For 25 years, I've written and lectured about the need for smart metering, often concluding by saying, "Someday, utilities will use all that data."

Now, suddenly, the idea of smart metering and a smart grid have captured the interest of utilities and governments. Many other countries are replicating the North American experience. Utilities that once used metering data for little more than billing are now planning to deploy smart meters and use the meter data to improve their business operations.

It now seems inevitable that every First World country will be starting smart metering projects within the next decade, and every major city in developing countries will also start such projects.

The smart metering industry is so young that it also seems likely that worldwide standards will remain minimal and will have little effect on industry growth. Where standards are employed, they will probably be regional -- not international. So growth will include multiple generations of products, as well as an evolution of interfaces, equipment and services that will gradually converge over the next decade.

In the United States, the change came with the election of Barack Obama, whose interest in climate change led to advocating wider use of renewable energy and the eventual use of battery-powered electric vehicles.

The emphasis in the utility metering industry has shifted from advanced metering infrastructure (AMI) to smart metering. This is especially true among electric utilities. Gas and water utilities are also supporting smart metering, but with less fervor.

The drive toward smart metering is a worldwide phenomenon. Early successful work on AMI was concentrated in Canada, so there is a strong North American emphasis on smart metering beyond just the United States.

In November, China announced a smart metering project encompassing 170 million meters and an estimated budget equivalent to approximately $10 billion. In February, the project was expanded to 200 million smart meters, to be completed in three to five years.

The European Commission mandated smart metering in April for all electric, gas, water and heat meters, and put mandatory dates on electric metering -- 80 percent by 2020 and 100 percent by 2022. Many European countries have already passed laws with tighter deadlines than those mandated by the EC.

Worldwide there are approximately 2 billion electric meters, of which 150 million are in the United States, 300 million in Europe and 350 million in China as well as smaller numbers of meters in Canada, Australia and New Zealand. Although other countries with a combined total of about 1.2 billion electric meters have not made a smart metering commitment, it's unlikely that they can avoid the trend.

Key drivers

With the United States now participating in the Kyoto Protocol Replacement effort, it's inevitable that this new protocol will enjoy broad support in the United Nations. Because electricity generation is a key contributor to carbon emissions, most countries will need to better manage what they generate, and the only way to measure usage is through metering.

Equally important is the fact that smart metering will be a huge new industry worldwide. Deployment rates for smart metering will probably rival the deployment rates for cell phones and the Internet.

Countries that take an early, strong lead will have the best opportunities to produce the equipment that will be used by the rest of the world.

The key challenge is the word "smart." No collection of meters or sensors or communication systems makes a system smart. The smarts come from software systems that collect and process the metering data in conjunction with other utility information. Some of the smarts are expected to come from systems that do not yet exist, but a greater challenge is the need to interface with most other software systems currently being operated by the utility. For almost all electric utilities, these systems are not commonly managed and networked.

Even the most basic smart systems need information from a variety of other systems. A good example is an outage. In a smart environment, such a problem is broader than most robust, outage systems can handle. First, the outage must be automatically identified. This is usually accomplished by noticing the absence of information, for example, sensors not reporting, meter readings not increasing and communications not working. Locating the outage requires collecting information from many other systems such as CIS, GIS, metering, communications and engineering.

A smart system does more than identify the problem. It may notify affected customers, assuming that the customers' communications are not also out. And it will also start resolving the problem. It will evaluate the whole area affected by the outage, and try to reroute the energy to minimize the affected area. It will also try to identify whether specific equipment is nonworking, and route repair crews to the correct location. The new smart systems will also try to ensure that these crews either have the right replacement equipment on the truck, or identify where it is in inventory, or automatically initiate communication with suppliers or other utilities if replacements are not in inventory.

Simply stated, smart systems do more than collect information. They take action.

Some large utilities in the United States have already started the process of integrating existing systems to facilitate their move to becoming smart. One clear challenge has emerged from this effort - few utilities have the same systems, and many existing systems were homegrown or are out-of-date. In the United States there are over 3,000 electric utilities, and worldwide there are many times that number. The challenge to integrate existing systems will require many thousands of separate efforts.

Equally challenging, the software and hardware interfaces that connect network equipment to existing software systems are often different from one utility to another and from one equipment supplier to another. Also, the software systems are often different and store the data in different formats. Becoming smart will require a massive software effort worldwide, with at least minimal commonality among finished solutions when they are completed a few years from now.

A major challenge for the U.S. Department of Energy and similar government entities around the world will be to define standards. Though this effort will likely bear fruit eventually, the only way that the resulting standards will encourage trade worldwide is if they are open and flexible and can serve the needs of many countries. The likeliest outcome is a repeat of the CDMA fiasco in the cell phone industry many years ago -- standards that limit trade with other countries.

Why take action now?

We must take action now because there is a worldwide consensus that smart utility systems are needed and will probably lead to a better quality of life.

This type of consensus is rare, the result of political change, economic near-collapse, pending environmental disaster and technology that can solve the problem. Never before in this industry have so many governments worldwide simultaneously agreed to solve problems in a consistent way.

However, these times of consensus are fleeting. Other disasters will occur, there will be other crises to be resolved, and they will take attention away from smart grid. The time for action is limited.

The utility industry must take action now, or something else will take away the support of our leaders and the funding from our governments and ratepayers.

The choice facing every utility is simple. Do you want to address these challenges now while you enjoy a broad base of support or do you want to wait? Waiting will probably squander this opportunity, allow this brief time of consensus to pass, and force utilities to address these same challenges in a more oppressive environment.

Now is the time to move to a smart grid.