The U.S. Environmental Protection Agency’s (EPA’s) plan to regulate carbon emissions is just the latest challenge facing the U.S. electric power system. Technological innovation is disrupting old ways of doing business and accelerating grid modernization. Earlier this year, AEE released Advanced Energy Technologies for Greenhouse Gas Reduction, a report detailing the use, application, and benefits of 40 specific advanced energy technologies and services. This post is one in a series drawn from the technology profiles within that report.
A smart meter is an electrical device that records consumption of electricity in time intervals of an hour or less, typically 15 minutes. The meter communicates this information, along with data on power outages and quality, to utilities for monitoring and billing purposes, typically over a secure communication network. It is also possible to enable two-way communication with smart meters, allowing utilities to relay detailed energy usage information back to the customer, enabling more proactive end-user energy management. Smart meters are the central component of Advanced Metering Infrastructure (AMI), the broader infrastructure that allows the utility to communicate with smart meters, enabling new products and services as part of the “smart grid.”
The market for AMI in the United States was over $2.2 billion in 2012. Smart meter deployment by utilities has become commonplace, with an estimated 46 million smart meters installed in the U.S. by mid-2013, covering about 40% of households. As an example, CenterPoint Energy Houston Electric, LLC, completed the installation of more than 2.2 million Itron smart meters as part of its smart grid initiative. In 2012, Itron reported that CenterPoint is now electronically reading meters at a 99.5% accuracy rate.
As one of the foundational components of the smart grid, AMI sets the stage for other grid management technologies to connect and improve the grid, making it more flexible and reliable. First, utilities are beginning to use the data provided by smart meters to improve the efficiency and reliability of the electric system. The use of smart meters results in operational cost savings for utilities; a utility with a service territory of 1 million households is estimated to have operational savings of $77 million to $208 million, consumer-driven savings of $100 million to $150 million and a net benefit of $21 million to $64 million over a 20 year period. Second, customers can use smart meter data to make informed decisions on energy usage, provided they are given the tools necessary for acting on the data. This can lead to lower overall energy usage and also reduced usage during peak demand, when power plant emissions tend to be higher, thus reducing carbon emissions.