Smart Meter Rollouts and Data Exchange Standards: A New Analysis by IDC

Guest Blogger: Jean-François Segalotto, Senior Associate Advisor, IDC Energy Insights

Over the course of 2023, IDC carried out a global analysis of smart electricity metering to better understand uptake of data exchange standards. Supported by the DLMS User Association, the work combines IDC’s industry expertise with extensive new research and interviews conducted with domain experts from technology vendors, standard-setting organizations, and grid operators around the globe.

The analysis is aimed at understanding the technology orientation of regional standard-setting organizations, local regulators, and network operators regarding smart metering standards, at a critical juncture for electricity systems around the world. In particular, the work sought to understand the penetration of metering standards with a focus on the DLMS/ COSEM standard suite (IEC 62056, EN 13757-1, ANSI C12-62056 Suite) — an international standard for utility meter data exchange. Part of the research was also directed at understanding the drivers for selecting a particular smart meter data exchange standard today, and the expectations for supported applications in the medium term.

The Growing Importance of Open Interoperable Standards at the Grid’s Edge

It is crucial to draw a clear distinction between communication standards and data exchange standards. Communication standards define the technologies and protocols for transmitting information between devices, and extensive research has addressed the evolution of the diverse communication ecosystem used in smart metering deployments. Data exchange standards, on the other hand, focus on the format and structure of the data being shared. The distinction is of key importance, and this analysis represents an initial step in our understanding of the penetration of open data exchange standards for grid-edge applications.

There are several reasons why IDC believes the selection of interoperable smart metering technology will be increasingly relevant as energy systems around the world decarbonize and electrify.

1. Energy transition. We are at a crucial juncture in the evolution of energy systems, where the rapidly accelerating penetration of renewables and new electrical loads demand that consumers become active market participants. This is putting more emphasis on utilities’ grid-edge capabilities than ever before.
2. New-generation metering. Modern metering technologies enable utilities to go beyond the typical “meter-to-cash” and loss-reduction use cases of first-generation smart metering. They open the door to secure behind-the-meter applications, from dynamic tariffs to active demand management, load shifting, and behind-the-meter optimization. Stationary batteries, EV boxes, heat pumps, smart inverters, smart appliances, and building energy management systems are but a few examples of the expanding ecosystem of energy devices that need to be orchestrated and hence must be able to “talk” to a smart meter.
3. Technology convergence. A growing number of alternative Internet of Things (IoT) and energy technologies are converging towards international standards to facilitate interoperability in an ecosystem that is becoming more complex, both in front of and behind the meter. DLMS provides application extensibility via a structured environment for modeling and data exchange that is agnostic in terms of the device type, energy vector, and communication medium. This simplifies integration, enables seamless communication, and allows future needs to be addressed, while meeting emerging security and efficiency requirements.
4. Rapid time-to-market for meter deployments. Open, international meter data exchange standards also can offer a first-time-right approach for distributors, which can leverage years of experience in real-world rollouts across communication technologies, network topologies, and market models.
5. Critical mass for device manufacturers. The generic DLMS companion profiles that will be released in the next quarters for new applications can provide a fast route to market and much-needed critical mass for technology vendors and device OEMs across the energy spectrum.

Preparing a Future-Proof Metering Standard

The following insights are based on IDC’s interviews with two dozen experts from technology vendors, grid operators, grid solutions and service providers, and standard-setting organizations across the world designed to understand demand-side factors related to meter data exchange standards and broader smart electricity metering deployment trends.

This segment of the research found that the number-one driver for selecting a meter data exchange standard today, for more than 80% of utilities and almost 70% of meter vendors and solutions providers surveyed by IDC, is the level of openness and interoperability, which transcends the mere notion of compliance or compatibility. The variety of communication technologies and profiles supported and the strength of the data security and privacy model are also critical drivers for a large proportion of industry participants (around 60% across both utilities and technology vendors). The degree of field adoption by electricity distribution companies and variety of standardized applications and use-case extensibility round out the top 5 drivers among market participants surveyed.

