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From Policy to Implementation: The Status of Europe’s Smart Metering Market Point of View by Meir Shargal Energy, Utilities & Chemicals the way we see it
From Policy toImplementation: TheStatus of Europe’s SmartMetering Market
Point of View by Meir Shargal
Energy, Utilities & Chemicals the way we see it
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The European electricity market wentthrough a significant transformationduring the 1990s. It transformed froma monopoly structure to a structurallyunbundled market with the relatedchanges to company configurations.Although this transformation startedin the United Kingdom it has beenadopted, with country specificvariations, across Europe. In 1996, theEuropean Parliament and Councilissued the Internal Electricity MarketDirective 96/92/EC that set goals for agradual opening of national electricitymarkets and rules for transmissionaccess in the 15 member states at thattime.
In the last five years there has been amajor policy shift from keeping theelectricity price as low as possible in afree and competitive market toreducing carbon emissions. This shifthas also resulted in decisions to lookat the deployment of smart meters tohelp customers understand when theyuse electricity and to help them plansavings. Today, smart metering andsmart grid initiatives are forcinganother major transformation in theutility industry. Many utilities arerethinking their business models andbusiness processes as a result of theshift in the way energy is generated,delivered and consumed.
The state of the regulation andimplementation of smart metering
varies across Europe on a country bycountry basis. This results in wide adifference as to which is leading thesmart meters rollout – the governmentor the industry. The variance leads todifferent players taking the initiative -regulatory pull to utilities push. Tworecent European Directives, one onEnergy End-use Efficiency and EnergyServices (ESD)1 and another onMeasuring Instruments Directive(MID)2, stress the importance ofinstalling metering and billing systemsthat allows consumers to regulate andmanage their consumption.
The shift to smart metering is not justa European phenomenon where morerecently there have been severalAdvanced Meter Infrastructure (AMI)project announcements. In January2009, the new President Obamaadministration in the United Stateshas introduced a huge economicstimulus plan, which includes massiveinvestments in a smart grid. Just twomonths earlier, the State Power GridCorp. of China decided to replace allelectromechanical meters with smartmeters within five years. From anindustry perspective, the focus hasswung from talking about smartmetering to the challenges ofexecuting and delivering on thepromises and expectations that smartmetering and smart grid willrevolutionize energy management andgrid reliability across the globe.
1 EU directive on Energy End-use Efficiency and Energy Services – This directive obligate the EU countries to makenational energy efficiency action plans. The plans shall describe how the countries will realize a 9% reduction in finalenergy consumption compared with business as usual until 2016.
2 EU directive on Measuring Instruments Directive aimed at creating a single market for measuring instruments across theEU. The fundamental principle being that meters which receive a MID approval can be used in any other EU countryirrespective of where in the EU that approval was granted. The MID covers 10 instrument types including gas, electricityand water meters.
open standards. In Europe theInternational Energy Agency has setup more than a dozen tasks aroundstandards and interoperability forsmart meters and demandmanagement. Ibedrola, together withseveral metering vendors, is workingon a set of open standards basedaround technology they havedeveloped. EDF has a set of standardsfor interoperability and theNetherlands will release a set in 2009.These different initiatives arepromoting the transformation of thepower grid into a smart grid completewith the latest open standardstechnologies.
Across the European Union, countriesare actively moving toward advancedmetering systems both as they lookfor ways to reduce their costs whileincreasing service quality and inresponse to various European Unionenergy-related directives. Thefollowing table summarizes the stateof the regulation and implementationfor all of the European Union countriesand in addition Norway, Switzerland,and selected post SovietUnion countries.
The European Smart MeteringIndustry Group (ESMIG) believes thatonly through the widespreaddeployment of smart metering will theEuropean Union be able to meet its20/20/20 goals by 2020 (cutgreenhouse gas emissions by 20%from 1990 levels, increase renewableenergy usage by 20%, and cut energyconsumption through improvedenergy efficiency by 20%). Based oncurrent and future projects,Capgemini believes that by 2012between 25 and 40% of homes inEurope will be equipped with smartmeters, compared to 6% currently.One of the main challenges to thefast-track implementation of smartmeters is the lack of standards for acommon architecture andinteroperability of the variouscommunication technologies. This hasbeen compounded by the largedeployment of proprietarytechnologies in several regions. Butthe landscape is changing fast.Currently there are more than 30groups around the world working onthe issues of standards andinteroperability.
