Utilities to deploy 250M smart meters by 2015

Infused by the $3.4 billion in federal grants handed out last week, utilities will ramp up production and installation of digital smart meters by more than 19 percent, with 250 million predicted to be rolled out by 2015, according to a new report out today from Pike Research.
These advanced meters (an example on the left in the image above), capable of wirelessly beaming energy consumption data in real time to both utilities and their customers to encourage accurate pricing and conservation, could represent as much as $3.9 billion in global business in the next five years, the report says.
To put these figures in context, only about 46 million smart meters were in the field last year. The effort will push utilities to replace almost half of the meters they currently have installed at homes and businesses, when most meters haven’t been swapped out for more than 20 years. The government grant awards are supposed to fund the near-term installation of about 18 million meters.
Having lit a fire under utilities in the form of stimulus funds, the U.S. expects to pass up Europe, which currently leads in smart metering expansion. By 2015, about 55 percent of buildings will be equipped with smart meters, the Pike report says. On an international level, about 3.5 percent of electric meters can be considered “smart.” In five years, this number could jump to 18 percent.
Pike acknowledges that this growth is dependent on the development of a universal set of standards — technology specifications that allow smart grid equipment, from meters to substations to wireless networks to backend software, to communicate seamlessly with one another. The National Institute of Standards and Technology is hard at work to ensure that this happens within a reasonable time frame.
But not everyone is thrilled about the smart metering sprint ahead. Wired magazine published an article last week questioning whether rapid deployment of smart grid technology will overlook security concerns. The piece pointed to another announcement from last week that the Information Trust Institute at the University of Illinois received an $18.8 million grant for a five-year investigation of smart grid cybersecurity. At this rate, millions of new meters will already be in the field before some measures to fend off hackers and viruses are applied.
The Wired article also pointed to an experiment in which a segment of the grid was intentionally infected with a digital worm, which successfully spread from meter to meter, knocking out power in 15,000 homes for a full day. The findings were largely ignored by the Department of Homeland Security.
Still, the Department of Energy promises that utilities and government agencies alike are taking security precautions very seriously — there are even terms built into the recent grants that force recipients to prioritize security in their operations. Even if they do, new, more sophisticated attacks will no doubt evolve, forcing smart meters to be replaced every several years, instead of once a decade. This could get pricey.
Other smart grid and energy analysts are also concerned about the necessary replacement rate of meters as technology improves. Deploying first-generation Smart Meters to markets of millions is almost like handing out the first-iteration iPhone to every American citizen. When new, more efficient meters enter the market, will utilities roll out replacements with the same gusto? Will they even be able to afford to once the government money is gone?
The Pike report sounds like good news on the surface, but now that utilities have cash-in-hand to make the smart grid happen, everyone needs to admit that building out a cleaner, more efficient system won’t be as easy as a one-time deployment of meters.
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