Brazil's Smart Meter Regulations Not A Binding Mandate, But Still Indicate Significant Smart Grid Market Potential
WASHINGTON, Sept. 5, 2012 /PRNewswire/ -- Last month, Brazil's electricity regulator ANEEL announced long awaited regulations regarding the deployment of smart meters throughout the country. The new regulations were not the market catalyst – in the form of a binding mandate - many were anticipating, but nonetheless still provide for a very significant smart grid market to materialize in the country over the next decade.
Northeast Group, LLC today released a second volume of its earlier study Brazil Smart Grid: Market Forecast (2012-2022) that analyzes the market impacts of the new regulations announced in August 2012. The research firm found that Brazil is now expected to cumulatively spend $27.7 billion on total smart grid investments by 2022, as compared to the original forecast of $36.6 billion. These smart grid investments cover the transmission, distribution, metering and home energy management segments of the market. The largest reduction in the total forecast was found in the smart metering, or AMI, segment of the market. Distribution and transmission network investment forecasts remain largely unchanged.
"The August regulations were not the binding mandate that many had expected ANEEL to announce, calling for the replacement of all 63 million meters in Brazil," said Northeast Group. "As a result, we have revised downward our smart meter forecast for the country. At the same time, the regulation provides clarity for utilities and vendors and will help ensure that investment in this multi-billion dollar market will increase in the next few years. A recent wave of merger and acquisition activity in the Brazilian smart grid market shows that firms still see big opportunities in the country."
The recently announced regulations require all new meter installations to be smart meters by early 2014, but do not require the replacement of existing legacy meters. Instead, customers may "opt in" by requesting one of two types of smart meters: a free meter that enables time-of-use (TOU) pricing, or a more advanced smart meter (AMI) with additional functionality. Customers would need to cover the cost themselves of the more advanced smart meter. The additional functionality will include – among other things - net metering to boost distributed or micro generation in the country.
"Combined with a recent micro generation law, it is clear that Brazil is eagerly pursuing increased use of distributed generation," continued Northeast Group. "Brazilian residents now have access to the smart grid infrastructure and regulatory incentives they need to implement residential-level solar panels and other forms of distributed generation. Given Brazil's high transmission costs and high solar resource potential, this is a top priority."
In addition to updating its forecast, Brazil Smart Grid: Market Forecast (2012-2022) Volume II includes detailed analysis of the new regulations passed within the past six months, as well as information on recent smart meter deployments and new partnerships between Brazilian and international smart grid vendors. In the past several months, international vendors such as Elster, Itron, Sensus, Siemens, Silver Spring Networks, Trilliant and others have been active in either partnerships or merger and acquisition activity with Brazilian vendors, or have announced recent wins with utilities. The market has seen significant activity, which is a sign that large deployments are imminent.
Northeast Group has not altered its forecasts for distribution and transmission level investments, such as distribution automation and wide area measurement technologies in Brazil. These are expected to make up a significant portion of the total smart grid market in the country. Distribution automation technologies in particular will be critical in improving the reliability of Brazil's grid in the run-up to the 2014 World Cup and 2016 Summer Olympics.
Northeast Group expects many Brazilian utilities to continue to deploy smart meters to help combat non-technical losses, which are well above the levels seen in other parts of the world. The research firm added that, "even without a binding mandate, all Brazilian utilities will deploy AMI in some form, especially since five of the largest utility groups have non-technical losses above 14%. These utilities have found that AMI deployments can bring immediate savings by reducing theft; this alone justifies the business case. Several Brazilian utilities are even already experimenting with full-scale 'smart city' concepts that leverage a number of smart grid applications, such as distributed renewable generation and sophisticated home area networks."
Brazil Smart Grid: Market Forecast (2012-2022) Volume II forecasts 14 segments of the smart grid market in Brazil. These include market values for AMI segments (meter hardware, communications, IT, professional services and installation costs); distribution automation segments (substation automation; fault detection, isolation and restoration (FDIR); volt/VAR optimization (VVO); and grid monitoring and control); wide area measurement (synchrophasors), and home energy management segments (home area networks, electric vehicle supply equipment and smart solar inverters) through 2022. The report also provides a detailed overview of the electricity industry structure in Brazil and profiles the 12 consortia controlling 33 of the largest distribution utilities that make up more than 90% of the market. A smart grid vendor analysis in the report profiles those firms positioning themselves to win large smart grid contracts, including domestic Brazilian firms and international smart grid vendors.
The report is 134 pages long and includes over 65 charts, tables and graphics. Primary research was completed on the ground in Brazil, while secondary research used English and Portuguese sources. To order a copy of the report, please visit www.northeast-group.com or email Ben Gardner at: [email protected]
ABOUT: Northeast Group, LLC is a Washington, DC-based smart grid market intelligence firm. Our research is focused on the smart grid opportunity in emerging market countries.
