Energy suppliers and utilities throughout the world are making decisions to deploy smart metering systems for their customers on a grand scale. The drivers are global incentives for reduced energy consumption and carbon emissions, opening of energy markets, strong pressure of regulators in several areas of energy management, and growing customer demand for new metering system services. Energy suppliers and utilities have an even stronger perception of their metering systems as necessary and strategic. Opportunities with these systems to retain existing customers and gain new ones are increasingly evident.
An advanced metering infrastructure (AMI) based on smart meters is the most important key. The AMI is the system that collects and analyzes data from smart meters using two‐way communications and giving intelligent management of various power‐related applications and services based on that data. The AMI is the deployment of a metering solution with two‐way communications to the electric meter. The implementation of AMI is widely seen as the first step in the digitalization of the electric grid control systems. Recently, AMI has gained great attraction in both industry and commerce due to the accurate improvement in online meter reading and control. The AMI is the architecture for automated two‐way communications between smart utility meters and utility companies.
The smart meter can identify power consumption in much more detail than a conventional meter and periodically send the collected information back to the utility company for load monitoring and billing purposes. Besides, the data from smart meter readings are also critical for the control center to implement Demand/Response mechanism. By using smart meters, customers can control their power consumption and manage how much power they are using, particularly managing the peak load. Hence, through customer participation, the utility companies can likely provide electricity at lower and even rates for all their customers, and the consequent carbon dioxide emission will decrease.