Amane Advisors follows the latest trends in the smart metering market for water and takes a look at the larger opportunity for vendors and operators to succeed
Smart metering, especially in Europe for advanced metering infrastructure (AMI), started back in early 2000s and even earlier in North America. From 2010 to 2016, we saw a significant uptake in the number of announced and deployed projects with Europe at the forefront, especially in France, Spain, Italy, Netherlands, Denmark and the UK. Drivers include such goals as reducing non-revenue water (NRW), detecting leakages, and improving customer service.
In the UK, water utilities have implemented asset management plan (AMP) initiatives to achieve such goals as improving operations and lowering their operating expenses. The period AMP 5 (2010-2015) saw a significant increase in smart meter deployment and higher metering penetration. Utilities in other parts of the world, such as Chile, Saudi Arabia, UAE and elsewhere, followed suit by picking from the proven best practices.
However, the growth in smart metering and the announced projects have slowed in the last few years as many utilities around the world have struggled to see benefits in reducing non-revenue water and improving water efficiency relative to the investment required. It is something all utilities need – but not all have realized the need yet. Over the last few years, Amane Advisors has talked to many metering managers across various utilities in many countries. The common theme has been that they have struggled to identify savings and/or are sitting on top of a pile of data not knowing what to do with it. For example, we have heard such comments as, “Some of our meters collect data every 15 minutes, and all this valuable data sits there without being fully utilized or analyzed in real-time.”
As utilities grapple with the challenge of leveraging the vast amount of data provided by smart meters, the solution – and opportunity for market vendors – lies in this realization: Smart metering is only a piece of the puzzle in a bigger water infrastructure efficiency play. The solution lies in an integrated approach that starts with a robust communications network infrastructure – the backbone of AMI – and incorporates smart infrastructure technologies that address the wide range of challenges that utilities face from improving the accuracy and timeliness of billing, to managing non-revenue water and enhancing customer satisfaction. These technologies include smart meters, leak detectors, pressure monitoring systems and more – a suite of hardware, software, sensors and analytics that provide actionable insights so that utilities can achieve their specific goals and lay the groundwork for future needs.
This is where vendors, in order to create opportunities, need to undertake a significant effort that informs and educates utilities about the features and benefits of smart infrastructure solutions including but not limited to smart meters. But this also creates a perfect scenario for private water operators to gain an edge in winning contracts in countries where such mechanisms are possible.
This is what some players have been targeting, and they have seen success in markets around the world, even including newer markets such as Latin America and Africa, by winning long term contracts where they take on all CapEx investments in improving the network infrastructure and installing new meters to optimize the efficiency of the utility water network.
Smart metering is still expected to remain as part of utilities’ agendas, but more as part of an integrated overall digital strategy to improve overall efficiency and cut costs rather than a standalone project to improve a specific performance indicator. Operators who approach this market with a holistic package to improve the utilities’ performance across the infrastructure to reduce water loss and promote water efficiency would likely see successes.
Where will the next metering-related growth come from? Perhaps, in household meters for wastewater. Instead of viewing wastewater as a result of water consumption, metering could provide an additional revenue stream for utilities, but further development of wastewater meters by vendors would be required to capture this opportunity.