UK utilities are encouraging more consumers to get water meters fitted. But, argues Tom Fryers, commercial director of Sentec, investing in standard mechanical meters at a time when smart metering technology is available is a wasted opportunity. Here he outlines the benefits of smart metering for water.
What is the most valuable liquid on earth? Vintage Taittinger? Sweet crude? No. Right now it’s printer ink, which ounce for ounce costs more than gold.
It’s not the first time that circumstantial alchemy has transformed a staple item into something more precious than gold. A quick tour round mercantile history shows us salt, spices, tulip bulbs and blue paint have all beaten the gold-standard at some point.
The problem that we face right now, is that water is becoming one of those commonplace substances that attains incredible value. And unlike paint or bulbs, it is unlikely to be a passing fad or over-heated bubble.
Climate change is changing our relationship with the wet stuff. Predicted shortages of clean, healthy, potable water could turn soft and gentle H2O into one of the most politically volatile substances around.
The onus is on water companies, their customers, industry regulators and politicians to ensure that water is viewed, consumed and managed as a limited resource: over consumption and systemic waste both need to be addressed.
But that’s when we hit the first problem. Water is an emotive issue. In the developed world at least, we believe we have an inalienable right to unlimited amounts of water. We protest when our access is restricted. We blame utility companies for leaking pipes, rather than looking at our own wastefulness.
Which is why the water industry is seeing a move towards metering in general, and smart metering in particular. Based on the premise that you cannot manage what you cannot measure, smart metering supply is the obvious solution to the flat-rated water tariffs, which do not distinguish between profligacy and parsimony.
Powering ahead
The model, of course is the electricity industry, where in the UK, a nationwide smart metering programme has just been mandated by the government. The drivers behind the acceleration of advanced metering penetration are similar to those faced by the water industry: a desire to manage resources, to encourage positive consumer behaviour, to control operational costs and to support redirection of investment into more climate-friendly activity.
In theory, the principles are the same for water supply. By providing real-time information on usage, the meter provides signals that should encourage alternative behaviour. If customers can see how much money or carbon it costs to clean the car then they might think twice about getting the turtle wax out every Sunday.
However, there are important differences between the water industry and the electricity sector, which mean that the business model for smart metering energy cannot simply be grafted onto water. Water costs less than electricity, and a significant proportion of each bill consists of the costs of waste and sewage dispersal and a contribution to the cost of transporting it to consumers. Those consumers are only likely to see small changes on their bill, which makes it a far less powerful price signal than that seen in electricity smart metering.
Which is why the drive towards smart metering in countries like the US and Australia that have seen the highest levels of penetration, is fuelled by the need to secure supply, avoid waste within the network, and the utilities’ own desire for cost control rather than the ability to alter consumer behaviours.
It is at this point that smart metering begins to sound like an attractive business proposition to water companies and their shareholders.
Reducing costs, reducing waste
Unlike traditional meters, which are rather crude instruments for assessing potential leaks, smart meters give water utilities a much more precise tool for identifying potential problems, both upstream and downstream of the meter. With a mechanical meter, the first indicator of a crack in the pipe between a residential meter and a house is when an eye-watering quarterly bill for a cubic kilometre of water arrives. If the crack is within the home, it’s usually when the pipe bursts and the ceiling collapses. However, a smart meter, with its regular updates and alerts, helps consumers and water utilities spot the difference between genuine consumption and a potential problem.
These leak detection capabilities are greatly enhanced if the meter has the capacity to measure extremely low flow rates. Standard mechanical meters cannot measure flow below around four litres per hour. A drip in the cistern could thus lose up to 96 litres of water every day without detection – equivalent to a cubic meter over the space of 10 days.
A smart metering system can also identify leaks in the network by adding up the consumption of all the homes in a discrete area – a district metering area or DMA – over a given time period and subtracting it from the consumption measured at a bigger meter further back in the network over the same period. The difference between the numbers is the network leakage. The more accurate the meters, the more accurately leaks can be identified.