Key questions addressed in this report:
- How will new regulations affect near-term smart meter deployments?
- How large will the smart grid market – including 14 segments – become over the next decade?
- Which international vendors are already active in Brazil, which have won recent contracts and which have been engaged in M&A activity?
- Which domestic vendors are poised to partner with international firms to exploit the growing smart grid market?
- How will Brazilian utilities build their smart meter business cases?
- Which utilities have already developed pilot projects and which technologies are they using?
- Where in Brazil are distribution automation and home energy management likely to see large deployments?
Table of Contents
i. Executive Summary |
1 |
i.i Updates in Volume II of this report |
3 |
ii. Methodology |
10 |
1. Introduction |
13 |
2. Brazil smart grid snapshot |
21 |
2.1 Current situation |
21 |
2.2 Regional comparison |
23 |
2.3 Electricity industry structure |
27 |
2.4 Smart metering regulatory framework |
32 |
2.5 Market drivers and barriers |
38 |
3. Smart grid market forecast |
50 |
3.1 Changes from the Volume I forecast |
50 |
3.2 Deployment start date and pace |
51 |
3.3 Cost estimates |
54 |
3.4 Alternative scenario |
55 |
4. Detailed smart grid market forecast and technology outlook |
56 |
4.1 AMI |
56 |
4.1.1 Meter hardware |
57 |
4.1.2 Communications options |
58 |
4.1.3 IT: meter data management and customer information systems |
61 |
4.1.4 Professional services |
62 |
4.1.5 Installation costs |
62 |
4.1.6 Prepaid metering |
63 |
4.2 Wide area measurement |
64 |
4.3 Distribution automation |
66 |
4.3.1 Overview of DA in Brazil |
66 |
4.3.2 Distribution automation components |
68 |
4.3.2.1 Substation automation and monitoring |
68 |
4.3.2.2 FDIR |
69 |
4.3.2.3 Volt/VAR optimization |
70 |
4.3.2.4 Grid monitoring and control |
71 |
4.3.3 Distribution automation activity in Brazil |
72 |
4.4 Home energy management |
74 |
4.4.1 Home area networks |
75 |
4.4.2 Distributed generation: solar inverters with communication capability |
75 |
4.4.3 Electric vehicle supply equipment |
77 |
5. Utilities |
80 |
5.1 AES |
80 |
5.2 Iberdrola |
84 |
5.1 CPFL |
85 |
5.2 Light |
87 |
5.1 Cemig |
91 |
5.2 Endesa |
93 |
5.1 Copel |
96 |
5.2 Rede Energia |
98 |
5.1 EDP |
99 |
5.2 Eletrobras |
100 |
5.1 Celesc |
102 |
5.2 Cemar |
103 |
6. Vendor activity |
105 |
6.1 Domestic vendors |
106 |
6.2 International vendors |
111 |
6.2.1 International vendors in AMI projects |
111 |
6.2.2 International vendors in distribution automation projects |
116 |
6.2.3 International vendors poised to expand in Brazil |
118 |
7. Conclusion |
120 |
8. Appendix |
121 |
8.1 Domestic electricity sector vendors in Brazil |
121 |
8.2 List of companies mentioned in this report |
125 |
8.3 List of acronyms |
126 |
List of Figures, Boxes, and Tables
Updated vs. original smart grid forecast |
4 |
|
Brazil smart grid: key takeaways |
6 |
|
Brazil smart grid: leading indicators |
7 |
|
Smart grid development at Brazilian utilities |
8 |
|
Updated Brazil smart grid forecast data |
9 |
|
Updated combined smart grid forecast |
9 |
|
Figure 1.1: Smart grid value chain |
13 |
|
Figure 1.2: Projected wind generation in Brazil |
14 |
|
Figure 1.3: Smart grid model highlighting focus in Brazil |
15 |
|
Table 1.1: Benefits of AMI in Brazil |
16 |
|
Table 1.2: Demand response options |
19 |
|
Figure 1.4: Solar and wind resources in Brazil |
20 |
|
Table 2.1: Classification of meters by type |
21 |
|
Table 2.2: Functionalities of electronic meters |
22 |
|
Figure 2.1: Emerging markets smart meter potential |
23 |
|
Figure 2.2: Current smart meter penetration rates in Latin America |
24 |
|
Figure 2.3: Per-capita electricity consumption in emerging markets |
25 |
|
Figure 2.4: Average residential consumption in Brazil |
25 |
|
