AMI AND SMART METERING The role of smart meters in a deregulated by Rose Bundock electricity market If a country needs a catalyst to reform its electrical system, then Japan’s was the earthquake that struck the east of the country in March 2011, followed by a 30-metre high tsunami that destabilised the Fukushima Daiichi Nuclear Power Plant. The aftershocks of the natural disaster were felt in the energy sector with Japan’s largest utility Tokyo Electric Power Company (Tepco), manager of the nuclear power plant, hit by major outages followed by insufficient power generation and consequent climbing electricity prices. 32 The fragility of the country‘s electricity system and exposure to energy insecurity prompted Japan‘s government to devise an Energy Liberalisation plan, which kicks off this year. The unbundling of the traditional generation, transmission and distribution structure aims to ensure that electricity can more easily be shared between regions, that regional monopolies are broken keeping prices down, and consumers are encouraged to better understand their energy consumption as well as contribute to the grid as prosumers. The deregulation timetable officially began in April with the creation of a nationwide grid management body. The Organization for Cross-Regional Coordination of Transmission Operators will marry up power supply with demand to ensure a reliable supply in all areas of the country in the event of a future natural disaster. All power suppliers are obliged to join the new body, which also has a remit to promote renewable energy. The full opening up of the retail electricity market will follow in 2016, with regional utilities expected to spin off their power transmission and distribution sections into separate companies by 2020, in the final phase of the reforms. Smart meters Japan’s plan to liberalize the electricity sector positions smart meters as a vital sensor at the heart of the smart grid with the government seeking to install 80 million smart meters by 2025. An end-to-end smart metering system with data management and data analytics is seen as a way to facilitate active electricity trading. The 30-minute interval data with a 60-minute lag will allow existing and new players in the electricity supply chain to manage the complex energy flow from multiple generation sources, correct imbalances between demand and supply, and manage contracts between retailers and end-users. Under the Japanese model, smart metering units act as a conduit between the A route – everything that happens before electricity enters a home, – and the B route, where energy demand is controlled within the customer‘s environment through an energy management system. The same infrastructure will be applied to gas and water meter reading. Energy companies will use the two-way communication function of smart meters to alert smart home appliances to demand response messages and tariff promotions METERING INTERNATIONAL ISSUE – 2 | 2015