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Five questions on Advanced Metering Infrastructure conversion in Japan

Several years ago, The Ministry of Economy, Trade and Industry initiated sweeping reforms for the Japanese electric utility industry. The reforms include liberalization of energy markets, decoupling of generation from transmission and distribution, and a metering upgrade to automated metering infrastructure. The Japanese utility industry is currently in the middle phases of the AMI conversion.

We discussed the AMI roll-out with Hiroto Kobayashi, director of cloud solutions in Japan for Oracle Utilities.

Edmonds: The Japanese government has mandated automated metering infrastructure throughout the country. What is the goal of the build-out?

Kobayashi: The utilities are one year in to the roll-out, which will take about four years total. The emphasis is on operational efficiency, combined with economic growth. Since the Fukushima earthquake, Japan has lived with the danger of energy loss, and combined with the fact that Japan has different electrical frequency between the eastern and western grids of the country, this will help with interoperability.

Resiliency is the key word in this project. Japan has a lot of storm incidence and natural disasters that affect the utility business, and now we have COVID-19 in addition to everything else. All of this is driving utilities to adopt different technologies to make the electric power system more resilient.  

Edmonds: With AMI, and the MDM, Japanese utilities will be gathering a lot of data. How do they intend to use the new data stream?

Kobayashi: The utilities are assessing how to use the data they will be receiving from this conversion. The top utilities in Japan, like TEPCO, Kansai Electric and Chubu Electric, are leading the investments in this technology. They are also forming peer groups to figure out how to utilize the AMI data for their business. Most likely the utilities will use AMI data, along with the IOT space (Internet of Things), to detect grid failure, and for asset management. There are some pilot programs that have started in this area, and it looks like the direction will be to use AMI and IOT to mitigate risk.

Edmonds: What’s the level of engagement for utility customers in Japan?

Kobayashi: It is gradually shifting toward more customer engagement, but it is traditionally lower than in other places in the world. There’s a lot of interest in how to engage more utility customers in Japan. A lot of companies want to drive digital transformation, but aren’t sure about the strategy for utilizing customer data most effectively.

Interestingly, some of the newer entrant utilities are more proactive in using data. These are companies that have entered the utility space due to market deregulation. These new entrants are trying some demand response pilot programs using mobile phone apps. Mobile penetration in Japan is very high.

With the COVID-19 health crisis and quarantines in effect, this is driving more customers to online web applications, such as paying bills online, and seeking payment assistance. Regulators are driving utilities to make assistance available to customers. There’s a certain segment of customers in every region seeking this assistance. So, in a way, this is creating a new level of customer engagement utilities haven’t seen prior to the pandemic.

Edmonds: Electric utilities are the first to use AMI. Will other utilities embrace this technology?

Kobayashi: The Tokyo Metropolitan Water Company is slated for a pilot project using AMI. It’s not clear yet about their goals, or even how widespread the AMI installation will be. Natural gas utilities have struggled to find justification to spend the money for AMI.

Additionally, with fiber through the meter technology, this makes multiple meter readings through one line possible. That technology could cause a gap in gas and water utilities installing AMI for their own systems.

Edmonds: How long to complete the AMI roll-out? Are utilities on track to meet their goals?

Kobayashi: Tokyo (TEPCO) will complete their build by the end of this year. Kansai Electric and Chubu Electric are planning to complete the roll-out by March 2023. Those are the three largest electric utilities in Japan. All companies are scheduled to complete the AMI project within the next three years.

This project is part of regulatory reform from METI (Ministry of Economy, Trade and Industry). Starting this year we have an open energy market where utilities can sell excess energy. Competition in the metro area is very high. For that, the AMI technology could help the larger utilities competing in that liberalized market.


Also read: Five questions on advanced metering infrastructure in Bangladesh
 

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