In the United States US$10 millionhas been set aside for the NationalInstitute of Standards andTechnology (NIST) todevelop newsmart grid
Energy, Utilities & Chemicals the way we see it
From Policy to Implementation: The Status of Europe’s Smart Metering Market 3
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Country Regulation Status Implementation Status
EUROPEAN UNION
Austria • The Eco-electricity Act, which was announced onAugust 2002 and fully came into effect in January2003.
• The European Union Electricity Directive wasimplemented through federal electricity law publishedin 1998 (“ElWOG 1998”).
• On October 1, 2001 the Austrian electricity marketbecame fully liberalized.
• The regulator is in favor of smart metering andtoday’s framework allows for this. Smart meters mustmeet minimum requirements and data access mustbe guaranteed.
• Linz Storm: Plan to install 75,000 Echelon Networked EnergyServices (NES) meters, with an option for a further 75,000.
• Feldkirch, Austria: Echelon installing 3,000 of Utilities Solutionfor the municipal electricity network.
• Energie AG: Electricity Utility in Upper Austria, Low volumetrials throughout 2007, was expanded to 10,000 metersduring 2008. Intention is to deploy higher specified meters forall customers from 2009.
Belgium • Developing plans to introduce smart metering fundedby an increase in distribution tariffs.
• Plans to install smart meters for four million customers inBelgium at a cost of €1.3 million, funded through increases inthe distribution tariff.
Bulgaria • 100% of the market is open with a regulated quotafor household consumers and small enterprisesaccording to the Energy Law.
• No smart metering requirements.
• No known activity
Cyprus • Cyprus is in the process of deregulating to complywith European Union directives.
• No smart metering requirements.
• Electricity Authority of Cyprus (EAC) is planning a 15,000meter pilot with smart metering. Although the project waspostponed a number of times, current expectation is that itwill start Q2 2009.
Czech Republic • The Czech Republic is in the process of privatization.All major energy enterprises have been converted tojoint stock companies but many are still state owned.
• The ultimate mix of private and state ownership in theenergy sector is not yet clear.
• The focus is on harmonizing Czech energy sectorstandards with those in the EU.
• As of 2006 all Czech electric customers can choosetheir suppliers.
• No smart metering requirements
• CEZ: Czech Electricity Provider undertaking a technologyevaluation pilot exercise with Schrack Tecknik of Bratislavaand Goerlitz of Austria. 400 Powerline Echelon Meters and350 RF EMH meters will be managed through a Goerlitzsystem.
• E.ON Czech Republic: Ongoing pilot exercise started in 2006to investigate technical issues and capabilities. Projectincludes 4,000 meters from four different manufacturers.
Denmark • Hourly metering (consumption > 200,000 kWh/year)was mandatory from January 2003. After January2005 the limit changed to 100,000 kWh/year.
• Mandatory requirements are under evaluation. Thefirst step might be to lower the requirement for hourlymetering to all customers consuming > 25.000kWh/year.
• The Danish Climate & Energy Minister has set up anexpert group which will develop a smart metersystem specification report by June 1, 2009.
• It is reasonable to believe that a mandatory rollout ofsmart meters could soon be a reality in Denmark (asthe case is in Sweden and Norway). Denmark has apolitically backed up ambition to be at the forefront ofthe developments of intelligent grids.
• Denmark publicly announced that they would like tobe a ‘play ground’ for electric car developers (E.g.Renault and BYD).
• Smart metering is being introduced on a large scale. Eightutilities have decided to invest in automated meter readingsystems, corresponding to approximately 33% of the totalnumber of meters.
• Syd Energi: Electric Company that serves approximately250,000 households in SW Denmark is installing the L+G AMIsolution (started in 2004 and due to complete in 2009).
• Elro Net: Installing Echelon NES based electricity meters toapproximately 50,000 homes (started Q4 07 and due tocomplete in 2010).
• EnergyMidt: Installing Echelon NES to approximately 150,000customers. Shipments started Q4 08 through to 2010.
• NRGi: Danish utility installing approximately 50,000 Echelonmeters.
• SEAS NVE: Danish utility installing approximately 350,000Echelon meters.
• Energi Fyn: Danish utility installing approximately 160,000Enermet meters.
• TRE-FOR: Danish utility installing approximately 13,000 L+Gmeters.
• Roskilde Hillerød: Danish utility installing approximately60,000 Kampstrup meters.
