Episode Transcript
[00:00:00] Speaker A: The future of energy is smart, and STS is right at the heart of it. For decades, STS has been the trusted standard for prepayment, and now it's evolving to power modern smart metering.
What makes STS so powerful is its balance. It keeps millions of existing meters running smoothly while also enabling next generation online solutions.
Utilities do not have to choose between the past and future as STS bridges both far from being replaced, it's more relevant than ever because it guarantees what matters most, and that is reliability, interoperability and confidence in every energy transaction. That's why the foundation of STS is so solid and why the future of STS is undeniably smart.
[00:00:54] Speaker B: Welcome to the ESI Africa Podcast, brought to you by your trusted Power and energy multimedia journal.
You can download this and all other episodes on esia-africa.com podcasts.
Let's get into today's conversation.
[00:01:15] Speaker C: For this podcast we are talking about Smart Metering Simplified.
I'm Nicolette Pomba Fonseo and I will guide you through what's driving the technology that is quietly powering millions of households and businesses around the world.
That being the evolution of Smart Metering and the Standards Transfer Specification commonly known as sds.
If you have ever wondered how your electricity is kept secure, reliable and future ready, this conversation is for you.
The big headline is that STS standard was recently reapproved for global use by the International Electrotechnical Commission.
That's a strong signal of its ongoing global relevance and reliance.
But more than that, STS has now fully evolved into smart metering, unlocking new opportunities for utilities and consumers alike.
We'll also be talking about the human factor because even the most advanced systems can be compromised if not managed properly.
Joining me for this conversation are 3sts association experts who are at the very center of this story.
On the line I have Lance Hawkins, Dady, who is the Chairman of the STS Association Board, Franco Pucci, the technical consultant, and Don Taylor, a specifications expert.
Together they'll help us unpack where we are, how we got here, and what the future of smart metering holds. So let's get started.
Don I'd like to talk about the big news.
The IEC recently re approved the SDS standard after a critical security review.
Why is this such a significant milestone and what does it say about the relevance of STS on the global scale today?
[00:03:22] Speaker D: Like you mentioned Nicolette, the SDS association recently commissioned a third party review of the security levels of the current IEC 62055 41, which is the IEC STS standard.
This came about because of the 30 odd years that STS has been going and periodically we need to reassess its suitability, the security levels that it presents, etc. Etc.
This resulted in a report that we then subsequently submitted to the iec, which in turn resulted in the following salient recommendations.
Now I'm going to go off in a little bit of a technical nuance here.
First of all, the prevailing encryption Algorithm, so called EA07 is a 64 bit algorithm and has been in operation since 1993. Subsequently, the global view from security experts is that it is no longer a 64 bit algorithm, is no longer really suitable.
This algorithm has now been deprecated from the revised 6205541 and effectively it is now being replaced by the so called EA11 which is 128 bit algorithm providing orders of magnitude greater security than before.
The IEC was very happy about this and accepted this proposal. So that's going forward as a, as a, an amendment to the IEC SDS standard.
At the same time it was decided to deprecate the common keys. Those were essentially in use for the earlier versions of repayment meters that utilized magnetic cards.
Those are no longer in use and it was considered prudent to remove those from the standard as well.
So we have up to date state of the art technology specified by the STS standard.
We're also improving the token lockout function for higher levels of security. And it was also recommended that we should prevent the sharing of vending keys between multiple key management centers. Now, to date we still have only one key management center, but the future may bring more than one, which means that there's a potential management issue that needed to be taken care of and this relates to that aspect.
As far as the amendment and computer compliance is concerned, I can mention that we expect the amendment to be published in early 2026, following which then the SDS association will give manufacturers 12 months grace to comply with the amended standards and the SDS will then no longer certify equipment using the deprecated algorithms after this grace period.
Furthermore, natural attrition will take care of existing EA07 meters over time because they have a finite limited life cycle and they will simply be replaced by the EA11 meters that come into play.
[00:07:49] Speaker C: Thank you so much Don.
And thank you for also sharing that there is an amendment on the way and that the utilities or anybody that is using the standard is aware of that. So let's now talk about looking at tokens for smart meters before we continue.
If you have questions about prepayment metering, implementing SDS or certifying a product. Visit the STS association at www.sds.com for guidance and support.
Right, we're now going to talk about tokens to smart meters. So, Franco, STS has completed its evolution into smart metering. Can you walk us through how this transition unfolded and what it means for utilities and consumers?
[00:08:42] Speaker E: Sure. Well, the STS association saw the need to become part of the smart metering systems that were emerging, and that's quite a few years ago.
So they considered what was then the foremost smart metering specification, which was DLMS qosim. They approached the DLMS QOSIM user Association to see if the STS specification could be included as part of the standard.
The DLMS User association was more than happy to include the STS standard and agreed to give us a STS gateway such that STS tokens could be transmitted to the meters using DLMs.
This of course opened the path for the STS to be included in the smart metering world, which was great for us.
What this meant was that utilities wanting to migrate their metering system to SMART but still wishing to use STS could now do so.
As a result of that, then companion specifications were then developed by the STS association to include this gateway into smart metering. And this of course included compliance testing standards.
