Market Insight

IoT Shines at EUW - November 2015

November 17, 2015

Michael Markides Michael Markides Associate Director, Smart Utilities Infrastructure
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The Internet of Things (IoT) Shines at European Utility Week

Earlier this month a team of IHS analysts attended European Utility Week (EUW), Europe’s premiere tradeshow for technology providers in all utility segments. Analysts with specialties ranging from energy storage to smart cities to smart metering all observed the strong unifying presence of the Internet of things (IoT).

End-equipment suppliers, semiconductor manufacturers and emerging IoT operators were all exhibiting their wares, in hopes of swaying momentum for their products and services, in what is quickly becoming a very crowded utilities vertical market.

Conference attendees were looking for answers to the following questions, to help them succeed in the world of IoT:

How will utility devices of the future communicate with each other?

What else will they communicate with?

What is the best way to gain the trust of utilities in Europe, so they will look favourably on the benefits of IoT -- and potentially even become IoT pioneers?

In Europe many smart electricity meter tenders have been awarded with some larger rollouts are already underway. The dialog is now changing in two main ways: first, smart metering has dominated the European smart utility landscape for almost a decade, somewhat limiting discussion of other smart utility applications; and second, the attention paid to smart metering has somewhat limited the types of new entrants to the market over the past five years.

The shift to IoT technologies appears at the right time to take advantage of this lull, as it introduces a whole new way to review how smart meters will work and for what purposes. The IoT concept also alters the perception of what a smart utility can do. In fact a smart meter installation can rapidly change into a smart cities platform – enabling other smart utility applications and a host of other IoT applications that support critical infrastructure.


What IoT means for European utilities

European utilities have been dealing with two somewhat unrelated technology issues, over the past decade: first, the installation of smart metering continues the EU-wide focus on improved energy management and customer service; and second, the problem of maintaining a stable electric grid created by the influx of distributed energy. These two issues arise primarily from outside regulatory influences that essentially give the utility new opportunities and technologies, but also cause problems by mandating solar rebates that wreck havoc on the grid itself. An IoT approach potentially holds the key to engaging more stakeholders at the city level, while also helping utilities in Europe better understand how to implement a broader set of utility-technology use cases. With new stakeholders on board, the European utilities are potentially in the driver’s seat for the next decade of smart cities and IoT implementations -- pioneering what it means to use modern technology to monitor critical infrastructure.


Conclusions for technology providers

There are a few key takeaways from the EUW tradeshow for utility technology providers to consider:

While IoT promises a better return on investment, more potential customers and a stronger bridge potentially to better interoperability, plenty of problems remain in the short term. There are millions of installed smart meters in Europe with millions more under contract. How does this affect the potential for SigFox and other IoT operators to take hold in the utilities vertical – when private or proprietary networks are already installed for smart metering?

Though we are mostly discussing the European electric grid here, do not be surprised to see the water sector take the lead, in terms of IoT market maturity. The market for smart water meters has been quietly growing in Western Europe and the Nordic region for years now. The market is running well on an existing business case that suppliers are meeting – with no other stakeholders or applications needed. Water is also more often municipally run, or run by smaller utility-governing bodies more closely aligned with city or provincial government (relative to electricity in Europe), essentially aligning smart city stakeholders. With IoT now coming into play in Europe, we can expect more supply-side agreements between IoT technology companies and operators and smart water technology vendors.

With new entrants, new attention and new technology comes added confusion for the utility. The key to success for any technology vendor in the slowly moving utilities vertical is to find ways to increase end user trust, in every way possible. For example Semtech, the technology supplier and driver of the LoRa technology and LoRa Alliance, has changed their strategy in Europe. Semtech is now reaching out directly to telco operators in Europe, to create a way for them to install and validate LoRa technology. The company’s leadership believes that having telcos on-board with their IoT technology is the best route to earning the trust of European utilities.



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