http://www.businessweek.com/globalbiz/content/nov2009/gb20091116_319929.htm After several false starts, 2010 finally could be the year when smart meters go global. The technology, which lets energy companies and consumers more closely monitor their electricity consumption, has many champions. The U.S. government has earmarked $4.5 billion from the stimulus package to subsidize the rollout of smart meters nationwide. European Union politicians are pushing hard to connect 80% of the region's homes and businesses to smart meters by 2020. Even emerging giants like India and China aim to install the technology in new buildings.
But with billions of dollars on the line, policymakers don't want to make costly mistakes. Many of them are thus eyeing the remarkable experience of Italy, which in less than a decade has become the surprising world leader in the development of a smarter electrical grid. Some 85% of Italian homes are now outfitted with smart meters—the highest percentage in the world and more such devices than exist in the whole of the U.S. Utilities worldwide, such as San Francisco's PG&E (PCG) and Florida's FPL Group (FPL), are eager to learn how Enel pulled off its smart meter revolution.
Back in 2001, Enel (ENEI.MI)—the country's dominant utility—started a five-year program to install smart meters across its customer base of 40 million homes and businesses. "We wanted to improve efficiency, create higher margins, and help customers reduce their energy bills," says Livio Gallo, Enel's director of infrastructure and networks, who oversaw the smart meter rollout. Another motivation, according to outside experts, was to throttle rampant power theft and other forms of fraud.
Time-of-Day Pricing Info
By 2006, Enel had invested $3 billion in the initiative, which included meters of its own design, based on technology from San Jose (Calif.) based Echelon (ELON), that send usage readings automatically to the central office and display time-of-day pricing to customers. The Italian utility can now collect customer data and manage its energy network remotely, instead of sending out costly technicians. And improved data on consumers' electricity habits permit Enel to run its power plants more efficiently. All told, the utility says it is reaping annual cost savings of $750 million from the new technology—allowing it to recoup the infrastructure investment in just four years.
Meanwhile, the introduction of smart meters has given Enel customers greater control over their energy bills. Typically, the meter is installed in a convenient place in the home—say, in a kitchen cupboard or the laundry room. When electricity prices are high, for instance during the peak evening period or on cold winter nights, the smart meter informs household members of higher rates, allowing them to alter their habits (such as postponing a load of laundry until the next morning) to avoid big charges. Analysts figure that attentive Enel customers have been able to cut their bills by as much as one-half by keeping close tabs on energy prices and usage. (more)
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