Smart meters are booming, and more smart meters means a lot more data. Utilities need to be able to handle and process all this data to deliver value for themselves and their customers.
Smart meters provide consumers with near real time information on their usage patterns, allowing them to better manage their energy use, saving themselves money and reducing emissions. Smart meters also remove the need for someone to visit your house to read the meter and they bring an end to estimated billing.
It’s no surprise therefore that the number of smart meters in the world is booming. At the end of 2016 there were over 700 million smart meters installed globally, with strong growth set to continue. Planned rollouts include the UK (26 million by 2020), Germany (44 million by 2026) and Japan (27 million by 2020) as well as plans for smart meters in emerging economies such as Pakistan and Nigeria.
More smart meters means much more data, and utilities are increasingly asking us at SAP how we can help them to handle all this information and correlate it with meaningful business context. Utilities now have three distinct options for managing their meter data with SAP. Each option is described in detail below.
This post serves as an update to the excellent 2015 post by my colleague Scott Hirst.
1. Three-tier architecture
This is the traditional and most widely adopted approach, with over 120 utilities choosing this option. SAP is the master of the customer data and connects to an external Meter Data Management System (MDMS) such as Itron IEE, which connects to the Head End System. Interval data is mastered in the MDMS and for billing and other purposes (such as analytics) a copy of the meter data can be stored in SAP, or billing determinants can be requested from the MDMS at runtime.
This option has been refined recently with the announcement earlier this year that SAP and Siemens have signed a global reseller agreement through which SAP will resell Siemens’ market-leading meter data management solution, EnergyIP. It will be known as SAP Meter Data Management by Siemens and being available direct from SAP will simplify purchasing and support processes for customers, who will only have to liaise with one vendor.
The Gartner Magic Quadrant for Meter Data Management Products has rated Siemens EnergyIP as the market leader for the last three years straight. This is therefore a good option for utilities that want a comprehensive MDMS capability with all the trimmings.
2. Two-tier architecture
Feedback from customers indicated that the cost and complexity of the three-tier architecture was sometimes too high. In addition, the increasing capabilities of Head End Systems and SAP Energy Data Management led to overlap with MDM solutions and some business processes needed all the meter data to be in SAP anyway. The two-tier architecture was therefore born, pioneered by AGL Active Stream in Australia in 2015 and being implemented and considered across the utilities world from the Americas to Europe to Asia.
In this approach, SAP connects directly to a Head End System, using the same AMI Enterprise Services that are employed in the three-tier architecture. SAP is now the master of the meter data as well as the customer data and having the meter data in SAP can simplify analytics, customer insights and product design processes to name a few.
In this option there are two areas that generally require effort during the implementation.
- Connectivity – the Head End System vendor will be asked to build an adaptor capable of consuming the SAP AMI Enterprise Services (if they don’t already have one).
- VEE (Validation, Estimation and Editing) – while a number of sample algorithms are provided out of the box, country-specific requirements may necessitate enhancements to these using the framework provided within SAP Energy Data Management.
However, this approach still offers the lowest TCO, simplification of the utility’s IT landscape and removes the need for staff with skills in the MDMS. This is therefore the approach for utilities looking for the simplest and lowest cost option.
3. Cloud for Energy
SAP is developing a new public cloud solution Cloud for Energy that is based on the SAP Cloud Platform. As well as native integration back to SAP S/4HANA (including IS-U) it will feature APIs for integration to Head End Systems as well as meters, sensors and other “things” based on the CIM standard (IEC 61968-9). This IoT data model means it can collect data directly from the assets.
Big data is handled on the platform in real time, providing a base to develop new energy business models. The broader integration supports the longer term vision for Cloud for Energy as much more than just a meter data management system. It can be the central data lake for the utility’s technical systems (OMS, DRMS, etc.) where OT data is stored and correlated with IT data from the S/4HANA system.
Analytics is provided by the Energy Analysis application that will run on the Cloud for Energy platform. With use cases including aggregation, benchmarking, consumption pattern determination, peak load determination and forecasting, it will allow energy data to be sliced and diced based on business parameters. There is also an API that enables the analytics results to be made available both for internal consumption (such as data scientists) and to external consumers such as customer engagement apps.
Cloud for Energy is at the centre of SAP’s cloud strategy in utilities and will include a comprehensive roadmap for future innovations. It is expected to be delivered in 2018. In the meantime, interested customers are invited to participate in the co-innovation program providing them a chance to influence the features and direction of the product.
Which of the three options outlined above best fits will depend on your priorities:
- For a mature, on premise MDMS solution with all the bells and whistles go for SAP Meter Data Management by Siemens.
- For the lowest cost option and simplest IT landscape go with the two-tier architecture.
- For a cloud solution that aligns with SAP’s future strategy and all the latest technologies to enable new business models, choose Cloud for Energy.
If you have any questions or would like more information, please reach out to me on LinkedIn or at firstname.lastname@example.org.