A report entitled '2011 - Trends To Watch' published by Ovum, claims that although smart meter and smart grid investments help address a number of issued utilities companies currently face, there is a possibility that they could increase costs. It says investment in further new technlogies such as analytics, billing and CRM systems is required to counter these effects.
Smart meters are currently being trialled by energy companies in Australia to counter the issue of resource scarcity, by influencing customer behaviour though demand-response programmes. These take control of appliances during times of peak demand, and either reduce their power or turn them off. They also help to improve customers' understanding of their energy usage, how it affects their bill and the environment.
Smart grids help to reduce the environmental impact of traditional electricity production by supporting increased volumes of renewable energy and energy storage, with which ageing infrastructure was not designed to cope.
Stuart Ravens, Ovum principal analyst and author of the report, said: "The utilities industry is facing some tough challenges and pressure is coming from all sides: concern over CO2 emissions is high, billions need to be invested in infrastructure and resources are becoming scarce. In addition, the rising cost of fuel forces utilities to drive down operating costs, their workforce is ageing rapidly and they are experiencing an increase in payment defaults due to the economic downturn.
"Smart grid and meter investments will go a long way to address these problems, but to extract the full value of smart energy, utilities will require further new technologies such as analytics, billing and CRM systems.
"Furthermore, customers may struggle to understand the benefit from smart meters and may be confused by the additional complexity smart meters bring. There is a very strong risk that this increase in complexity will cause an increase in customer service costs."
Ravens added: "While these benefits are significant, they should not be overestimated and seen as the answer to all the problems the industry is facing. While they could make an impact, the reality is that there is also a possibility they will not deliver what utilities are expecting."