By smartgrider In Advanced Metering Infrastructure, Case study Posted 2014-07-12

SWEDEN

SWEDEN

Smart Meter Roll Out

Sweden’s large scale deployment of Advanced Meter Infrastructure began in 2003 when the Swedish parliament decided that by 2009 all electricity customers should have monthly billing based on actual consumption from monthly meter readings for residential and small business customers. Action following the legislation was delayed over a relatively long time period in effort to ease the transition. In 2006 the legislation was amended to require hourly readings from larger customers with fuses above 63 A. Altogether, these requirements resulted in a full scale installation of AMR/AMI systems for nearly all Swedish consumers (5.2 million). The total cost for the full roll out of AMR/AMI systems is estimated at 1.5 billion euro.

Figure 7 : Vattenfall type example of different AMR/AMI system used in their smart meter roll -out

The AMR/AMI system architecture consists of the meters, data collectors and the network company’s data management system for billing. Over the six years of the roll-out smart meter technology advanced significantly, resulting in different types of meters throughout Sweden based on when a network company procured the meters. In 2012, a bill was passed enforcing hourly metering at no extra cost for any consumers subscribing to an hourly-based electricity supply contract. Early experiences show that few end-customers sign up for this type of contract.

 

Regulatory Objectives & Benefits

The main goal of the 2003 electricity meter reform was increased consumer awareness and ability to control their consumption with more accurate electricity bills, simplification of the supplier switching processes, and better information about their actual consumption. It should be noted that there was no regulation as regards to functionalities of the metering system. Smart meters rather became a consequence of the regulation for billing based on actual consumption, requiring automatic and remote meter reading.

Before the reform, electricity for most private customers was read on a yearly basis with billing based on the previous year’s consumption. Customers received a reconciliation bill for the difference between the previous year’s consumption and the actual consumption, as the network company didn’t know the actual consumption until the end of the year. To a large degree this also meant that the customers unaware of their actual consumption, causing frustration once a year when customers were at risk of receiving a large reconciliation bill for the whole year before learning about any change to their consumption. Since July 2009, customers receive monthly bills based on their actual consumption which has led to increased customer awareness and activity in the retail electricity market.

 

Current Status & Results

By 2009 all Swedish customers had smart meters and AMR systems. Over the years since deployment, many network companies have found their roll-out led to both expected financial benefits and to non-financial benefits in service quality, customer satisfaction and improved safety on the network.

There wasn’t much public opposition to Sweden’s smart meter roll-out. In part this was because the majority of the electricity bill in Sweden is the cost of energy and taxes, not the network costs, so the cost of implementing the AMI/AMR was only a fraction of the bill. In the initial proposal for the meter reform the regulator requested hourly metering instead of monthly metering, this was however strongly opposed by the network companies. In Sweden concerns about the accuracy of data and customer privacy in conjunction with the smart meters has rendered little discussion. In general the handling of meter data is regarded as acceptable by the customer.

In terms of AMI/AMR functionality, Sweden’s infrastructure does not yet have all of the components for customer demand response activities. Dynamic pricing, easy customer access to their own data with visualization tools or other components that improve a customer’s control over their consumption are not yet common across the systems, however the functionalities are in most cases sufficient to deliver significant benefits compared to the alternative of not rolling out the smart meters. As the Swedish regulator is shifting the market to hourly metering and considers hourly energy prices, customers will need support to facilitate their response to price signals from the market and any other load management programs. Some of these capabilities are currently under development through the Proactive Forum discussed at the end of this case, while others will be implemented via other channels.

Project Details

• Smart Meters and Advanced Meter Management System
  •  5.2 million smart meters deployed
  • Local communication
    •  50 % PLC (power-line carried communication)
    • 30 % LPR (Low power radio)
    • 15 % GPRS
    •  5 % other
  •  Communication to central system
    • 70 % GPRS
    • 20 % POTS (plain old telephony service)
    • 5 % SWR (short wave radio)
    • 5 % private fixed wire copper or fiber optic networks
• Tariffs:  Currently most customers are charged a price for consumption based on a monthly average but may opt-in to hourly spot-tariffs reflecting to capture more value from AMI/AMR.
• Project Cost:  1.5 billion euro/ 6 years
• Project ROI:  Individual network companies have measured operational savings and increased value related to the decreased costs of switching retailers with the AMI/AMR. Nation-wide benefits are still TBD.