Energy, Utilities & Chemicals the way we see it
From Policy to Implementation: The Status of Europe’s Smart Metering Market 5
Country Regulation Status Implementation Status
EUROPEAN UNION
Estonia • Privatization of large scale enterprises, such as energy, is inprogress.
• Power production, transmission, distribution and sales arelegally separated and third party access is regulated.
• The Estonian Government is giving high priority to its energysector in its ongoing economic reform program.
• Actual management of energy infrastructure is to decentralizeto the local municipal level where possible, the energyregulatory functions carried out by mostly autonomousagencies, especially in cases where monopolies continue toexist.
• In January 2001, new electricity tariffs were established thatallows customers to choose their electricity supplier.
• No smart metering requirements
• Estonia Energy floated a Request for Proposal for smartmetering in November 2007.
Finland • In June 1995, Finland's Electricity Market Act came intoeffect and since 1997 all customers are covered.
• Energy strategy includes promoting a competitive market,diversifying energy supplies, energy efficiency, use ofrenewable, and reduction of carbon dioxide emissions.
• In 1990, Finland became the first country in the world toinstitute a carbon tax.
• In February 2009, government regulation is expected tobecome law in Finland, requires that utilities install smartmeters for 80% of Finnish homes by the end of 2013.
• Utilities move quickly to meet government mandates.• 20% already have a smart meter installed.• Vattenfall, Fortum and Vantaa Energy - the three largest utilityoperators - are all involved in voluntary full-scale installations.
• Vattenfall Verkko Oy: Currently 35,000 customers using L+GAIM solution based on PLC to GSM concentrators.
• Fortum Espoo Oy: Installed 63,000 L+G AIM meters using PLCand GPRS and completed in 2007.
• Satapirkan Sähkö Oy: Investing €10 million in a Landis+Gyrelectricity smart meter solution. The 70,000 meters will besupplied by two meter manufacturers and managed by aLandis+Gyr system. Technology will include GPRS and PLC inurban areas, and GPRS in rural areas. Installation began in2008 and complete in 2012.
France • Dominated by the wholly state-owned utility company,Electricité de France (EdF), which produces, transports, anddistributes over 95% of electricity in France.
• There has been partial liberalization of some aspects ofFrance's electricity sector.
• In 2007 Commission de régulation de l'énergie (CRE)benchmark Automated Meter Management/Automated MeterReading (AMM/AMR) projects through seven states in theUnited States and Europe, with the objective to build acompelling business case to transform French low voltagemeters fleet into smart meters.
• On June 6, 2007, CRE outlined the policy to be followed forelectricity metering at installations connected to low voltagepublic distribution grids for a power level of 36 kVA or less.
• Most French electricity distributors have been waiting for EdFsubsidiary Electricité Réseau Distribution France (ERDF) to setstandards for smart meters.
• In July 2008, ERDF – the French electricity network businessof EDF - announced the first phase of a nationwide rollout of33 million smart meters.
Germany • Considered one of Europe's leading market reformers.• Power market seems to be competitive. There are 900energy companies that operate in the German electricitymarket, but 80% of electricity generation is still controlled byonly four large companies: RWE AG, E.ON Energy AG,Vattenfall Europe AG, and Energie Baden-WürttembergAktiengesellschaft (EnBW). Churn rates are still moderate.
• In 1998, with the adoption of the Energy Industry Act of April1998, the electricity sector was completely liberalized.
• The Federal Network Agency (Bundesnetzagentur) ensuresliberalization and deregulation of the energy markets throughnon-discriminatory access and efficient use-of-systemcharges.
• The New German Energy Industry Act (EnWG) in July 2005opened the metering market to competition.
• The expectation is that the players in the market will make anactive contribution to defining standards in the powermetering market.
• The smart metering for private customers is in its infancy,there is no specific legislation. In 2010 time-of-use and loaddepending tariffs will be available.
• RWE Pilot in Mülheim an der Ruhr, 100,000 electricity smartmeter project.
• Yello Strom: Trial with 1,000 customers throughout 2008 totest a web-based smart meter solution for electricity.
• EnBW: Ongoing trial with 1,000 customers to test smartmeters and customer interfaces.
• Stadtwerk Haßfurt: German utility installing 10,000 electricitymeters over the next three years (to be completed by 2012).
• EWE: 400 meters pilot in Westerstede & Cloppenburg, runfrom October 2008 to October 2009. Includes Electronic MeterReading for electricity and gas as well as online visualizationof consumption via radio based Display, Monthly Analysis ofconsumption and a personal Website.
