Smart Meters in Japan: Success Story & Smart City Tech to Watch
Utilities around the world have been racing to develop and distribute new technology to make cities “smarter”. Smart metering collects the consumption data of energy, water, gas, and other resources via IoT devices called smart meters, and enable better efficiency and delivery of resources throughout the entire smart city ecosystem by tracking usage trends and anticipating increases in consumption. While many organizations are rallying to meet ESG goals with IoT technologies like smart meters, there are other major benefits to be gained.
Organizations, businesses, and even governments are investing in smart metering on all levels for the advantages in convenience, accurate and transparent utility billing, control over consumption, and safety. In cases like Japan, smart metering is also helping to address socio-economic issues such as its aging population. This blog will explore Japan’s journey in smart metering, the various components and technologies required for smart metering, and the trends to watch.
Background
Since the 1990s, Japan has slowly followed in the footsteps of the U.S., which deregulated its electricity market in an attempt to cut prices and improve efficiency in the utility sector. Progress was slow because monopoly power companies like Tokyo Electric Power Company (TEPCO), the owner of the Fukushima plants, “wielded strong political influence.” Years after the Fukushima nuclear disaster in 2011, however, Japan took strides to finally deregulate its electricity market, becoming one of the world’s largest deregulated electricity markets.
This came in conjunction with Japan’s Ministry of Economy, Trade, and Industry (METI) 2014 mandate to liberate the electricity market. The goal of this initiative was to stabilize the supply of energy and curb charges. While smart metering has steadily seen adoption worldwide, what sets Japan apart is the top-down nature of this initiative, meaning the Japanese government was and is significantly driving the development and deployment of smart utilities. According to the 4th Strategic Energy Plan, all households and businesses were mandated to be equipped with a smart meter by the early 2020s, totaling 80 million smart meters. Thereby, acting on this mandate from the government, major electric power companies have since successfully deployed smart meters.
TEPCO, Japan’s biggest utility, had aimed to install 29 million smart meters by 2020, and by March 2019 they had reached the 20 million mark. Japanese gas utility companies have also undertaken steps toward smart meter development. In 2018, Tokyo Gas, the country’s largest provider of natural gas, which serves more than 11 million customers, began a full-scale installation of wirelessly-transmitting smart meters. In 2019, Tokyo Waterworks Bureau, Yokohama City Waterworks Bureau, and Osaka City Waterworks Bureau concluded an agreement on “Collaboration and Cooperation for Planning of Introduction of Smart Water Meter.” This initiative was expected to play a big role in the cost reduction of smart meters yet challenges remain such as its high costs.
More recently, smart metering projects have sought to address social economic issues. As Japan’s elderly population is projected to reach nearly three-quarters of the working-age population by 2050, labor shortage has become a big issue. One countermeasure to this problem is the use of automatic metering systems to achieve more efficient operations that directly affect the elderly population.
For example, smart metering makes it possible to use kitchen and toilet usage information to check on elderly people living alone. TEPCO is currently exploring the use of customer data to provide uniquely customized services. For example, one such service might monitor the behavior patterns of elderly people living alone so that, when those typical patterns are not present, the utility could alert the customer’s caregiver. These social benefits are one of the many reasons why Japan has propelled smart metering development to its current state with high success. Moreover, smart water metering can “increase awareness of water conservation and encourage early discovery of water leakage.”
Smart Metering Components
Smart data has driven Japan’s utility success and that all begins with the hardware, software, and intelligent components of the smart meter. The three main components of the smart meter design are the power system, microcontroller, and communications interface. The power system supplies power to the electronics in the smart meter. It should be equipped with battery backup to ensure that the metering electronics remain powered. Meanwhile, a microcontroller unit (MCU) typically includes an Analog-to-Digital Converter (ADC) and Digital-to-Analog Converter (DAC), which are necessary for the digital conversion of the electronic parts of the smart meter. Finally, a wired or wireless communication interface allows smart meters to report data to the IoT system for better servicing. In Japan, TEPCO’s smart meters, for example, have a modular design with the metering unit separated from the electrical terminals, making it easy to safely replace hardware components. TEPCO plans to focus on the development of smart meters that integrate the metering and communication units, which further reduces costs.
