The Business Case for Becoming a 100% Digital Utility Faster

Cost Savings, Compliance, Customer Service Benefits + More

100% DIGITAL: THE BENEFIT TO UTILITIES

Utilities face significant pressures, generated by climate change, increases in population and ageing infrastructure.

Failing to innovate or to address these risk factors is a risk in itself – not only to the economic performance of the utility, but its obligations to customers, employees and regulators.

“Many utilities see the digital revolution as a threat to their business model, but massive opportunities await those able to transform themselves ahead of the curve.”

In 2016, Smart Meters (SMs) were mandated by Australia’s Federal Government11. Since, just 24% of electricity meters have been digitised.

At this rate, it will be 2040 before Australia’s National Energy Market (NEM) is digitised at a cost of $2.48 Billion. This represents 18+ years of lost data, and missed opportunity to enact carbon reduction targets, and significant cost savings for utilities, businesses and households.

The AEMC’s recent Review of the Regulatory Framework for Metering Services, published in late 2022, recommends significant reform of the SM program to achieve 100% digitisation faster. According to the AEMC, by accelerating digitisation of the NEM, utilities will reap a Net Benefit of $500 Million. These financial gains are attributed to just three business benefits:

  1. Reduced meter reading costs
  2. The ability to introduce tariff pricing
  3. Faster detection and restoration of interruption to service
 

It’s worth noting this cost-benefit analysis factors in a cost of $120.8M to accelerate the SM rollout. Further, “19 other contingent (but difficult to quantify) benefits are possible”, but were not quantified in the AEMC’s report.

Not only are there financial benefits attributed to 100% digitisation of utilities. 100% digitisation of utility metering infrastructure is recommended by the AEMC and similar bodies in Australia and overseas due to a raft of issues related to analogue metering infrastructure. Issues include a lack of visibility into consumption, billing errors, and undetected energy theft or water leaks. Once digitised, the digital utility and water, gas and electricity consumers share over 75 documented benefits, including:

  • 20-30% operational efficiencies
  • Low-cost tariffs, including solar sponging tariffs
  • Improved knowledge of customers and assets
  • Improved demand and reserves forecasting via analytics
  • Detailed customer data portals for single and complex properties
  • Higher frequency billing cycles to improve cash flow

THE DIGITISATION CHALLENGE FOR UTILITIES

While the documented business benefits of digitisation are compelling, and government mandates for SMs exist, the time and cost to administer a digitisation program is significant for the utility. The cost to digitise the NEM with SMs is currently $2.48Bn.

AEMC’s report estimates the additional cost for the energy sector to accelerate the rollout across the NEM to be $120.8M in the next eight years.

Evidenced by the low uptake of SMs in Australia and abroad, and war stories like Victoria’s bungled Advanced Metering Infrastructure (AIM) program, Utilities must consider less risky, more cost efficient and effective digitisation solutions.

Indeed, the AEMC’s call for reform also includes a review of complimentary digitisation solutions like SNAPI. “Smart meters will be just one source of services and data across the distribution network to deliver the benefits of the future grid. From Draft Report to Final Report, the Commission would like to continue an open engagement on what the future grid could and ideally should look like concerning ‘all of the above’ devices — not either/or”.

ACHIEVING 100% DIGITAL SOONER

When compared with alternative digitisation models and methods, SNAPI is a faster, greener and more accurate option. Our solution isn’t only 99.9% accurate, it works, universally across all meter types and comes at a lower cost than alternatives. Our Meter Reading as a Service model not only smooths our Annual Recurring Revenue (ARR) but makes SNAPI an attractive op-ex expense when compared with alternatives.

Only SNAPI can fit universally to any analogue utility meter in less than 10 seconds to routinely read remotely and digitally with accuracy of 99.9%.

By eliminating the time, cost and complexity of alternative digitisation methods, SNAPI finally empowers digitisation at scale for utilities. Only digitisation at scale is capable of satisfying the utility’s desire for data-driven insights and decision support that will unlock further efficiencies. Only SNAPI can currently help the utility achieve the critical mass required to deliver flexible pricing tariffs that motivate changes in consumer behaviour required to reduce global warming without risking significant investments in time and money.

Time is critical. The world is currently at a critical point in the battle against climate change; within just 7 years, we must reduce carbon emissions by more than 40% to satisfy Paris Agreement targets, and reverse the impact of climate change to preserve life as we know it.

Meanwhile, the AEMC’s 2022 Metering Services Report modelling demonstrates the faster the utility reaches 100% digitisation, the sooner cost savings are realised by the customer and supplier and accrue, year on year.

By replacing manual processes with SNAPI’s MRaaS model, utilities are empowered to reallocate manual meter reading costs to a rapid digitisation strategy with SNAPI. In the energy sector, SNAPI will complement Australia’s mandated Smart Meter rollout, with aim to digitise the National Electricity Market (NEM) by 2025 – between 5 – 13 years faster than current smart meter strategies while Smart Meters are implemented.

Similarly, in the Water Sector, SNAPI provides a pragmatic, reliable and cost-effective way to digitise water utilities. With more consumption data and monitoring capabilities, Australian households, businesses and utilities can improve conservation of our most precious resource and reduce carbon emissions related to ‘water energy’ – heating and moving water.