• TWK Kaiserslautern & EVB: Pilot exercise started in 2007using 1008 EVB METERUS meters, based on Echelon NESPLC system.
• Stadtwerke Bochum & EVB: Pilot exercise started in 2008using 500 EVB METERUS meters, based on Echelon NES PLCsystem.
• Mainova: Installing up to 1,000 smart meters in the north ofFrankfurt, 730 in Griesheim and 270 in the new town districtRiedberg in Riedberg.
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Country Regulation Status Implementation Status
EUROPEAN UNION
Greece • No smart metering requirements • No known activity
Hungary • At present, the Hungarian power market is not competitive.• A draft Bill aiming to introduce competition according tothe provisions of the European Union Electricity Directive iscurrently under discussion.
• The progress that Hungary has made is impressive, giventhe very difficult starting position of a fully verticallyintegrated state monopoly that imported record amounts ofelectricity from the former Soviet Union.
• No specific regulation around smart metering
• Elektrovojvodina D.O.O. Power distributor: Running twoAMR pilots. Each includes around 1,500 meters, and usesPLC connection to data concentrators in substations thatuse GSM/GPRS to reach the server.
• Plans in place to expand to 30,000 meters by 2010, andthen to cover the whole of the Vojvodina province (830,000meters) within ten years.
Ireland • The Electricity Regulation Act 1999 called for theliberalization of the market in order to encourage the entryof competition and new investment.
• In February 2005 the retail electricity market opened fully tocompetition and independent companies now supplyalmost half of electricity consumed in Ireland.
• The Department of Communications, Energy and NaturalResources (CER) has indicated its support for the CER’splans to implement smart metering in Ireland starting withthe roll out of a pilot project in 2008.
• The Commission formed several working groups that areundertaking investigations and studies into all aspects thatcould be associated with the technology, technicalfeasibility, supporting systems and customer behavior, inorder to justify the appropriate approach to adopt, andassist implementation.
• Smart meters for every home were announced November2007 with planned completion within five years.
• In 2008 the Commission focused on a pilot project of25,000 meters in cooperation and support of ESBNetworks (Distribution System Operator). Initial findingswere delivered on March 2008
• Northern Ireland Electricity: Implementing two waycommunications for prepayment customers. Installationcompleted for 175,000 customers. Roll out of enhancedfeatures announced in May 2008, including the ability topurchase credit online and also online energy consumptioninformation down to half hour intervals.
Italy • Digital smart meters have been compulsory for allelectricity providers since 2006. The government’stimetable is for 65% of customers of the approximately 100electricity companies to be on smart meters by 2009, 90%by 2010 and 95% by 2011.
• The regulator, government or other market parties have hadno influence on requirements Enel had to fulfill.
• The Italian regulatory authority established minimumfunctional requirements and introduced incentives for theadoption of advanced metering features related to qualityof supply.
• Enel: Replaced 27 million standalone electricity meters withcommunicating solid-state meters networked via a hybridwireless/ANSI 709 power line. Started in 2001 andcompleted in 2006.
• A2A in Milan is extending smart meters to its gas network.• Acea Distribuzione: Municipal utility with 1.5 millionelectricity customers in Rome - and 8 million watercustomers across Italy, implemented an AMM solution withLandis+Gyr for one million customers. All 1.5 millioncustomers will be covered by the end of 2009.
Latvia • Electricity Market Law was adopted by Parliament on May2005.
• Unbundling process was completed in 2007, deregulationis in transition
• No requirements for mandatory hourly metering.
• No known activity
Lithuania • No smart metering requirements • No known activity
Luxembourg • No smart metering requirements • No known activity
Malta • The electricity regulator was set up through the MaltaResources Authority Act of 2000.
• No smart metering requirements or date was announced.• Malta government is planning to introduce a carbonoffsetting program.
• November 2008, Enemalta announced that it will bechanging all its electricity meters starting 2009 in order toensure that energy consumption is adequately metered andto discourage tampering. Pilot due to start in March 2009.
Energy, Utilities & Chemicals the way we see it
From Policy to Implementation: The Status of Europe’s Smart Metering Market 7
Country Regulation Status Implementation Status
EUROPEAN UNION
Netherlands • A draft bill amending the Electricity Act of 1998 and theGas Act of 2000 announced in the summer of 2007. Thebill specifies the terms of conversion of low-voltagemeters.
