AMI in Latin America: Moving beyond Mexico and Brazil

There is finally a spark. After years of sitting on the sidelines, Latin America is finally making a play—on a meaningful scale—at the smart metering market. Across the larger markets of Brazil and Mexico, utilities have dabbled with smart metering for some years. Now that midsize markets like Peru, Colombia, and Chile are committing to high volume deployments in the near future, Latin America is gearing up for a period of sustained and record growth.

Motivations Are Clear

When taking a high level look at the region, the value of smart metering is abundantly clear. Latin America and pockets of Asia Pacific (most notably India) experience some of the highest rates of electricity theft in the world. Smart meters can detect and record theft of electrical service, sending meter tamper alerts back to the utility. Mitigating these (non-technical) losses is critical to improving the financial situations of these oft-strapped regional utilities and enabling higher levels of spending around more advanced smart grid technologies. In the evolution of the smart grid, smart meters sit right at the beginning; this is where much of Latin America resides today.

Traditional Giants

Brazil and Mexico have traditionally led the region when it comes to smart metering. In Brazil, utilities like AES Eletropaulo, Celpa, Eletrobras, Light, and others have at least experimented with smart metering, from pilot-scale projects to multimillion-meter deployments. In Mexico, state-run utility CFE is in the process of converting 30.2 million customers to smart meters by 2025. These regional giants will continue to account for the lion’s share of smart meter volumes across Latin America. Yet, new markets such as Peru, Columbia, and Chile will also account for significant smart meter revenue over the coming decade.

So What’s Changing?

According to BNamericas, Peru is set to commence an 8-year rollout project beginning in November 2018. In Colombia, some 11 million households will boast advanced metering infrastructure (AMI) systems by 2030 under plans announced by the Ministry of Mines and Energy. And in Chile, Energy Minister Andrés Rebolledo said on Twitter, “By 2025 all the country's meters will be smart, that is to say, people will be able to know exactly how much energy they consume and when.”

The emergence of these new markets helps beyond the simple contribution of new growth and extends to the establishment of new use cases. Smart meters are still low on the list of priorities for many of the region’s utilities, some of which are still focusing on electrification as their primary objective. For them, the costs of smart metering are still perceived as prohibitive. As new use cases are generated, regional perceptions will likely shift as benefits around billing, optimization, and theft are increasingly realized.

For more information on smart metering plans in Latin America, in addition to the rest of the globe, watch for Guidehouse Insights’ upcoming Global AMI Tracker 2Q18 report.