The move to advanced metering also offers the possibility of developing and applying flexible tariffs. Although the specific functionality is still in a nascent stage it has the potential to give suppliers an alternative way to manage customers and their consumption – through their bills. And once a metrology platform has been developed it becomes quite straightforward to implement multi-tariffing on top, so long as that platform is truly smart, with the ability to manage two way communication.
Customers can then enter into specific payment plans – just as they do with mobile phones – that most closely match their usage patterns. A family with young children can choose a plan that offers them cheaper water during the day when the washing machine is regularly used, but charges a premium for using a sprinkler in the garden.
The tariff can also be altered as availability changes, becoming more expensive during periods of shortage. The beauty of smart meters is that all this can be done remotely, which cuts the costs of customer visits. It also ensures that as families and individuals move their chosen price plan can go with them, and no-one gets stuck with the cost of the previous inhabitant’s bad habits. That opens up huge opportunities for developing newly sophisticated relationships with customers, enabling water companies to offer innovative service plans, exciting new appliances and water saving expertise as part of the package.
As electricity suppliers are coming to understand, flexible tariffs can also help shift demand. In the case of water supply, this is likely to reduce the need for water to be pumped during peak hours. A cubic meter of water weighs one tonne, and the electricity required to move it when gravity feeds are insufficient is one of the biggest costs in supplying water – particularly if peak periods for energy coincide with peak periods for water. Indeed, in the UK, the biggest single bill a water company faces is for electricity used in pumping.
A sea change for water
There are a myriad ways in which smart metering can help reduce costs. Detailed information on usage patterns can inform infrastructure planning for new developments, ensuring targeted and accurate investment. The right system, based on low-maintenance meters with a fifteen year lifecycle, can minimise both opex and capex.
These are the advantages that we know about. But the point of smart metering is that it is still in its infancy. All sorts of benefits that have not yet been envisaged are possible, provided the technology is implemented with a firm eye on the future. Australia’s plans for integrating water meters with energy displays to create a single desirable gadget has already demonstrated that there are endless possibilities for combining the innovation seen in consumer electronics with the raw data provided by metrology platforms.
Of course, smart metering cannot transform the water industry by itself. The regulatory environment has to be right to encourage initial investment, and smart meters will not win over the sceptics among members of the public without strenuous education campaigns.
We must also remember that it is not always financially advantageous or indeed practical to install a smart meter. Even if a leak is discovered, the value of the water being lost might not justify the cost of repair. In apartment blocks, it may be difficult to install meters for individual apartments. Such problems are not easily overcome, but they would be a poor excuse for doing nothing.
But despite all this, the fact remains that smart metering is the best chance we have of developing robust water supply infrastructures, keeping costs to consumers and suppliers under control, and managing equitable distribution of the Earth’s most essential resource. If we’re going to invest in metering – we should at least make it smart.
The Wizard of Oz: advanced metering in Australia
Australia, where water shortages are becoming more and more severe, is probably the most advanced nation in terms of thinking about smart water metering. It already has a widespread estate of smart electricity meters, and there are plans to ‘piggy back’ smart water metering on the top of them. In Victoria for example, the smart electricity meters that are being rolled out also provide a home area network, based on the ZigBee protocol. But that home area network will be open for other devices to use, including the water meter. The water meter will generate information and send it to the electricity meter, from where it will be relayed on to the energy display unit. The energy display unit thus becomes a multi-functional, desirable piece of consumer gadgetry in its own right, and a valuable incentive to entice consumers.
According the latest figures from ABS Research, in 2008 there were 767 million utility or billing water meters in the world, compared to 1,698 million electricity meters. Annual demand in 2009 is expected to be 87 million meters, which breaks down as 74 million billing meters and 13 million submeters. Following a plateau in 2009 caused by the collapse in the construction sector in the US, Spain and China, the market is expected to show an upturn in 2010 with growth of 3.9 percent for the next three years to reach a demand of 98 million meters in 2012.
This story was published on Friday 17th September 2010