• The government has announced its intent to require smartmetering and replace all 7.5 million electric meters and 7million gas meters in the country by the end of 2017.
• The amendments to the Electricity Act 1998 will lead to anew market model for metering. Metering will become theresponsibility of the grid operators. Grid operators areregulated separated from suppliers and producers.
• A partial roll-out (new buildings, renovation and oncustomer request) will probably start July 2009(amendments to the regulations still have to be approvedby the Senate).
• Mass roll out of smart metering will probably start aroundthe end of 2011.
• Alliander (formerly named Continuon), a leading Dutch gridoperator, has run various advanced metering trials startingin 2002 and more recently they have undertaken a 35,000meter deployment based on the NES system.
• Oxxio, a new supplier in the Dutch market (i.e. not asubsidiary of a traditional utility company) started ametering company to handle their own customers’metering. Current status is that around 100,000 addressedwere equipped with electricity and gas meters.
Poland • Liberalization of electricity prices has been planned in twostages. Phase one, from January 2008 (industrialcustomers) and Phase 2, from January 2009 for householdcustomers.
• Since 1998 the power market has been graduallyderegulating, it is still in transition.
• Poland has been gradually deregulating its power marketsince 1998.
• Equal access to the customers’ meter readings data iscrucial for the liberalization process, smart metering isneeded to address this problem.
• No smart metering requirements or date was announced.
• Smart meters are entering the market in Poland but on avoluntary basis only.
• Adequate equipment, remote control and measuringsystem can be installed only when the client (especiallythis with annual consumption over 100.000 kWh) wishesthis, but it has to participate in the cost of installation ofthe system and necessary devices.
Portugal • In the end of 2006, change of suppliers is allowed to allcustomers and the power market is unbundled.
• Considering introducing smart metering systemsthroughout the country.
• No known activity
Romania • No smart metering requirements • No known activity
Slovakia • No smart metering requirements • No known activity
Slovenia • As of July 1, 2007 electric and gas markets have been fullyopened.
• No smart metering requirements
• No known activity
Spain • Privatization process began in 1994 with the LOSENElectricity Act then the Electricity Act 54 in 1997, and lastthe Hydrocarbons Act 34 in 1998.
• Spain is in compliance with EU Directives, which requireEU members to privatize their electricity and natural gasmarkets.
• Spanish regulator forced Distribution companies toimplement smart metering projects in a specific timeframe, establishing also a set of minimum functionalitiesthat the implemented solution must cover. The ORDENITC/3860/2007 law established the obligation for DNOs toimplement smart metering solution replacing all the metersbefore 2018.
• Endesa and Iberdrola each plan to deploy 10 million smartmeters each to comply with new regulations.
• Lberian Smart Grid, Energias de Portugal (EDP), Iberdrola,and Union Fenosa potentially working together to deliver asmart grid.
• Iberdrola has announced a new PLC standards group andis working with several manufacturers on an open standardbased on the work done by ADD Group for Iberdrola.
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Country Regulation Status Implementation Status
OTHER COUNTRIES
Norway • Regulation about mandatory hourly metering for all finalcustomers with annual consumption over 100.000 kWhwas introduced on the Jan 1st 2005
• Any customer can require hourly metering of theelectricity consumption from its local DSO if he coversthe costs.
• In June 2007 the energy authority recommendedlegislation requiring smart meters to be installed by 2013.
• The intention is to pass charges of €5 per year onto allcustomers and complete the implementation by 2013.
• The Norwegian Electricity Industry Association is workingon voluntarily functional requirements with several DSOs.
• Approximately 10 DSOs have already built smart meteringvoluntarily for all their customers, while several big DSOshave already budgeted full-scale implementation of smartmetering within the next five years.
Switzerland • No smart metering requirements • No known activity
Armenia • No smart metering requirements • No known activity
Georgia • No smart metering requirements • No known activity
Kazakhstan • No smart metering requirements • No known activity
Kyrgyzstan • No smart metering requirements • No known activity
Russia • No smart metering requirements • Energoauditcontrol - Russian service provider to install90,000 to 375,000 Echelon NES PLC based smartmeters.
Ukraine • No smart metering requirements • No known activity
Country Regulation Status Implementation Status
EUROPEAN UNION
Sweden • The first studies into smart metering were carried out in2001.
• In 2003 the government passed a bill obligating the gridcompanies to a monthly meter reading for all electricityusers by 2009.
