Electricity metering continues to evolve and develop. The technology behind the meter keeps getting smarter and allowing for more than just a simple measurement of electricity throughput. Thus advanced metering infrastructure (AMI) is considered to be a key element of grid modernisation, taking the power and energy industry to new heights.

This article first appeared in ESI Africa Issue 2-2020.
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AMI has increased the availability of more granular and more readily available data on customers’ electricity usage. Traditionally, consumption information was available at best on a monthly basis, with a one-way flow of data from the customer to the utility.

Now, with more detailed information and relevant insights about their energy usage, customers can become active participants in lowering their bills; improving their health, productivity, and comfort; and providing value back to other participants on the grid.

These data are critical building blocks of a more active marketplace for demand-side resources in which customers, working with or through third parties and utilities, support the integration of renewables into the grid, foster reliability, and build resilience (Relf et al 2018, ACEEE 2020: p1).

Interval data can come from multiple sources, including AMI, communicating smart thermostats, customer sub-metering devices and sensors, and other advanced metering functionality (AMF). AMI is the most prevalent source of interval data about customers’ electricity use. It consists of meters that collect electricity consumption data in daily or smaller intervals, as well as the communications networks and data management systems to transmit, store, and process the data.

Declining costs of renewables and distributed energy resources (DER), along with policy efforts supporting decarbonisation, are boosting the value of flexible demand-side resources and hastening their deployment. To take advantage of this opportunity, utilities, markets, and customers require good information about what services demand-side resources can provide.

Utilities need more granular load forecasts to support high-quality distribution and integrated resource planning that better anticipates grid needs. They also need customers to be able to see and respond to variation in the cost of delivering energy throughout the day and year, which requires time- and eventually location-based pricing or valuation.

AMI rollouts – sometimes included as a part of smart grid or grid modernisation plans – tend to highlight operational benefits to utilities. Additionally, many also cite potential customer benefits, including bill and outage management and opportunities, through their actions, to save energy via efficiency and demand response.

Benefits of Advanced Metering Infrastructure

For utilities and grid operators, AMI provides a variety of operational benefits, including reduced costs for metering and billing, faster responses to outages, and improved safety. The operational benefits of AMI compared with traditional manual metering have typically been the primary rationale used by utilities and regulators to invest in these systems.

The capabilities of AMI as an information resource and tool for customers to reduce their costs and achieve other benefits generally have been underutilised. This scenario has been observed through

multiple utility surveys and interviews with industry experts. Nevertheless, there are important ways that AMI can enable and support customer energy efficiency savings via several use cases. These strategic uses include:

• Enhancing the quality of insights on energy use from near-real-time feedback.

• Providing time-varying pricing that reflects fluctuating energy costs at different times of day and year. Near-real-time feedback, combined with communications and possible automation, can better inform and motivate customers to respond to pricing signals and change their energy use accordingly.

• Targeting customers for programmes best suited to their energy use profiles.

• Promoting grid-interactive efficient buildings that extract more grid value from customer programmes by providing more flexible demand.

• Supporting energy procurement and meter-based pay-for-performance (P4P).

• Producing granular data needed for advanced measurement and verification of customer energy and demand savings.

• Enabling conservation voltage reduction on electricity distribution networks

It is important to note that energy savings possible through different uses of AMI to advance energy efficiency vary. The results for some applications have been well documented; these include (as percentages of total annual electricity use in kilowatt-hours):

• Near-real-time and behavioural feedback: 1-8%
• Pricing with time-varying rates: 1-7%
• Conservation voltage reduction: 1-4%

Other uses of AMI have a high potential to improve energy efficiency programmes and evaluation, thereby contributing to and supporting customer savings. For example, in programme design, AMI data can be used for customer targeting and recruitment. In programme evaluation, AMI can provide accurate and timely data to facilitate P4P approaches as well as allow rapid feedback to management for programme improvement.

Practices to leverage AMI to save energy

Leveraging AMI to save energy requires active efforts from utilities in their roles as energy efficiency programme administrators, grid planners, and grid operators. Utilities are also the primary entities identifying AMI technologies, selecting vendors, and investing in these resources on behalf of the system and their shareholders.

Utilities need the support of regulators and stakeholders to implement AMI in a manner that optimises customer as well as operational benefits. Utilities also need to break down traditional internal business and operating silos to manage and use AMI to its fullest capabilities that will benefit customers and system operations.

Utility and regulatory practices that support robust AMI utilisation include:

• Crafting effective communications that inform, engage, and motivate customers.

• Quantifying and incorporating benefits from energy savings in business cases.

• Adjusting shareholder compensation for AMI based on performance in delivering customer benefits from AMI investments.

• Setting clear and reasonable performance standards for data access and energy savings.

• Encouraging innovation and pilots that leverage AMI, including innovative rate designs, new means of delivering energy use feedback, and new programme design tools that use AMI data, such as P4P and targeting.

Final word

At present, utilities are underexploiting AMI capabilities and attendant benefits, thus missing a key tool to deliver value to their customers and systems. This is due in part to organisational barriers including silos and workforce challenges, data access and sharing issues.

In addition to the barriers are difficulties in communicating the benefits and costs of AMI to key stakeholders. AMI data can help utilities and third parties create better, more compelling, more cost-effective demand-side offerings. Utilities can learn from the experiences of their peers that have been successful in rolling out AMI and associated pricing and customer programmes.

It is important for utilities to actively engage their customers and offer a range of services to support their energy saving investments and actions. AMI itself is just a tool that can enable energy markets to support energy efficiency and clean energy goals.

When used effectively by utilities or third-party service providers, AMI can improve grid performance, save energy, and reduce customer bills. ESI

This article is based on an adaption of a report, Leveraging Advanced Metering Infrastructure To Save Energy, compiled by the American Council for an Energy-Efficient Economy (ACEEE) in 2020. www.aceee.org/research-report/u2001