Changes to rules about the installation of smart meters in Brazil have dealt a huge revenue blow to foreign manufacturers that had been lured to the market, according to new research from Bloomberg New Energy Finance (BNEF).
Aneel, Brazil’s electricity regulator, had originally proposed to mandate a rollout of smart meters across the country, which would have translated into a $10 billion opportunity for smart-meter companies like Elster (Essen, Germany) and Echelon (San Jose, USA), according to BNEF.
But a revised plan, requiring utilities to install smart meters only if consumers request them, has cut that revenue forecast in half, to just $5 billion, says BNEF.
The legislative changes appear to have been made due to concern that high smart-meter-deployment costs would have put utilities under severe short-term pressure and led to rising energy prices for consumers.
Dilma Rousseff, Brazil’s president, believes that reducing power costs could provide a boost to economic growth, and mandating a smart-meter rollout would clearly be at odds with this goal.
CPqD, a research agency based in Brazil, has also told Bloomberg News that the economics of the original smart-meter proposal did not stack up.
Luiz Jose Hernandes Jr, the co-ordinator of CPqD’s smart-meter research, told Bloomberg News that “Brazilians use five times less power than in the US, and smart meters here are twice as expensive”.
The original proposal would have prompted the replacement of as many as 68 million meters across Brazil, but it is not yet clear how many meters Aneel expects to see replaced as a result of its amended scheme.
Having already made substantial investments in the Brazilian market, Elster has reportedly responded with dismay to the regulatory changes, although Echelon told Bloomberg News that there still appears to be a “promising” government effort to replace all meters with smart ones over the next ten years.
Category: SMART METERING