For three days in November, the brightest minds from international manufacturing giants to young technology startups converged in Barcelona for European Utility Week (EUW), the premiere annual tradeshow in Europe across all utility segments. A team of IHS Markit analysts were also present, to cover the most up to date information as everyone looks to the future of the utility metering and power grid markets.
The future for metering is undeniably bright, IHS Markit forecasts that by 2021 annual revenues in metering hardware alone will eclipse $15 billion USD. On top of this, as new technologies are adopted and new business models emerge, such as software as a service, those who meet the needs of the growing market stand to gain great rewards.
As last year’s event saw a clear focus on the rise is the Internet of Things (IoT), the 2016 edition of the show seemed more focused on software and services as hardware updates increasingly move to the background, whilst the utilities themselves could benefit from getting their voices heard more clearly.
One particular area which exhibitors were extremely interested in was extending their business models to include software or data analytics as a service. The tremendous benefits of the wealth of data now available to utilities also present their own challenges, meaning data management solutions become critical.
Many of the biggest show stands boasted promises of end-to-end solutions – from the customer-facing side of automated billing, through core data management hosting and analytics, through to grid management and optimization. On the grid side, power companies need solutions for their asset management, the integration of renewables and network design. Hardware manufacturers are bringing to the market new software and services to cope with the need of power companies.
However, IHS Markit believes that rather than a one size fits all solution, a focus on solving specific problems for utilities will make for a clearer path to success – at least based on the evidence of actual deployments (and not just the marketing) to date.
While the phrase “Internet of Things” still was used quite frequently this year, conversations were more focused on specific technologies and have begun to address the new challenges presented by a more connected world. Although not the main focus yet, this means the topic of cyber-security is also on the rise and could become a hot topic for next year, in both protecting consumer data and the utilities’ assets.
Another change in focus is the realization that connectivity is not a “beauty contest”, as one panel moderator noted. Global regulatory environments surrounding connectivity are diverse and different solutions are more suited for certain technical problems. There is ample opportunity for coexistence depending on the specific needs of the customer.
Within this ecosystem, much of the conversation moves towards choices between LoRa, SigFox and later with NB-IoT solutions. On the evidence of this show the answer is increasingly regional; LoRa Alliance stickers on many of the booths and then regional pockets of SigFox interest, meanwhile Huawei/Janz CE announcing the “world’s first” NB-IoT meter shows hardware is coming even if the technology doesn’t seem ready for any full deployment just yet.
IHS Markit will be further exploring the topic of IoT connectivity in utility metering in an upcoming topical report.
The natural progression from isolated hardware deployments towards more connected and managed services will continue each year, but it was interesting to see just how much floor space was dedicated to that message in Barcelona.
However, the big knowledge gap also happens to be the biggest roadblock to growth in these smart systems – the voice of the utility and their willingness to pay for these solutions. Utility companies were not prominent at the show, opting to walk the floor rather than owning stands themselves, making it hard for many to get a clear understanding of what matters to them most. Where do utilities feel the most pain within their current systems? Which ROIs can convince them to spend money on infrastructure and services? And who is trying to take the lead as the prime contractor?
In the short-term at least, it still seems that the route to success is through clearly defined and productized offerings such as billing automation, rather than utilities taking the advertised end-to-end solution from a single provider.