Thank you.
[00:10:02] Speaker C: Thank you so much.
Now that we know where we've come from and where we headed, let's unpack the challenges of moving forward while still managing what's already in place.
Lance, while smart metering is the future, SDS will still service older infrastructure. How do you balance maintaining legacy systems while driving innovation into new markets?
[00:10:31] Speaker A: That's a good question.
STS was deliberately designed with longevity and adaptability in mind. On one side, it provides the foundation for basic reliable prepayment. Simple, secure and proven in millions of households worldwide.
That's why it remains essential for older infrastructure. Utilities can still depend on it to ensure continuity of service and revenue collection.
But STS was also developed to be forward looking. Its design supports not only traditional token based prepayment, but also smart prepayment where tokens can be delivered digitally, integrated into mobile platforms, and even coexist with advanced smart metering systems.
This makes STS a unique standard. It doesn't lock utilities into the past, but rather creates a bridge into the future.
So the balance isn't about choosing one or the other. It's about leveraging STS as the common thread.
We maintain the legacy prepayment base with the same secure standard, while also using the standard to underpin innovative smart solutions.
In this way, STS ensures utilities can modernize at their own pace without leaving existing customers behind.
[00:11:54] Speaker C: Thank you so much. And of course innovation is only as strong as its ability to stay secure, so let's dive into that.
Franco, Smart meters are often seen as a gateway into broader digital ecosystems. What makes the STS standard uniquely robust in securing these systems, especially against evolving cyber threats?
[00:12:21] Speaker E: Well Nicolette, one must remember that the STS system is only part of what is referred to as a smart meter. Smart refers to the ability to send and collect large amounts of data to and from the meter.
The STS has now been fully integrated into the DLMS specification and can therefore be used to seamlessly integrate with the full capabilities of a smart metering system.
All non credit related data can be accessed and changed using the DLMS specifications and credit and other STS based functions can also be used in this way.
The STS systems proved itself and has been in use over many years to be simple and reliable. It also offers a security layer that is strictly controlled and managed by the STS Association.
This in fact forms a second layer of protection to the system when coupled with the DLMS security layers.
To date there have been no reports of security breaches into the STS system and the STSA maintains the system to ensure that crypto algorithms are internationally accepted as best practice and relevant for the intended use. And as Don has just mentioned a few minutes ago, the standard has been reapproved to be secure enough for its intended purposes with the introduction of the EA11 algorithm and the deprecation of the EA07 algorithm.
[00:13:52] Speaker C: Thank you so much for addressing that particular factor which is always top of mind with utilities and consumers. But as we know with any system, technology is just one side of that equation and the human factor can often be the weakest link.
So Lance, you have said in the past that any system is only as strong as its weakest link, which is often the human element.
Can you share your thoughts on areas within the SDS ecosystem that the industry should be focused on, focusing on where potential mismanagement could compromise a security system?
[00:14:37] Speaker A: Yeah, sure, I think you know technology on its own is only part of the solution. The STS protocol itself is extremely secure, but like any system, its resilience depends on how it's managed and by whom. The weak points usually come down to process and people, not the standard itself.
One critical area is key management. If utilities or municipalities don't enforce strict controls around the vending keys, how they are used and by whom, what management controls are applied, this just opens the door up to misuse.
Similarly, vendor governance is vital, ensuring only STS certified systems and compliant devices are allowed into the ecosystem.
Another area is operational discipline. For example, poor user access, weak passwords or lack of audit trails can create opportunities for fraud. So the focus shouldn't just be on the technology, but on training, certification, governance frameworks across the ecosystem. If proper controls, procedures and governance are not in place, then it creates opportunities for fraud, ghost or counterfeit tokens to slip into circulation.
[00:15:54] Speaker C: Thank you so much Lance. So now we've heard how people and technology both play a role, but that SDS is a global system.
Now let's zoom out and see what lessons have been taught to us around the world.
Don't With STS deployed across so many countries, what lessons have emerged from global adoption that are now shaping the way forward in smart metering?
[00:16:27] Speaker D: Right, I think the first point is that prepayment metering concept has basically moved away from it being seen as a punitive measure to combat non payment of build accounts and is now seen and accepted as a convenience to consumers and utilities, especially those whose household budgets are cash based and that reflects directly back onto developing economies such as in Africa, Middle east, etc.
The second point is that the technical security level of the token based credit transfer, the supporting key managing infrastructure, has been proven to be adequate and the STS has never been breached as far as the STS association is aware.
But the operational security of token vending systems is still immature and it is a candidate for standardization and regulation of processes and procedures for utilities to follow as a revenue protection measure. Hence the focus from the meter to a system level as far as management is concerned.
[00:18:00] Speaker C: Thank you so much, Much done. We've covered quite a bit around the SDS and I'm sure that our listeners have now gotten quite a good understanding of what is on offer here. So I would like to look into the future and I'm going to ask each of my guests to respond to the same question here. And that is, if you were to fast forward five years, how do you see smart metering transforming utility services and customer experiences? So we've got two elements here and I'd like to start with you Lance.