Figure 2.5: Global per-capita CO2 emissions |
26 |
|
Figure 2.6: Actual and forecasted GDP growth in Latin America |
26 |
|
Box 2.1: Smart grid throughout Latin America |
27 |
|
Figure 2.7: Global residential electricity prices |
28 |
|
Figure 2.8: Electricity generation mix in Brazil |
29 |
|
Figure 2.9: Contracted and forecasted new generation |
29 |
|
Figure 2.10: Utility ownership in Brazil |
30 |
|
Box 2.2: Brazil political situation – the Dilma effect |
31 |
|
Figure 2.11: Electricity regulatory structure in Brazil |
32 |
|
Figure 2.12: Conventional and "white" tariffs |
35 |
|
Table 2.3: Smart grid-related government action in Brazil |
37 |
|
Figure 2.13: Global distribution losses |
38 |
|
Box 2.3: Smart meter business case in Brazil – an analysis of loss reduction alone |
39 |
|
Figure 2.14: Payback on AMI meter from loss reduction in average Brazilian home |
39 |
|
Figure 2.15: Payback on average res/comm. AMI meter from loss reduction in two utilities |
40 |
|
Figure 2.16: Aggregate cost savings from res/comm. non-technical loss reduction |
41 |
|
Figure 2.17: Percent manufacturing sales lost to power outages |
42 |
|
Figure 2.18: Electricity consumption growth in Brazil |
42 |
|
Table 2.4: Percentage of customers who would alter habits if peak prices were to double |
43 |
|
Table 2.5: Appliance ownership in Brazil |
44 |
|
Table 2.6: Smart grid drivers and barriers in Brazil |
45 |
|
Figure 2.19: Percentage renewable energy consumption in Latin America |
47 |
|
Figure 3.1 Updated vs. original smart grid forecast |
51 |
|
Figure 3.2: Timeline of smart grid development in Brazil |
52 |
|
Figure 3.3: Combined smart grid forecast |
53 |
|
Table 3.1: Brazil smart grid forecast data |
53 |
|
Figure 3.4: Annual AMI deployments |
54 |
|
Figure 3.5: Brazil smart meter penetration rate |
54 |
|
Figure 3.6: Delayed deployment scenario |
55 |
|
Figure 4.1: AMI cost breakdown |
56 |
|
Table 4.1: AMI forecast data |
57 |
|
Figure 4.2: Combined AMI forecast |
58 |
|
Table 4.2: Communications technologies |
59 |
|
Figure 4.3: Phasor measurement unit (PMU) forecast |
64 |
|
Table 4.3 Distribution automation forecast data |
65 |
|
Figure 4.4: Distribution automation forecast |
65 |
|
Figure 4.5: Substation and distribution automation in Brazil |
67 |
|
Table 4.4: Home energy management forecast data |
74 |
|
Figure 4.6: Home energy management forecast |
74 |
|
Figure 4.7: Electric vehicle forecast |
77 |
|
Figure 4.8: EV incentives in Brazil |
78 |
|
Figure 5.1: Smart grid development at Brazilian utilities |
80 |
|
Table 5.1: Brazilian distribution utilities |
81 |
|
Box 5.1: Light's Optimus program |
88 |
|
Figure 5.2: Non-technical losses as a percentage of total sales in Brazilian utilities |
89 |
|
Figure 5.3: "Smart city" projects in Brazil |
92 |
|
Figure 6.1: Leading smart grid vendors in Brazil |
105 |
|
Table 6.1: Leading smart metering vendors in Brazil |
106 |
|
Table 7.1: The next steps and necessary actions |
113 |
|
Table 8.1: Domestic electricity sector vendors in Brazil |
120 |
Companies covered in this report
- ABB (Sui)
- AES (US)
- Alstom (Fra)
- BPL (Fra)
- Celesc (Bra)
- Cemar (Bra)
- Cemig (Bra)
- CESP (Bra)
- Choice (Bra)
- Copel (Bra)
- CPFL (Bra)
- CTEEP (Bra)
- Echelon (US)
- Ecil (Bra)
- Eletra Energy (Bra)
- Eletrobras (Bra)
- Elipse (Bra)
- ELO (Bra)
- Elster (Ger)
- Elucid (Bra)
- eMeter (US)
- Endesa (Esp)
- Enel (Ita)
- EDP (Por)
- Gamesa (Esp)
- GDF Suez (Fra)
- Iberdrola (Esp)
- IBM (US)
- Impsa (Arg)
- ISA (Col)
- Itron (US)
- Landis+Gyr (Sui)
- Light (Bra)
- Logica (Ned)
- Nansen (Bra)
- Rede Energia (Bra)
- S&C Electric (US)
- Schneider Electric (Fra)
- SEL (Ger)
- Sensus (US)
- Siemens (Ger)
- Silver Spring (US)
- Telvent (Esp)
- Terna (Ita)
- TIM (Ita)
- Tractebel Energia (Bra)
- Treetech (Bra)
- Trilliant (US)
- V2Com (Bra)
- Way2 (Bra)
- Wobben (Ger)
SOURCE Northeast Group, LLC
Share this article