As previously discussed in our blog, generally there are three communications technologies used in smart metering — powerline communications (PLC), radio frequency (RF) and cellular technologies. Because electricity meters are connected to the electricity grid, they are best suited for powerline-based communications methods. Meanwhile, smart gas and water meters typically rely on either RF or cellular communications. RF mesh networks have dominated the Japanese smart electricity market; in fact, 9 out of 10 of the main electricity distributors utilize it as their primary smart meter connectivity mode. Unlike PLC, RF mesh enables wireless communication and is a core function of Automatic Meter Reading (AMR), which is mainly used by utility companies as a way to measure power consumption and collect data from the energy consumer. Paired with PLC, it provides better accuracy and coverage.
One major challenge of smart metering in Japan was connecting the existing household meter without completely disrupting customers’ daily lives. Unlike Japan’s 62 million residential electricity meters, which are all smart meters, a large number of residential LPG (liquefied petroleum gas) and city gas meters across the country remained offline. Gas company agents had been reading these existing meters manually once a month. Then in 2017, Nippon Gas Company (NICIGAS) — a Japanese integrated energy retailer that supplies LPG, city gas, and electricity — fitted 850,000 city gas meters in Japan with a network controlling unit (NCU). The move allowed the company to turn a traditional gas meter into a smart meter. This NCU is regarded as a “retrofit IoT” solution that can digitize consumption management without a complete overhaul of the old system, meaning it can effectively upgrade an existing meter to a smart meter in minutes without disrupting operation. Considering there are over 23 million LPG gas meters in Japan, this solution has allowed smart metering deployment to be sped up.
Smart Metering Considerations
Clearly, smart meters hold advantages over traditional metering devices. Global deployment of smart meters is also being driven by the growing digitalization of the power sector as utility companies increasingly depend on smart meters to cut transmission and distribution losses. Additionally, smart meters bring huge cost savings and benefits to Japan’s aging society with shrinking workforces and government budgets. Historically, Japan has been one of the first countries to invest in smart meter research and development and has since been hailed as a smart meter champion based on its rapid smart meter deployment.
Smart meters produce real-time IoT data for power generation and distribution that enable utility companies to gain the necessary insights to ultimately lower operating costs and demand on natural resources. For this reason, smart metering is a crucial part of many smart city initiatives and is often the first initiative undertaken by cities. Japan and its top leading utility companies have shown that smart meter development is not always easy. Consider the following factors for a successful smart meter implementation:
● Smart meter security: As with any other device connected to a network, smart meters are vulnerable to attacks. Although there have not been any major attacks through smart meters yet, it is important for businesses and even energy providers and utility companies to stay on top of device security. (Read more about SDT’s device and cloud security offerings here).
● Interoperability: There are various open standards for communications, but it is becoming increasingly important to have interoperability between systems and the data provided by smart metering systems. This is why it will be critical in the future for vendors to offer interoperability and interfaces between standards. In addition, it is important to also consider the continuing evolution of communication technologies. This will require the ability of businesses to mix and match various technologies with different communication protocols.
● Retrofitting: Organizations and businesses should look for vendors that can offer a solution where older meters are retrofitted with technology that makes meters “smart.” Otherwise, smart cities may be faced with very expensive technology replacement projects.
Follow the SDT blog for future updates and coverage in the smart metering field! Other resources on smart city technology can be found on SDT Naver blog or our SDT LinkedIn.
About the Author: Karen is a passionate B2B technology blogger. While studying at Georgia Tech, Karen first grew interested in cybersecurity and has since worked for several security and cloud companies as a global marketer. When she’s not freelance writing, Karen loves to explore new food trends.