 

Lessons Learned & Best Practices

Customer Engagement

For Sweden, the first step for enabling the customer to participate in a more efficient market was to build their awareness of their consumption and of what type of contract they had signed with their current retailer. Increased customer activity in the retail market was a major driver for AMI/AMR deployment in Sweden. Once customers began to move from annual meter readings to monthly readings, they also became more aware and concerned with their electricity use. This has set the stage for future technology and market pricing that will allow the customer to participate in a more active retail market. There were some opponents to the process of the meter reform, which occurred because important aspects of the customer-utility relationship weren’t clearly investigated before the roll-out. With the initial focus on intended billing and market changes, smart meter installation and customer conservation benefits were a later evolution in the project objectives. With this shift in objectives, customer communication and engagement became more central to the roll-out.

The Role of the Regulator

As with many jurisdictions, a critical factor for the Swedish roll-out of smart meters was the allowance for network companies to include smart meters as part of the asset base to ensure cost coverage. Born out of the initial focus on accurate billing and a more active retail market, the Swedish regulator is now pushing for future customer capabilities built on the AMI system. This pro-active role for the regulator is somewhat unique to Sweden.

The Business Case for AMI

The capability for remote upgrades of the meter software is critical to the overall functionality of the AMI system, and to the value proposition for the customer. Still, all that value was threatened if there wasn’t enough preparation for system accuracy in meter readings and communication. Some early movers found that the business case disappeared with the costs of the field work required to fix inaccuracies and improve the system efficiency. Also the low-voltage network documentation must be accurate and detailed enough for efficient implementation of AMI.

Almost every network company chose to buy complete meter-system solutions under turnkey contracts with long term functionality guaranties. Some of the contracts also included full service for several years, all in the attempt to minimize the risk to the network company and the customer. This shifted the risk to the manufacturer, which had an effect on the meter market. Overall the meter market changed in many ways during the roll-out: several meter manufacturers and suppliers filed for bankruptcy and a few folded their local operations. Some local manufacturers were bought-out in the early wave of consolidations and some players restructured their local business models.

Despite the attempt to mitigate risk, some concern remained over the decision of many network companies to install propriety AMI systems. This was perceived as a risk to technical support and service should the supplier go into bankruptcy. There are some persistent concerns that this might result in many systems being exchanged long before their estimated end of life. This issue is being addressed in part through developing minimum standardized functionality for meters which improves their likelihood of interoperability with other technologies and proper functioning throughout their lifespan. This initiative is discussed later in the Proactive Forum section. Not fully accounted for in the original business case, the improved understanding of the grid behaviour and load pattern has allowed network companies to make more strategic decisions about infrastructure upgrades and has reduced the risk of over-sizing assets. As a platform for other smart grid technologies, many future services will be enabled by the data and the functionality of the AMI.

Communications Operability

A common problem with the roll-out reported by many network companies was the difficulty in getting the communication with the meters to function properly. In general it was found that meter data sent on the electricity grid (PLC-technology) was more problematic compared to for instance radio communication through GPRS which experienced fewer problems. Furthermore, network companies reported situations where meters had to be serviced or replaced because the communication technology was not durable enough.

During the roll-out a few manufacturers delivered batches of meters with faults. This necessitated a replacement of several hundred thousand meters.

 

Vattenfall, 10 Years of Experience with Smart Meters

Vattenfall Distribution, Sweden’s largest network operators, began its smart meter roll-out in 2003. The roll-out occurred over three phases that each focused on different geographic regions in the country. From 2003 – 2008 Vattenfall installed 860,000 meters for residential and commercial customers. The Smarter Meter development in the market during the roll-out, as well as an increased experience of new meters for each new phase was reflected in an increasing functionality and lower incremental investment and service cost as deployment moved forward. Figure 12 shows the functionality of the meters and metering costs over the roll-out phases (AMR1, AMR2 and AMR3), and the degree to which to the overall system is completely (green) or partially (yellow) functional in the areas of remote reading, interval registering, two-way communication, remote management/remote switch off and visualization.

The initial business case for Vattenfall was primarily based on decreased reading and service costs when manual reading could be automated and done remotely. Besides the savings in regular reading for billing, the AMI/AMR also provided operational savings when customers moved in and out, as well as when customers switched from one supplier to another. During the roll-out it also became clear that it was very important to not underestimate the effort needed to reach the expected system performance. Only a slight increase in the number of errors in comparison to the expected level caused much manual work which had large impact on the business case.