• Sweden will become the first county to achieve 100%penetration in July 2009 when monthly collection metervalues become mandatory.
• Vattenfall is in middle of rolling out 600,000 advancedmeters based on Echelon’s Networked Energy Services(NES) system.
• E.ON is in the early stages of rolling out 370,000advanced Echelon NES meters
United Kingdom • All aspects of utility metering have been unbundled andopened to competition.
• The supplier is responsible for metering and is required tocontract with a meter asset provider, a meter operatorand a data collector.
• In May 2007 the government set in train the requirementfor energy suppliers to install smart meters in mostbusinesses by 2012.
• In 2008 the government announced that it will require allhouseholds to have smart meters installed over the next10 years.
• The regulator anticipates a period of around two years toresolve the issues and to design the full detail of adomestic roll-out. The aim is to ensure that thesubsequent roll-out happens over a period of 10 years(by 2020).
• Centrica, Scottish and Southern Energy, British Gas andEDF have been testing smart metering technology inhomes for several years.
• Because distribution of electricity and gas is controlledby a single company within each identified area in theUnited Kingdom, implementation is likely to happen veryfast.
Energy, Utilities & Chemicals the way we see it
mostly to address the meter readingaspect without long-term vision of asmarter operational grid. The fact thatSweden and Italy has a very highposition on the analysis chart speaksto the fact that they are getting closeto 100% rollout but those are mostlyfor monthly remote meter reading.Those early adopters are now tryingto figure out what other benefits theycan squeeze out of this largeinvestment. Gathering monthly billinginformation to create accurate bills isa good step forward but most meterscan give you a lot more data once youget this data you need to create aplatform that will allow you to analyzeand forecast (some will have to be inreal-time or near real-time), andmonitor, manage, and act on triggersgenerated base on the analysis. In thecase of most of the Swedish meters,they can be read daily and providehourly readings.
The countries fall into fourcategories as shown on the graph.
•Regulatory Push: Regulatoryorganizations are very supportive ofsmart metering, but the market hasnot picked up yet, or the utilitiesare not seeing the value and notwilling to invest.
•Nothing Happening: Regulatoryenvironment is not friendly and theutilities are not pushing.
•Utility Push: Utilities are very activein implementation and deploymentof smart metering withoutregulatory support.
•Full Swing: Smart metering marketis very active – regulation ispushing and the utilities arereacting and trying to comply withthe regulation.
Although some countries in Europeare making a significant progressdeploying smart meters those are
From Policy to Implementation: The Status of Europe’s Smart Metering Market 9
AnalysisUsing the information in the previoustable we place each of the countrieswe had information on the regulatoryprocess and some implementationactivity in a four quadrant matrix. The“Y Axis” represented the regulationactivity and the “X Axis” representedthe implementation activities by theutilities. For the regulatory activity therange was from 0 regulator is notfriendly to smart metering to 10where regulator is extremely friendlyand is pulling smart metering.Similarly for the implementationactivities the range was from 0 wherethere is no activity to 10 wherepenetration is close to 100%.
To make the process less subjectivewe created criteria for the regulatorydirection.
1.Mandate to complete rollout:Regulator set a fixed end date whenall meters need to be converted
2.Incentive to invest: Regulatorsupports the recovery of the cost forthe deployment for the companydeploying the meters
3.Pilot incentive: Regulator set asideR&D money to test technologieswithout penalty
4.Communications Support:Regulations providing frequencyspace or special tariffs to supportthe movement of data from themeters to the central office
5.Ownership rules: Regulationsdefined clear rules on who owns themeter and the meter data with clearindication of who can do what withthe data collected
6.Data exchange rules: Regulationsdefined clear rules on who has toshare what data with whom in whattime period and what the charges, ifany can be
Regulation vs. Implementation
Friendly
Spain
United Kingdom
IrelandNetherlands France Denmark
FinlandNorway
Sweden
Italy
Portugal
BulgariaLatvia
Cyprus
Belgium
Russia Poland
Czech Republic
Hungary
Austria
Estonia
Malte
Germany
"Regulatory Push" "Full Swing"
"Nothing Hapening" "Utility Push"
NotFriendly
FewImplementation
ManyImplementation
Adoption
Reg
ulat
ory
Dir
ecti
on
Source: Capgemini
SummaryTo a large extent the adoption ofsmart metering in Europe is driven byregulation. National concerns over thefuture energy situation and Europeaninitiatives such as EU energyEfficiency have led several countriesto define mandatory requirements forthe deployment of smart meteringwithin a set timeframe. But the realityis that the compliance-based industryin which utilities operate doesn’t offerenough incentive for consumers,regulators or utilities to take thedifficult steps necessary to makeelectrical energy markets operateefficiently. Despite this fact, currentlyfinal dates for when smart meteringshould be in place had been set inFrance, Ireland, United Kingdom,Italy, the Netherlands, Norway,Denmark, Finland, Spain, andSweden.
