With the end of the decade quickly approaching, the team at SET is putting on our magic goggles to prognosticate some likely trends in digital water for the next year and beyond. 2020 is not only the dawn of a new decade, but it’s also witness to the fruition of a number of fascinating developments over the past few years that are likely to gain further traction in the year ahead. While some things in the water industry don’t change quickly, including the pace of change, there are trends that are likely to support the ongoing shift toward increased digitization of water utility management. Without further ado, here are our top 5 forecasts for the year ahead:
- The expansion of LPWAN as an AMI network technology
There are a number of new communication network technologies that have been introduced into the AMI discussion over the past few years. From proprietary solutions offered by many of the well known incumbents, to new open standard protocol such as LoRa WAN and SigFox, to new cellular entrants such as LTE-M and NB-IOT there is no lack of choice when it comes to choosing a new AMI communication solution.
The emergence of low-power, wide-area networks has changed the rules when it comes to deploying AMI. Because this new generation of networks is built on open standards which can accommodate devices and sensors from nearly any vendor, utilities looking to integrate with a broader smart city strategy have far more choices than in the recent past. Due to the low power requirements of these new technologies, field radio devices can now be expected to continue communicating for the effective life of the hardware - often as long as 20 years.
This means that more and more water suppliers are beginning to consider solutions that don’t require building and maintaining proprietary networks. This drives costs and headaches down, increases choice, and leads to more flexible and efficient wireless services across the entire municipality. Now that AT&T and Verizon have launched nation-wide LTE-M networks, watch for more cities to start taking advantage of the benefits of these new systems.
- Ongoing evolution of smart water business models
It is often business model innovation, not product innovation, that ultimately drives adoption of a new technology. The Apple iPod is a case in point. There were many mp3 players in the market prior to October of 2001 when the iPod was introduced. Yet it was the combination of ease-of-use, and more importantly, the introductions of iTunes and the $0.99 song download that transformed the music industry.
We are starting to see similar business model innovation in the water industry. While standard device sales and perpetual software license models remain prevalent, new financing options including public private partnerships (PPPs) and performance contracting are gaining traction. Beyond that, we are seeing many vendors offering AMI solutions under a Network-as-a-Service (NaaS) model where the cost of all aspects of network design, construction, and maintenance is bundled under a subscription plan for the term of the device lifetime, somewhere between 10 and 20 years. These models create long-term cost certainty, a shift from CapEx to OpEx budgets, and often, lower lifetime operating costs. While many of these models are in their infancy, expect to see new models introduced into the market that provide utilities with increased flexibility and leverage when adopting new technology solutions.
- Increased demand and deployment of remote valve control solutions
Along with new communication technologies has come remote valve solutions to support utilities looking to reduce the cost and hassle of manual connection and disconnection services.
While many urban suppliers serve tens of thousands of customer connections covering a small geographic footprint, rural providers may have to send service personnel hundreds of miles to read meters, connect water services, and implement line repairs. This is both costly and inconvenient for water manager. The implementation of remote smart valves allows utilities to enable and disable water services from the comfort and safety of their offices.
This capability is valuable in environments with high transient populations such as college towns, or where payment delinquency rates are high. In fact, by driving down service connection costs, customers benefit from lower reconnection fees in the event they have services suspended.
The ability to remotely control water flow to customers also allows utilities to offer prepaid services. This is already commonplace in many parts of the developing world so look for domestic suppliers who wish to better manage relationships and services with low income customers to increasingly adopt remote valve and prepaid water services.
- Emergence of standardized data interfaces
Utility managers commonly experience expensive and daunting challenges when trying to integrate various information systems including meter data management, billing, payment, enterprise resource planning, work order management, and even SCADA.
A growing chorus of frustrated complaints from water utilities is leading to pressure on vendors of information systems to make it easier to exchange data between disparate systems. The legacy model of proprietary technology that discourages exchange of data to competitive or complementary solutions is unsustainable. The data generated from these various systems is owned by the utility and their customers, not the vendors of the software that rely on that data to create value.
The establishment of standard data formats and exchange interfaces that emerge in the coming decade will begin to break down the data silos within utilities and streamline the exchange of information. This will increase operational efficiencies and encourage the development of new applications and systems to facilitate and manage these exchanges.
- Continued acceleration of AMI adoption
We’ve seen growing demand for Advanced Metering Infrastructure across the water sector for several years now so there is nothing really new in this prediction. However, the industry has passed the early AMI adoption stages where business cases were unproven, network performance was inconsistent, and device battery life left much to be desired. With years of business case validation, a plethora of proven (and new) communication network options, and new, low power radio technologies that allow for 20 year battery life, the move to mass market AMI adoption is upon us.
While data is hard to come by on the actual numbers, AMI adoption has been growing at a compound annual rate of roughly 6% for nearly the past decade. Over 30% of connections across the U.S. are automated in some form or another. Though many of these may be mobile reading systems, these technologies generally offer a relatively easy upgrade path to full AMI. A 12% compound AMI adoption growth rate is expected for the foreseeable future due to many of the other industry dynamics discussed in this article.