North American Automatic Meter Reading Markets

Abstract

PLC and New Fixed RF AMR Solutions Experience Market Growth

Power line carrier (PLC) and new fixed radio frequency (RF) automatic meter reading (AMR) solutions are attracting the attention and investment dollars of utilities in the power as well as the gas and water markets. Utilities are keen to consider new AMR solutions that not only support time-of-use and/or critical peak pricing but are also less expensive than the earlier fixed RF AMR solutions.

This Frost & Sullivan research segments the North American AMR market into advanced metering AMR and basic AMR based on the capability of the solution to provide interval usage data. The study provides two forecasts for the electric AMR market, one assuming the current economic outlook and the other assuming a more optimistic outlook.

Electric Industry Turmoil Spurs Utilities to Increase Operational Efficiencies

"New market drivers have emerged as a result of the need for utilities and end-use customers to avoid the risks associated with the restructuring of the electric market," says the author of the study. Hourly data from the advanced metering AMR solution can provide utilities with data to support retail rates that send a strong price signal to customers to reduce usage during periods of relatively high wholesale energy prices. This will help utilities mitigate the volume and price risks created by the restructuring of the energy market.

The elevated interest in interval usage data for the small end-use customers and the emergence of new AMR technologies that are reliable and less expensive should spur market growth in advanced metering AMR solutions. However, the industry turmoil can limit market growth as a result of the financial difficulties facing many investor owned electric utilities. They are not in a position to invest in AMR due to losses incurred by wholesale energy trading, and worsened by the decline in the volume of trade.

Economic Outlook and New Products Impact Revenue Growth Potential

Projected revenue growth for advanced metering AMR is strongly dependent on the assumed economic outlook. Under the current economic outlook, utilities are expected to settle for basic AMR. If conditions are more favorable to capital investment by utilities, as assumed in the optimistic outlook, utilities are expected to favor advanced AMR.