Chinese Smart Electricity Meter Market
December 9, 2011
As part of the research process for the recently published study The World Market for Smart Electricity Meters – 2011, I, along with my colleagues in Shanghai, interviewed many Chinese electricity meter suppliers, specifically about the current smart meter tenders and plans of the SGC (State Grid Corporation). As is widely known amongst smart meters suppliers and market observers, the SGC announced in late 2009 its plan to roll out smart electricity meters to all of its 300 million endpoints. Up to this point, many suppliers, analysts and other media assumed this 300 million unit shipment number and used it in consolidated global smart meters shipment forecasts, however with further research now complete its critical to highlight this isn’t entirely accurate.
First, tenders being awarded to Chinese electricity meter manufacturers include a mixture of two types of meters, either “smart ready meters” or actual two-way functional smart meters. The key distinction is that the “smart ready meters” do not have an integrated communications module, and in turn are not counted as smart two-way meters by IMS Research. In 2010, IMS Research estimates that in China, upwards of 60% of the overall new tenders being awarded were made up of “smart ready” meters, greatly shrinking the perceived shipment numbers of smart two-way meters (meters with all needed hardware to communicate ”time of use”, alternative tariffs, etc.).
Second, it is unclear how these meters will operate in the future. It is entirely possible that when the operating utility is ready to install the network for smart metering, that these operating “smart ready meters” will be upgraded with communications modules added to each one of them in the field. However, it is also known that in the short term many of these meters are installed into apartment buildings in a junction box of sorts, and are all connected using RS-485. This allows for automated billing of each individual flat, with all meters connected down to the junction box, where here one PLC chip is installed on a data concentrator, which communicates all meter data to the utility.
The distinction between “smart ready meters” and smart two-way meters is most important to PLC module suppliers. The current market volume forecast of smart two-way meters (with integrated communication modules) is less than what is publically perceived, by a large amount (see figure at the end of this post).
IMS Research forecasts that from 2010 to 2016 there will be around 150 million cumulative shipments of “smart ready meters” out of a total of about 250 million cumulative shipments of advanced electricity meters; this has the effect of reducing the number of publically perceived smart meter shipments by around 60%. However, it should be noted, that in 2011, the SGC awarded a larger percentage of its electricity meter tender to smart two-way PLC (FSK) meters instead of “smart ready meters”.
At this time, the forecast (2011 to 2016) takes into account the SGC’s shift towards awarding an increased amount of tenders to fully functional smart meters and IMS Research roughly estimates that trend to continue. It should be noted that by 2016, more shipments of PLC enabled smart meters than of “smart ready meters” are expected. What is unknown is how many retrofit PLC modules will be shipped to “smart ready meters” already in the field, a key consideration for suppliers of PLC modules to keep their eye on.
