Why the US must invest in IoT infrastructure

June 8, 2021
Europe has been leading the charge in the uptake of these technologies; how can the US catch up?

by Frank Stöcker, CEO of EMnify 

Beyond the factory floor, the expanding Internet of things (IoT) ecosystem, enabled by the cellular network, is helping nations achieve critical carbon-reduction goals. Two areas where IoT technology is enabling both energy-use reduction and new business models are smart metering and EV-charging. Europe is leading the way in both these areas. Now, as the US recalibrates its energy and transportation policies, what can be learned from successes overseas?

To address climate change, countries are racing to transition to renewable energy using increasingly “smart” computing resources at the edge of the network. You know this. Enabled by the latest IoT CPaaS (communications platform as a service) cloud technology, these devices at the edge of the network are crucial to achieving the world’s energy-transition goals and instrumental in delivering energy-efficient and sustainable solutions.  

According to a recent study by 6GWorld, IoT solutions will bring about a reduction in worldwide electricity consumption of about 1.8 petawatt-hours (PWh) by 2030—sufficient to power more than 136.5 million homes for one whole year.

Smart metering and EV-charging are two areas where IoT technologies—sensors, gateways, routers, applications, and the cloud—are enabling both energy reduction and new business models. Europe has been leading the charge in the uptake of these technologies; how can the US catch up?

Europe invests in smart metering—for both industry and consumers 

As Peter Drucker memorably stated: “What cannot be measured cannot be improved.” Smart metering will be an essential part of our energy transition. The global smart meter market is predicted to surpass 588 million units by 2022. In Europe, it’s expected that a potential 158 million new smart meters will be installed across the continent by 2026.

Though smart meters are gaining ground in both Europe and the United States, European adoption is mandated by targets set by EU and member state government regulations. Italy leads in the adoption of smart meters. According to a report by McKinsey, Italy’s 2002 ‘Progetto Telegestore’ initiative has resulted in more than 30 million smart meters installed in Italian households, representing close to 100% coverage. Other countries such as Sweden, Denmark, and Finland, as well as non-EU member country Norway, may also be seen as early adopters with market penetration rates of 50% each, according to McKinsey. 

The EU’s Energy Efficiency Directive (EED), which came into force in 2012, requires that EU member countries commit to reducing greenhouse-gas emissions and energy consumption. The EED aims to increase the energy efficiency of buildings by 32.5% (as of 2018). Monthly consumption data must be provided to consumers by 2022, and by 2027, all meters must be remotely readable.

With IoT-enabled smart meters, metering service providers can simplify billing and reading processes, while consumers benefit from detailed insights into their consumption—fostering cost-saving behaviors while promoting energy conservation. 

Europe supercharges its EV adoption

Alongside the progress in smart metering is Europe’s leadership in electric vehicles. Globally, electric vehicle sales set new records in 2020, despite the COVID-19 pandemic. Europe was the largest growth driver in this trend, whereas the US continued to lag (source). Governments across Europe foresee EVs as the future of urban mobility. 

Here, the EU has set emission targets that limit the emissions for average passenger cars to 95g CO2/km, thereby nudging consumers to purchase electric vehicles rather than gasoline-burning cars. Germany is the leading market for plug-in electric vehicle (PEV) sales in absolute numbers, while Norway, despite its small population, has the largest share of EV registrations among European countries. 

Just as in the US, the lack of charging infrastructure has been a major hurdle in the mass-market adoption of electric vehicles. But, unlike the USA, the EU has accelerated the rollout of charging stations, with the result that Europe is now the world's biggest electric-car market. Just as with smart meters, this progress was driven through government guidance, ingenious national incentive schemes, and heightened environmental consciousness among the continent’s voters.

However, there’s a chance that the US will catch up. The Biden Administration wants to drive EV adoption by investing in the rollout of charging infrastructure across the country. Meanwhile, consumer awareness and interest in EVs are being spurred by mainstream models such as the Mustang and F-150 going electric. So, watch this space.

Energy infrastructure improvements will require a connectivity upgrade

What’s the foundational element for these (and many other) network-powered economic drivers? A secure and functional cellular IoT network is crucial. As Congress considers the pending infrastructure bill, it should allocate funding for network improvements to provide the necessary communications infrastructure. The US should invest in the latest connectivity and IoT technologies because smart meters and modern charging stations (along with a vast array of other IoT devices) will need secure ‘anytime, anywhere’ connectivity. 

To support the millions of new IoT (and IIoT) sensors and other endpoints, new cloud platforms are emerging; dedicated to the task of transforming cellular IoT into a cloud resource where a range of services are available, including data analytics, identity management, lifecycle management, and edge computing. Investing in IoT infrastructure is a safe bet—it’s what enables smart grid, EVs, smart cities, connected health, smart wearables, Industrial IoT, and the many other revolutionary developments that are reshaping the world and making it more connected.