seen as a potential way to address these issues. In June 2014, the European Commission published a benchmarking report [4], which describes the status of smart metering in Europe (Table 1). This report highlights that: 16 of EU-27 Member States had positive CBAs. 14 have already decided to go ahead with roll-out. 7 of EU-27 Member States had negative CBAs/or inconclusive/or only positive for some groups of customers. In 4 member states CBA not available.

3 There are currently around 45 million smart meters mostly Italy, Sweden and Finland Table 1 Smart Meter Status in Europe (Data taken from [4]) Member States Austria, Denmark, Estonia, Finland, France, Greece, Ireland, Italy, Luxemburg, Malta, Netherlands, Spain, Sweden, UK Poland, Romania Belgium, Czech Republic, Lithuania, Portugal Germany, Latvia, Slovakia Bulgaria, Cyprus, Hungary, Slovenia CBA result Positive Positive Negative/ inconclusive Positive for specific customer groups Not available at time of writing Roll-out status Going ahead Decision Pending Germany and Slovakia have legislation in place Power Line Carrier (PLC) Technology In contrast to the US, where wireless technologies (RF mesh, long-range radio, and public cellular) are preferred, in most of Europe wired Power Line Carrier (PLC) solutions are the dominant technology. The main exception is the UK which is which is entirely deploying cellular and proprietary long range radio for last mile communications. Some European countries rely entirely on PLC (such as Spain). In others cellular technology (GSM/GPRS) was used for the initial pilots, but PLC has been chosen as the technology for rollout (such as Netherlands). In many cases cellular will continue to be used in cases where the PLC signal from a meter is not good enough. PLC has the advantage of using existing infrastructure, which helps to keep operating costs low, and avoids the capital costs of cellular modems. Moreover, many of the most commonly used smart meter PLC technologies operate on the Cenelec A band, which is exclusively available to utilities in Europe and Israel. The key priorities for smart metering communications technologies are achieving maximum coverage and maintaining connectivity. Other important factors include speed and capacity of data transfer, infrastructure costs, scalability, security, level of control, and availability of existing standards.

4 Challenges 1. Lack of standards and evolving technology Typically the approach to using PLC smart meter systems involves PLC communication between the meter and a data concentrator, and some type of wireless communication such as GPRS from the data concentrator to the head-end system. Despite the similarity in approach, there are a variety of solutions available using different technologies. For example, at the physical layer there may be differences in the form of modulation used. Many of the earlier deployments were based on Frequency Shift Keying (FSK) modulation. More recently there has been a move towards Orthogonal Frequency Division Multiplexing (OFDM) modulation, which is considered to enable faster data transfer. At the application layer there are a range of different protocols, but the market is converging towards the DLMS/COSEM protocol, an international standard, for data exchange between meters and Data Concentrators. Standards are considered particularly important to ensure interoperability, avoid a situation in which utilities are tied to one vendor and to bring costs down. However, in the absence of common standards, utilities in Europe largely developed their own solutions independently. For example, Enel in Italy developed its own solution based on FSK technology (Meters and More), Iberdrola in Spain developed its own OFDM solution (Prime) and EDF developed its own linky OFDM solution (G3). Prime has evolved into a standard, with multiple vendors supplying Prime certified meters and data concentrators; Prime concentrators are interoperable with meters from any Prime meter manufacturer and there are now almost 5 million Prime meters deployed world-wide. However, as yet there is no well-defined standard for the connection between the Data Concentrator and the Head-end System, which means that different Prime concentrators each require their own head-end system. Although G3 is a newer technology, and there are far fewer vendors that are production ready with G3 meters, there are a number of manufacturers participating in the G3 alliance, that are expected to be able to supply G3 meters towards the end of More recently a group of four manufacturers developed a common standard, IDIS, to offer another interoperable solution. The IDIS standard supports a common data model, based on DLMS/COSEM for different types of physical transmission methods including PLC-FSK, PLC-G3 and GPRS. The advantage of the IDIS solution is that a single IDIS head-end system is required for both IDIS GPRS and IDIS PLC meters. Clearly meter manufacturers would rather invest their production resources into a common solution, rather than on a country by country market basis, and at some stage there is likely to be convergence between the different standards. However, at this stage it is hard to predict how the technology will continue to evolve. 2. Managing the Data

5 There needs to be a way to read, verify, store and process the data emerging from smart meters, not least to enable integration with the billing system, but also for a variety of analysis, and operational applications. Meter Data Management (MDM) systems have been developed specifically to handle meter data, with the first applications constructed for large C&I customers using AMR (Automated Meter Reading). There are a number of vendors offering MDM solutions, which provide the basic functions of verification, estimation, and editing (VEE), enable the meter-tocash process, and a variety of additional functions. The MDM market in Europe is growing, but yet again the lack of standards for communication between data concentrators and head-end systems has proved an additional challenge. Some utilities that were unable to find an off-the-shelf solution with a ready interface to their particular head-end system, opted to develop their own solution (such as Energa in Poland), or alternatively opted to choose an end-to-end solution from one vendor (such as a number of utilities in Finland). Ultimately MDM systems can be integrated with other utility back-end systems, such as Outage Management System (OMS), or Network Information System (NIS). Enel in Italy, which has the most mature deployment, is among the first in Europe to move towards greater integration of smart meters. 3. Actual benefits vs. Predicted benefits Critically, in many cases where there was a positive CBA, the business case hinges on being able to influence customer behavior to reduce peak demand, and overall consumption. This is has been predicted to depend on providing the right feedback to customers, and implementing different tariff plans. However, to date although over 5 million smart meters have been deployed in Europe, there is still little evidence about whether the actual benefits will match the predicted benefits. For example in the Netherlands, where small scale rollout has begun, actual electricity energy savings achieved are limited at 0.6% compared to the CBA predicted 3.2%. It remains to be seen whether greater savings will be achieved with mass rollout (due to begin in 2015) and with greater customer awareness [5]. Current status of smart grid in Israel In parallel with developments in Europe, smart meter trials have begun in Israel. Similar to results from CBAs conducted in Europe, in Israel some of the key potential benefits depend on being able to influence customers to change consumption behavior. This could lead to improvements in energy efficiency, reduced emissions and customer bills, as well as a reduction in peak demand, thus avoiding the need to maintain as much reserve capacity. During , the Israel Electric Corporation (IECo) completed a technology trial of ~4300 mostly residential smart meters in the cities of Binyamina, Givat Ada and Ceasaria Industrial Park. The purpose of the trial was to test different technologies, to gain learning about technology performance, and challenges with installation and operation. Following the European model, two PLC standards (Prime & IDIS), a Proprietary S-FSK as well as GPRS were tested. The company is now in discussions about a second stage trial, to make use of this learning to deploy 30,000 residential smart meters across a number of sites in Israel, based on existing PLC standards. This second stage trial

6 would be for the purpose of investigating the ability of different residential tariffs to influence behavior across the demographic spectrum. References: [1] Utility-scale smart meter deployments: Building Block of the Evolving Power Grid, Institute for Electrical Innovation 2014 [2] Directive 2009/72/EC of the European Parliament and of the council, 13 July 2009 [3] untionalities_report_full.pdf [4] Benchmarking smart metering deployment in the EU-27 with a focus on electricity, European Commission June 2014 [5] Smart meter roll-out in The Netherlands, Inger Huizing, Ministry of Economic Affairs, June 2014