Europe Advanced Metering Infrastructure Market trends Estimated to Witness High Growth Owing Rapid Urbanization and Smart City Initiatives in Europe
Europe advanced metering infrastructure market is estimated to be valued at US$ 6.84 Bn in 2024, exhibiting CAGR of 9.2% over the forecast period (2024-2031). Advanced Metering Infrastructure supports utilities transition to renewable energy resources and helps in efficient use of energy. Furthermore, AMI provides real-time data on energy usage enabling utilities to offer innovative demand response and dynamic pricing programs to customers.
Market Dynamics:
Europe advanced metering infrastructure market is primarily driven by rapid urbanization and growing smart city initiatives across various European countries. According to the United Nations, Europe is highly urbanized with over 70% of Europe's population living in urban areas. This is prompting governments to focus on modernizing core urban infrastructure with smart grid technology including AMI. For instance, the European Commission aims to have 80-90% of Europe converted into smart cities by 2050. Additionally, stringent regulations regarding carbon emission reductions are forcing utilities to invest in AMI to monitor energy usage patterns. Advanced meters help utilities and consumers optimize energy consumption through time-of-use pricing and demand response programs leading to reduced stress on infrastructure and environment.
Government regulations to reduce carbon emissions driving adoption of AMI
Government regulations across Europe are putting pressure on utilities and energy companies to reduce their carbon footprint and become more sustainable. The European Commission has set ambitious targets to cut greenhouse gas emissions by at least 55% by 2030. Advanced metering infrastructure allows for more efficient energy distribution and consumption monitoring which can help meet these emission reduction goals. AMI provides two-way communication between the utility and smart meters, enabling features like remote disconnect/reconnect, power quality monitoring, and outage notification. This results in less wasted energy and lower operating costs for utilities. Governments are promoting the rollout of smart grids and AMI to modernize aging infrastructure and incentivize the transition to cleaner energy sources.
Rising demand for energy efficiency driving need for demand response programs
As Europe moves towards decarbonization, there is increasing focus on improving energy efficiency to reduce overall consumption. AMI enables utilities to implement sophisticated demand response programs that offer financial incentives to customers to reduce usage during peak periods. This helps shift load away from times of high demand on the grid. With AMI, utilities can centrally control smart appliances and thermostats in customer homes and businesses to lower usage. The ability to better manage peak load reduces the need to run expensive peaking power plants. AMI supports demand response as a cost-effective way for utilities to balance supply and demand while saving customers money on their energy bills through time-of-use rates.
High upfront installation costs a restraint on market growth
A major restraint holding back widespread AMI deployment is the high upfront capital costs involved in installing millions of smart meters across an entire service territory. The meters themselves cost significantly more than traditional analog meters. Then there are additional expenses for the communication network, meter data management software, IT infrastructure upgrades, and labor costs for installation. For many cash-strapped utilities still relying on aging infrastructure, these substantial investments present a major financial burden. There is a long payback period of 5-10 years before cost savings from operational efficiencies are realized. This deters some utilities from fully committing to AMI programs and opting for partial rollouts instead.
Interoperability challenges between different AMI systems
Another key market restraint is the lack of interoperability and standardization between the various AMI systems offered by different vendors. Each vendor has their own proprietary communication protocols, data models, and interfaces that aren't always compatible with other solutions. This “walled garden” approach prevents utilities from easily integrating AMI networks from multiple areas acquired through mergers or readily switching vendors. It leads to vendor lock-in that limits market competition and technology improvements. Addressing interoperability standards has been challenging due to the complexity of smart grid systems and vendors’ reluctance to fully open their platforms. This fragmentation hinders the broader adoption of AMI as utilities want solutions guaranteeing future flexibility and scale.
Growing demand for electric vehicles opening opportunities for vehicle-grid integration
Electric vehicles (EVs) are expected to see huge growth across Europe in the coming decades as countries aim to phase out gas-powered cars. This opens up major opportunities to leverage AMI for vehicle-grid integration (VGI) applications. With smart charging coordinated by two-way communication, EVs can support the grid during periods of high renewable energy output and help manage demand charges for customers. Utilities can use EVs as distributed energy storage assets. VGI allows EV owners to earn money by allowing the grid to discharge their vehicle batteries during emergencies. AMI is needed to facilitate these new revenue streams and grid services from increasingly ubiquitous EVs.
Opportunities in data analytics to optimize grid operations
Advanced metering infrastructure generates troves of granular energy consumption data that utilities previously did not have visibility into. There are significant opportunities for utilities to apply analytics to the petabytes of AMI data and gain invaluable customer and grid insights. Techniques like machine learning and artificial intelligence can analyze patterns in use behavior to improve demand forecasting, asset management, and outage response. MI data can be combined with external datasets on weather, rates, and DERs. It opens doors for new efficiency programs tailored to segments identified through usage profiling. AMI data analytics is a fast-growing application area that helps optimize all aspects of utility grid operations as they digitally transform.
Key Developments:
- In June 2023, Honeywell, a global technology leader specializing in aerospace and building technologies, introduced a new communication network solution for smart meters called the Next Generation Cellular Module (NXCM). This innovative module enables advanced metering infrastructure (AMI) by retrofitting legacy gas and water meters into smart meters, allowing them to connect wirelessly through existing public cellular networks. The NXCM enhances monitoring, safety, and data analytics capabilities for utility providers, significantly improving operational efficiency and reducing costs.
- In March 2023, Landis+Gyr, a leading global provider of integrated energy management solutions, expanded its operations in Eastern Europe to enhance service delivery. This strategic move aims to strengthen the company's presence in key markets and improve support for utilities in the region. The expansion is part of Landis+Gyr's broader initiative to meet the growing demand for smart metering and grid management solutions, driven by the increasing focus on energy efficiency and sustainability. By leveraging its advanced technologies and expertise, Landis+Gyr is poised to offer innovative solutions that help utilities optimize their operations and better serve their customers in Eastern Europe, further solidifying its position as a market leader in the energy sector.
- In September 2022, Schneider Electric, a global specialist in energy management and automation, partnered with a utility provider to deploy advanced metering infrastructure (AMI) in several European cities. This collaboration aims to enhance the efficiency and reliability of energy distribution by integrating smart metering technologies that provide real-time data and analytics. The deployment of AMI will enable utilities to optimize their operations, improve customer engagement, and facilitate better energy management practices.
- In February 2021, Siemens, a global leader in digital industries and smart infrastructure, launched a new smart meter equipped with enhanced data analytics features. This innovative meter is designed to provide utilities with advanced capabilities for monitoring energy consumption and optimizing grid management. By leveraging sophisticated data analytics, the smart meter enables utilities to gain real-time insights into usage patterns, identify inefficiencies, and improve operational decision-making.
Key Player:
Siemens AG, Schneider Electric SE, Itron, Inc., Landis+Gyr, Honeywell International Inc., Sensus (Xylem Inc.), Elster Group GmbH, Kamstrup A/S, ABB Ltd., Iskraemeco d.d., Aclara Technologies LLC, Echelon Corporation, Wasion Group Holdings Ltd., Diehl Metering GmbH, and Invensys
