The smart grid is engrained in the fabric of modern global infrastructure. Through the adoption of digital technology, two-way data transfer, wireless networks, and intelligent grid management systems, electrical distribution systems can dramatically optimize energy efficiency and lower consumer costs.
This mass adoption initiative is largely enabled by the Internet of Things (IoT), a culmination of smart sensors, communication networks, and data processing. IoT has allowed both new and historic electrical infrastructures to become ‘smart’ and more efficient.
This article identifies how smart grid IoT systems contribute to Advanced Metering Infrastructures (AMI) and other smart grid technologies.
Smart Meters
The most abundant use of IoT in smart grid applications is via smart meters. These meters are network-connected utility meters that monitor the consumption and status of utilities at the point of use, or at critical distribution points throughout a grid infrastructure, and feature two-way communication with the utility provider.
Most importantly, smart meters help reduce wasted energy. Early studies by the European Commission conducted in 2012 indicated that the adoption of smart meters reduced household electricity bills by 12% on average, while large commercial consumers saved 58%.
Historically, meters required manual tracking of a customer’s power consumption. In the earliest era of utility metering, this required utility personnel to physically track analog utility meter readings at specified time intervals, such as once every two months, which was costly and inefficient.
Automatic Meter Reading (AMR) technology was the first step toward a smart grid. However, even remotely monitored, AMR-enabled utility meters are not considered ‘smart,’ as they did not provide two-way communication.
Modern smart meters allow utilities to collect data coming from the smart meter as well as send commands, updates, and information to the meter. A provider can also remotely disconnect or regulate service, such as turning off power on a defaulted property. They can also set modulated consumption thresholds for time-based pricing.
Smart meters are most often seen in electrical utility applications but are also used to monitor natural gas and water. Electrical utility smart meters allow for real-time power sensing, power outage notifications, bidirectional power metering (if power is generated by the endpoint, like via solar panels), power quality monitoring, remote service disconnects, and meter data management software.
The IoT and Advanced Meter Infrastructure in Smart Grids
Smart meters are only as ‘smart’ as the infrastructure that they are connected to. IoT technology allows smart meters to be physically and/or wirelessly connected to the utility’s grid management. In the case of electrical smart grids, smart meters network within a localized mesh that then transmit to a local utility hub. These hubs are then connected to other local hubs, as well as the utility’s central IT hubs, to allow for the utility company to provide demand-based optimization and smart grid management practices.
Advanced Meter Infrastructure is the output of smart grid IoT technology and utilizes both wired and wireless IoT communication techniques. For example, Byram Labs EnergyAxis REX2-EA smart meter utilizes both 900MHz and 2.4Ghz ZigBee wireless communications to act as a mesh-network-connected smart meter endpoint, as well as a gateway for other smart energy devices in the home. An array of smart meters connected via wireless mesh network can then, for example, be connected to a hub that is wired via landline, fiberoptic, or other telecom infrastructure to the utility’s IT servers.
An advanced metering infrastructure is much more than just an array of smart meters. Rather, this sophisticated infrastructure consists of smart meter hardware and software, the communication networks that connect all subnetworks and hubs, meter data management software and IT systems, and supplier operational systems that allow for action of the data generated by a smart grid.
IMAGE 1: A highly simplified electrical smart grid that showcases the innerworkings of utility generation, distribution, use, and control.
In the above image, every hub and endpoint within the electrical grid contributes to the advanced metering infrastructure. Highly sophisticated data management software and hardware is used to gather, understand, manage, and optimize the electricity generated and consumed, all of which contributes to the Advanced Metering Infrastructure and smart grid.
Global Advanced Meter Infrastructure Adoption
Smart meters and advanced meter infrastructure is being implemented around the world at breakneck speeds. However, adoption of smart grid technology does differ between continents, countries, states, and cities.
In countries with stringent commitments to swiftly combat climate change, smart meter adoption is much more widespread. Currently, the European Union has seen the highest penetration rates of smart meters, with an original 2014 goal of smart meters in 80% of utility endpoints by 2020. This goal went unmet by 2020 but many countries within the EU did achieve this goal.
Countries such as Sweden (100% adoption), Finland (100% adoption), Estonia (98% adoption), and Denmark (80% adoption) have achieved the benchmarks set in 2014. However, countries like Germany, Czech Republic, Greece, Croatia, and Cyprus decided against mandating smart meter rollouts over concerns for data privacy, specifically related to the IoT aspects of smart meters, or failure to meet legal requirements.
By comparison, in 2020, the United States (the second-highest electricity consuming country globally) has a current smart meter penetration rate of approximately 50%. That’s a total of 102 million AMI installations, with only six states boasting over 80% of households having smart meters (California, Georgia, Maine, Michigan, Oklahoma, Vermont), per EIA. An additional six states have adopted regulations that aim for future implementation rates of 80%, but there are no country-wide requirements for smart meter adoption as of 2022.
For more information on the global market adoption and projections for smart meter use, the obstacles for smart meter adoption, and design challenges for smart meters, be sure to check out our article, Smart Meters: Designing a key part of the smart grid ecosystem.
A Future of Smart Grids and IoT
Global smart grids are highly dependent on the incremental adoption of smart meters and the necessary IoT infrastructure to support them. Globally, there is dramatic progress towards utilizing smart grid technology to optimize energy consumption, reduce energy waste, save consumers money, and combat climate change. There are many obstacles to widespread smart grid adoption, but the IoT is enabling endpoint adoption of critical smart grid infrastructure around the globe.
