Who said dragon’s can’t dance? 3

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A success story on european smart meters, developed and produced in China
PART 3 of 3 by Alex Bouw, Jan Oost and Stephan Gibiino

SMART METERS IN THE NETHERLANDS – DSOs ARE LEADING THE WAY

The Dutch DSOs are well prepared for the introduction of smart meters. They undertook major smart metering pilots in the late 2000s and have spent several years developing system solutions to support advanced data applications. During 2012, installations of smart meters were started on a small scale in replacements and new constructions to gain experience for the upcoming large scale replacements. Smart meters have been offered to consumers for many years by energy retailers to enable flexible tariffs. The alternative energy retailer Oxxio, since 2011 part of Eneco, has provided over 200,000 smart meters using GPRS as the communication technology of choice. IBM has led this program and provided an end-to-end service. Now, the revised Dutch Electricity Act and the Gas Act, that was accepted in 2011 in the House of Parliament and came into law in 2012, obliges DSOs (as owners of the meters) to offer all households a smart meter.

Households still have a choice in accepting a smart meter with full functionality, having no smart meter at all or to make the choice to have a smart meter but not to provide interval data to the DSO (and consequently a service provider of choice). The DSOs need explicit customer acceptance. With the revised Act, energy retailers or suppliers have to provide customers with bi-monthly consumption and cost statements. More detailed energy insight services for households, provided that it is ensured that individual measurement data is only used for the specific purposes, are considered a market responsibility that supports the overall business case for smart metering.

In 2009, the initially proposed mandated introduction of smart meters was not approved by the Dutch Senate and the original proposal had to be changed to allow a voluntary rollout. As a result of that development, the Ministry of Economic Affairs instructed KEMA to perform a revised cost-benefit analysis and recalculate the consequences of the changed circumstances with respect to the business case for the introduction of smart meters in The Netherlands. Quoting Berg Insight, there are three major differences that prompted the new analysis:

1. The smart meter will only be read once every two months in the standard situation
2. The customer will have the option of refusing the smart meter, or can have the smart meter treated like a traditional meter by registering it as ‘administrative off’
3. The need to get an understanding of the possible measures the

Dutch government could take to influence the social costs and benefits in the desired direction. Now, an updated and positive business case is still expected of approximately € 770 million, considering that almost 100% of the households will accept the smart meter (with almost 100% standard readings). The benefits considered are first and mainly energy savings, secondly savings on call centre costs, and lastly lower cost for executing the market mechanisms like customer switching, moving and saving meter reading costs. As a consequence, the rollout of smart meters in the Netherlands will continue with a small scale rollout from 2013 until 2014/2015. Mostly regular meter replacements or new house installations or renovations will be addressed in this phase to get experience for the mass rollout. This mass or large scale rollout aims to get a smart meter in at least 80% of households.

THE ROLE OF NETBEHEER NEDERLAND

In order to support the small and large scale rollouts more effectively, the DSOs have joined forces by cooperating under the Netbeheer Nederland umbrella. Netbeheer Nederland promotes a dialogue with government and market parties about the contribution that DSOs can make to the transition to a sustainable energy system. It consults with the Office of Energy Regulation (ACM) about how gas and electricity supply can be maintained and extended at socially responsible and efficient levels with security of supply and safety in mind.

One of its project groups, ‘Uitrol Slimme Meters’, coordinates activities for the national smart meter rollout. Within the program the Smart Buying project is responsible for the selection of the preferred suppliers, as described in the introduction.

With the ambition ‘Smart Buying = Smart Delivering’, the Smart Buying program executed an extensive preferred supplier selection process. The initial pre-qualification result was audited by Netbeheer Netherlands in 2011, including a factory visit at Shenzhen Kaifa Technology Co., Ltd. After the final decision by Netbeheer Netherlands to select IBM-Kaifa as one of the preferred suppliers, the development-test project and contract negotiations started. Due to requirements discussions and complex interoperability tests the development and test project was more time consuming than expected. Although contractually all was agreed in 2012, final product release was only given in 2013. Since then the production is up to speed and first deliveries have been planned from September 2013. By having the newly released meters available in the Dutch warehouses for rollout, Dutch DSOs can fulfil their obligations of starting rolling out of the latest DSMR4 meters in The Netherlands from 2013.

THE IBM-KAIFA COOPERATION

As one of the preferred suppliers for Netbeheer Nederland, IBM works closely with Shenzhen Kaifa , founded in 1985 and operating the Metering Division since 1995. Kaifa operates various other divisions, and thus has profound experience in e.g. storage products and microelectronic s products. Until now Kaifa has shipped over 22 million smart meters to Europe, 8 million anti-tampering meters to Asia and provided several million meters for China´s enormous domestic market. For 2011 Kaifa was ranked 7th of MMI Top50 EMS Providers. Since 1994 it has been a stock company, the number of employees increased to beyond 17,000 and today is in 10 locations worldwide: China, Hong Kong, Australia, Singapore, UAE/Dubai, USA, UK and Italy. In 2012 its sales revenue exceeded $2.64 billion.

In 2004, IBM Global Business Services and Technology Services and one of the biggest European utilities entered into an alliance in the area of advanced metering management (AMM)/advanced metering infrastructure (AMI). Since then, IBM has delivered, together with its mainframe and software solutions, more than 2 million PLC and GPRS smart electricity meters for almost 30 European projects (for example to Enemalta, WSC Malta, Oxxio The Netherlands, A2A Brescia Italy, etc.).

The metering hardware is sourced, procured and quality controlled by an IBM Smart Energy Technology Procurement Centre of Competence (CoC) that was built up in Mainz, Germany at the same time IBM stepped into this alliance. This Procurement CoC is engaged whenever such metering hardware is needed to be procured, and it then manages all necessary procurement and supply chain management activities.

When the Procurement CoC started sourcing activities in 2004, Shenzhen Kaifa Technology Co., Ltd, headquartered in Shenzhen, China and part subsidiary of China’s giant Great Wall Technology Co., Ltd, already had a long history of collaboration with IBM especially in the area of storage hardware. Many years of manufacturing experience with the e-meter technology needed by IBM at their start into the first European AMM/AMI engagements in 2004, made Kaifa a perfect fit for cooperation in this area. Now, after almost 10 years of excellent win-win collaboration in the smart metering hardware business, it is no surprise that Kaifa was chosen by IBM as an early development partner and supplier of the final products for this project.

YES, the Dragon can dance!

(End – part 3 of 3)