Many countries are at a different stageof smart metering deployment forresidential electricity customers. Italywas the first to adopt the technologyas Enel deployed more than 27million PLC meters in the first half ofthis decade. By 2011, all 36 millionItalian electricity customers will becovered by smart metering. Enel wasable to justify this deploymentwithout regulatory support – mostsavings where obtained by the abilityto perform various functions remotely,instead of having a service technicianvisit the customer site, and respondmore effectively to customers. Enelestimates that it will make 6 millionfewer field visits each year andrespond to 98 percent of customerrequests within 24 hours. In addition,the system has provided improvednetwork planning and load balancing,while increasing fraud detection.
Sweden will however become the firstcounty to achieve 100% penetrationin July 2009 when monthly collectionmeter values become mandatory.Currently 71 out of 164 DNOs are
reported to be done with thedeployment. While the requirement isto deploy equipment for monthlyreading a few large DNOs are actuallygoing beyond that. Sweden’s mandateis accelerating the deployments inDenmark, Finland and Norway, whereinstallations are steadily growing.Energy conservation is driving similarreform in the Netherlands, whichlegislated Smart Metering deploymentin mid-2007. Austria and Portugal –which have concluded that SmartMetering will increase profitability –are considering introducing smartmetering systems throughout thecountry as well.
Lately the focus is shifting to Franceand Spain where EDF, Endesa andIberdeola have announced massiveprojects covering more than 50million metering points. In July 2008ERDF, the French electricity networkbusiness of EDF, announced the firstphase of a nationwide rollout of 33million smart meters. Endesa andIberdrola each plan to deploy 10million smart meters each to complywith new regulations in Spain. TheWestern Europe market is movingslower, but energy end-use efficiencyand growing public interest in energyconservation has set the SmartMetering market in motion.
The present situation andthe implementationplans for smartmetering differ
10
Energy, Utilities & Chemicals the way we see it
significantly from country to country.Clearly, it is a result of differentnational factors, including climate,consumption patterns, deregulationpath etc. Even in the Nordiccountries, where national electricitysectors are in many ways very similarand cooperate closely, there are quitedifferent requirements and plans forimplementation of Smart Metering. Itis unlikely that these differences willdiminish in the close future,considering that Energy ServicesDirective does not provide veryconcrete definitions andimplementation requirements.
One question that remains in thebalance is what is the minimumfunctionality that will be required tosupport the energy efficiencyinitiatives and the carbon reductiongoals? The equipment alreadydeployed varies widely in capabilitiesand the supporting communicationsinfrastructure also varies widely.Additional value may be driven byoperational uses of the information,but that increases the functionalityrequirements and the need
for communications bandwidth andlow latency networks to more the datato a central location.
If Europe is to meet its 20-20-20targets (increasing energy efficiencyand share of renewable energy by20% and reducing greenhouse gasemissions by 20%) within 12 years, itmust modernize and liberalize anageing electricity grid, createeconomies of scale for renewableenergy and promote consumerefficiency. On average deployment ofsmart meters from initial tender tooperation is 7 years, everyone needsto keep this in mind whenconsidering timelines for rolling outmeters. Smart Grid can take up to 20years to rollout – and only one utilityglobally – Tokyo Electric Power hascompleted a rollout of smart grid. Ifboth of these efforts are important tonational, European and Global goals,we will need the support of thegovernments, the industry players andequipment vendors to doit right.
From Policy to Implementation: The Status of Europe’s Smart Metering Market 11
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AcknowledgmentsThis Point of View is based on the vast experience and knowledge of the global network ofCapgemini. The author wishes to especially thank Doug Houseman, Michael Trampert,Marius Ostmoe, Trygve Skjotskift, Timo Graf, Hans Vrinds, Oscar Barrero Gil, OskarAlmen, Jagtar Basi and Alain Désandré for their valuable input based on their specificcountry experience.