IDC also asked what applications utilities and their technology providers would expect a modern smart meter data exchange standard to support in five years’ time, beyond meter-to-cash. The top  answers included support for multi-tariffs/dynamic tariffs and demand response and load management, mentioned by over 64% of respondents, while power quality monitoring and outage management rounded out the top 3 at around 50% of respondents.

The State of Play: Global and Regional Headline Results

Globally, IDC estimates that more than 1,110 million smart electricity meters had been deployed as of end-2022, 63% of which leverage the DLMS/COSEM standard (excluding China), or 26% including China, in the application layer of the technology stack, either in the international codification or a localized companion standard. 

Europe is the birthplace of DLMS/COSEM and home to a large ecosystem of standard-setting organizations, technology providers, regulators, and large utilities that have built on it, particularly on the back of the EU’s Mandate M441 for smart meters of 2009 — the IDIS Association, G3-PLC, PRIME Alliance and the Dutch Smart Meter Requirements (DSMR) are but a few examples. IDC estimates that as many as 82% of 170 million smart electricity meters deployed in Europe at the end of 2022 are compliant with DLMS/COSEM, making it the largest market in the world for open international smart meter data exchange standards by a wide margin. 

North America, home to ANSI C12.22 (the world’s most popular smart metering standard with DLMS/COSEM), is the most advanced smart metering region in the world, with an estimated penetration of 76% of electricity metering points, as of end-2022. While North American utilities have typically followed ANSI (and Measurement Canada) technical rules or used proprietary solutions in large, single-vendor deployments, IDC estimates that between 36% and 47% of 134 million advanced metering infrastructure (AMI) endpoints deployed at the end of 2022 used DLMS/COSEM. IDC expects the market share of DLMS to progressively expand with the integration of IEC 62056 into ANSI C12.22 and second-generation smart meter rollouts.

Latin America and the Caribbean, a smart metering market that is expected to boom in the next decade, is being influenced by both European and U.S. technologies. The former are largely promoted by Southern European utilities (e.g., Enel, Iberdrola, EDP, EDF) that have entered the Latin American market as distributors or integrators and are deploying homegrown technologies, including those based on DLMS/COSEM. The latter are driven by North American meter vendors that have established production capacity in Latin America and their local counterparts that have served ANSI markets for the past several years. In the region, mass-market rollouts have only made progress in a handful of major markets, while many distributors are still weighing their technology options. Additionally, a number of regulators have opted for market-led deployments as opposed to mandated rollouts, leaving a certain degree of flexibility to electricity distributors when it comes to standards selection. Out of more than 16 million smart electricity meters deployed so far in the region, IDC estimates about half use DLMS/COSEM.

The situation looks different in Asia-Pacific, by far the world’s largest smart metering region. China is not considered by most observers as a DLMS/COSEM market, although things will likely change before it moves to deploying its second wave of smart electricity meters. Japan, where distributors have selected their own first-generation technology autonomously, has also been recently working on a new common nationwide smart meter specification ahead of starting its second-generation rollout in the mid-2020s. Among the other large frontrunners in the region, South Korea and Saudi Arabia have opted for full-scale DLMS-based deployments. Similarly, a number of emerging markets in South and Southeast Asia (most notably India, Malaysia, and Thailand) have adopted smart metering technologies that rely on international standards, including DLMS/COSEM. Overall, DLMS/COSEM accounts for an estimated 11% of approximately 793 million smart electricity meters deployed as of end-2022 in Asia-Pacific; when China is excluded, the share of DLMS/COSEM reaches 60%.

Finally, Africa is only taking its first steps into smart metering. Deployed smart meters run in the low single-digit millions, with pilots and selective rollouts being realized thanks to funding by international lenders. The African Electrotechnical Standardization Commission (AFSEC) has developed a guide to smart metering deployments in the continent that relies heavily on IEC standards. It is also finalizing a draft smart metering system standard, the bulk of which is based on South Africa’s NRS 049, a DLMS/COSEM-compatible technical specification. IDC estimates that 80% of Africa’s 5 million smart electricity meters are DLMS compliant.