Figure 12 : The increasing functionality and decreasing costs of Vattenfall’s AMR deployment through each phase, and overall system functionality. The level of functionality for different AMI capabilities in relation to common European Commission minimal requirements is indicated by the traffic light images where green indicates total, yellow partial, and red no system functionality.

The reduction of non-technical losses turned out to bring large additional indirect benefits that weren’t accounted for in the initial business case. The AMI/AMR system improved Vattenfall’s control of non-technical network losses caused by broken meters, thefts, faults in data quality, faults and missing meter values, etc.

With the steady state operation of the AMI/AMR system, Vattenfall found that it delivers more network benefits than expected. Some major examples include:

• Detection of zero ground faults. The AMI can detect a loss of ground connection, and resulting higher voltages in the network, which increases safety for customers and personnel.
• Reduced customer complaints. The presentation of daily or hourly consumption data to customers has improved the customer service experience with increased transparency
• Reduced costs from remote connect/disconnect switching. Sites without electricity contracts, such as empty apartments or overdue accounts, can be disconnected efficiently to minimize risk and customer costs.
• Power outage compensation. Customers no longer need to call in to report an outage, meter data also ensures that customers are compensated correctly.
• Low Voltage (LV) network quality monitoring. Quality monitoring ensures that customer power quality aligns with the regulation. This increased customer service commitment relies heavily on accurate network documentation.

 

Next Steps – The Proactive Forum

Swedenergy, the power industry and special interest organisation for companies involved in the supply of electricity in Sweden, has worked out recommendations for requirements on AMI. The work is a result of a working group named Proactive Forum. In brief, the recommendation is to keep the meter simple. This means, for example, that utility signals or communication with the customer will not rely on specific meter functionality. Instead, internet or other protocols through various media such as wireless networks may be used as input for customer participation in demand response.

In order to enable the customer to receive high resolution data at or near real time, it is recommended that customers connect data output from the meter locally using a standard port. This design along with customer data access supports will strengthen the customer position while at the same time avoiding unnecessary investments in data processing and transfer between the network company and the network user. A schematic presentation is given in Figure 13.network company and the network user. A schematic presentation is given in Figure 13.

Figure 13 : Schematic presentation of Swedish recommended division of responsibilities for services related to smart metering and customer participation in demand flexibility

 

Key Directives, Legislation and Further Resources

Directive 2009/28/EG of the European Parliament and of the Council, on the promotion of the use of energy from renewable sources

Directive 2009/28/EG of the European Parliament and of the Council, concerning common rules for the internal market in electricity

Swedish government bill 2009/10 : 113, Effektreserven i framtiden

Proactive Forum website:  http://www.svenskenergi.se/sv/Kompetens/webbshop/Gratisprodukter/Elaret/Proaktivt-forum-for-Elmatare/

Technical codes and standards work:
IEC 62056-21 ELECTRICITY METERING ? DATA EXCHANGE FOR METER READING, TARIFF AND LOAD CONTROL ? Part 21: Direct
local data exchange; Amendment A
: Mode D DFI interface with OBIS codes
http://www.iec.ch/cgi-bin/restricted/getfile.pl/13_1518e_NP.pdf dir=13&format=pdf&type=_NP&file=1518e.pdf

 

Sweden’s Electricity Grid Policy

Swedish Electricity Grid Policy has been formed out of a combination of regulation and government targets. The European Union’s 20-20-20 targets in 2008 became part of that policy and set targets for decreased GHGs, increased renewable generation and energy efficiency that guided the larger policy objectives for AMM systems in Sweden. There are four general goals for the Swedish energy system pushing the development in the electricity grid:

• Objective to Reach at Least 50 % Renewable Energy as a Share of Total Energy Use by 2020
• Objective to Reach 20 % more Efficient Energy Use by 2020 requiring Increased Consumer- Engagement ? Spatial Planning Target for Increased Wind Power from 4.5 TWh (2010) to 30 TWh by 2020
• By 2030, Sweden should have a vehicle stock that is independent of fossil fuels

In 2012 the government launched a Smart Grid Council made up of representatives from agencies, government, utilities and the private sector, who are currently investigating different strategies for smart grid in Sweden.

※ Information in this case was provided by the Swedish Energy Agency, the Association of Swedish Electric Utilities, Swedenergy and from Vattenfall.