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Market Insight

Gas meter growth exceeds expectation in 2018

October 14, 2019

David Green David Green Research & Analysis Manager – Smart Utilities Infrastructure, IHS Markit
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Over 53 million gas meters were shipped worldwide during 2018, with global growth being driven by large-scale rollouts in multiple key markets such as China, the Netherlands, France, Italy and the UK.  This is according to the latest research from IHS Markit Technology, now a part of #InformaTech.

Communicating meter penetration reached over one in three meters shipped for the first time during 2018 as the key rollouts accelerated even beyond initial expectations and the long-awaited SMETS2 rollout in the UK finally got underway.  In fact, the global installed base of communicating gas meters has already topped 100 million during 2019.

The penetration rate for communicating meters will drop for EMEA as the four big rollouts draw to a close in the next few years, but global penetration will actually rise to almost one in every two meters shipped by 2025.

The next generation

Many regions continue to grow through new gasification (the expansion of coverage for the gas network) and through smart metering initiatives or mandates.  For example, one area of emerging potential comes in India, as smart metering gains greater focus from national and local governments – both for electricity and gas.  Three large tenders released by gas utilities in 2018 point to a significantly increased market potential, even if initial rollout progress is likely to be slow.

However, for markets with higher existing penetration rates of metering and even Automated Meter Reading (AMR) technology, the search is on for vendors to understand which applications will drive the next generation of investment.

As vendors and utilities look at the potential for meter rollouts over the next 5 years, there are two interesting trends that develop:

In the NAM market, a long-standing holdoff on new meter technology investment has started to break in 2018, with over 6 million new retrofit modules shipping to utilities in the year.  This is not just for turning basic meters into communicating meters, but many are upgrading first generation AMR solutions into fixed network Advanced Metering Infrastructure (AMI) meters.  Whilst AMI will always be based primarily on the ROI of meter-to-cash process cost and efficiency, there is growing momentum behind safety focused ROIs helping to justify the utility spend on network infrastructure.  This in part follows high profile incidents such as the Massachusetts fires and explosions in late 2018.  Utilities want to remain ahead of any legislative action, but can also drive more ROI from the same investment through the addition of pressure sensors on the same communications network.

The rise of NB-IoT will bring the opportunity of smart gas metering to new customers, because many utilities do not have the desire, ability or funds to own and operate their communications network.  Less than 10% of smart gas meters shipped in 2018 used Cellular IoT, but this will rise to almost 30% in 2025.  Whilst much of this is in China, there is also rising adoption across multiple other countries.

Enhanced gas meters

Despite the growing market size overall, gas utilities are still cautious to invest and meter lifetimes are long, meaning utilities don’t look to replace hardware often.  Meter vendors are therefore looking to find new ways to entice utilities into shorter meter lifecycles through the use of enhanced features.  Static metering will therefore steadily grow for the forseeable future, but particularly where additional features (such as remote shutoff) are built into the static meters only.  These new features will become the main topic of conversation for hardware in the coming years, along with the evolving business models of software and service solutions that vendors can offer their utility clients.

 

Data and analysis used here is taken from the IHS Markit Electricity Meters Report - 2019, available through the Smart Utility Meter Intelligence Service.  Please contact us for more information

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