The Internet of Things (IoT) and how it could impact the electricity industry

Despite the promise, the anticipated fall in the price of electricity is not coming to the average Australian consumer any time soon. In addition to production challenges, the industry is also trying to deal with inefficiencies in the grid. The seemingly straightforward solution proposed is a grid with smart meters everywhere, eventually leading to a nation-wide electricity Advanced Metering Infrastructure (AMI).

The cost of implementing this plan will run into the tens of billions of dollars and is probably not going to bring the cost of electricity down. Not straight away. Not in the decade following the implementation.

The smart meter roll-out is underpinned by the best intentions of providing more frequent and up-to-date consumption information to households and helping manage the load on the grid. The costs and concerns around the project, however, give stakeholders a cause for pause, and to consider alternatives. Smart meters alone have proven to be ineffective in changing energy consumption habits.

The variety of needs and motivations behind rolling out smart meters can be met, without the upfront costs involving expensive devices and the increased ongoing operational costs of maintaining a utility owned network.

Rapid technology lifecycles are making business planning for utilities and metering providers even harder. Current strategies for AMI rollouts run the risk of getting caught in a technology cul-de-sac in a few years’ time due to the advent of newer technologies providing similar benefits, faster and cheaper.

Advances in computing power, data management and communications bandwidth make the Internet of Things (IoT) a clear and present alternative towards transforming grid resilience and efficiency. As defined by the IEEE’s IoT initiative, IoT is “A network of items – each embedded with sensors – which are connected to the internet”. Many intelligent electronic devices deployed at substations and distribution networks, coupled with a grid architecture involving applications, sensors and networking can make the existing infrastructure smarter.

The challenge is charting a path to achieve the intelligent grid vision using cost-effective strategies. Meeting this challenge requires tuning out the noise about industry disruption to identify and seize the opportunities that IoT technologies enable. To realise the full potential of IoT technologies, we need to understand how to create and capture value from information

An intelligent grid doesn’t have to be billions of dollars and decades away. Meeting the challenge requires navigating the hype about ‘smart devices’ and considering proven, smart approaches to electricity data collection and management, where the real value of the smart grid lies – for consumers, retailers and generators. The time to seize the opportunity presented by the Internet of Things is now.

To learn more about how electricity stakeholders in the Australian utilities space can find inexpensive alternatives to smart data collection, read the DataCol white paper – The Long Road to AMI.

DataCol has decades worth of experience in delivering cost-effective metering solutions and practical advice to electricity industry stakeholders around the world.

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