[00:18:38] Speaker A: Sure.
In five years I think SMART will shift utilities from just simple billing to real time grid intelligence, detecting outages instantly and managing demand more effectively for customers. It'll mean transparency, control and flexible payment options through digital platforms. Overall, I think utilities will evolve into more customer centric data driven service providers with smart metering at its core.
[00:19:09] Speaker C: Thank you so much Lance for answering that question. Over to you now. Don.
[00:19:15] Speaker D: Okay, so what I see is that utilities are very interested in the combination of predictions payment combined with complex tariffs and demand management in order to support more effective energy production and delivery and in turn which have then a direct effect on the consumer behavior.
For example, time of use tariffs residing in the meter are effective means to shift consumer energy usage patterns away from peak demand periods by offering lower prices during off peak periods.
On the other hand, rising block tariffs are effectively used to reduce overall consumption or getting the more affluent consumers to subsidize the poorer consumers.
The emergence of residential co generation from distributed energy sources such as photovoltaic cells, panels and electric vehicles will require meters to support import and export energy tariffs. Together with prepayment functionality.
Smart metering infrastructure therefore requires remote online communications, but the reliability of networks in many developing economies will take some time to mature.
Thus, particularly for prepayment functionality, there's a need for an alternative offline channel for the delivery of credit tokens to the meter.
[00:21:04] Speaker C: Thank you Don, You've mentioned some interesting future aspects for SDS there, especially around electric vehicles, which we do see as being part of a lot of what South Africa wants to achieve.
Franco, over to you for what you see in the next five years.
[00:21:25] Speaker E: Well Nicolette, there's a long road ahead for utilities to fully integrate and make use of all the features offered by SmartMe Free Infrastructures.
You know, smart metering can start off very simple and migrate into a fully smart grid.
The amount of data that you can get from a system like this will be staggering.
As Lance mentioned, the capabilities of a fully functional smart metering system are huge.
If used properly, five years may be too short a period to see the full capabilities of a smart metering system, but essentially it's a very good start. I think all municipalities are heading that way. Almost every single meter that we certify and test is a smart meter, so it's definitely coming. But I think five years may be a little bit of a short horizon to see it fully implemented.
[00:22:24] Speaker C: Thank you so much Vanko for mentioning that. We have been talking about municipalities reinventing their business model for many years now, and using the smart metering and the STS functionality is probably one of the tools available to them to help them achieve that.
So while we've come to the end of our conversation, I do have one last question for each of you and I'd like to start with Don.
The question is for utilities, regulators and consumers listening to the conversation, what's the one key takeaway to you'd like them to keep top of mind about the future of STS and smart metering?
[00:23:09] Speaker D: Okay, from my perspective again, I think it's essential that utilities carefully consider compliance with international open standards and I emphasize those as being open standards regarding the smart meeting infrastructure to prevent supplier lock in when alternative proprietary systems are being offered.
The STS is such an example of an open international standard that ensures interoperability and multi sourcing of equipment and together with the integration with DLMS cosm, it opens the way forward for smart prepayment and smart metering.
[00:24:00] Speaker C: Thank you so much Dan for that last key takeaway.
Franco, over to you and what did you want our listeners to keep top of mind?
[00:24:11] Speaker E: Well, for me, the key takeaway is that there's a misconception that STS and smart metering are in fact competing. They're not. They're complementary.
STS simply forms part of a smart metering system and it allows utilities to continue using their vending infrastructure and token generation systems knowing that the systems are being kept up to date with emerging technologies and that the technology is a proven technology over many, many years.
[00:24:45] Speaker C: Thank you so much Franco. And last but not least, Lance, what is it that you would like our listeners to keep top of mind and maybe contact the STS association to discuss?
[00:25:00] Speaker A: Thanks Nicolette. I think both Don and Franco have highlighted the key aspects for me.
You know what Franco said just now about the STS and smart metering not being competing parts but being complementary is key.
STS remains the trusted backbone for secure prepayment, while smart metering builds on that foundation to develop richer data, flexibility, customer value.
Together they ensure a future that is both secure and innovative while protecting today's investments when enabling tomorrow's energy ecosystem.
[00:25:40] Speaker C: Thank you so much Lance. And that brings us to the end of today's conversation on Smart Metering Simplified.
We've heard how the STS continues to prove its strength on the global stage, how it has transitioned into a new era of smart metering, and why security depends just as much on people as it does on technology.
Looking ahead, it's clear that smart metering will play a central role in transforming utility services, improving customer experience, and making utility systems more secure and reliable worldwide.
A huge thank you to our guests today, Lance Hawkins, Daily, Franco Pucci, and Dan Taylor for sharing their knowledge, and thank you for listening. If you found today's episode valuable, don't forget to subscribe, share it with your colleagues, and join us again for the next time as we explore more of the innovations shaping the energy sector.
Until then, I'm Nicolette Pombofonsel and this was Smart Metering Simplified.
[00:26:52] Speaker B: You have been listening to an ESI Africa podcast for the latest news reports and interviews on power, energy and related industries, visit the ESI Africa website on ESI Africa or follow us on social media. Until next time, thank you for tuning in.
