European smart metering rollout progresses – slowly

Although the European Union in its Third Electricity Package committed member states to an (electrical) smart meter roll out target of 80% by 2020, actual installation in Europe is proceeding in fits and starts, beset by doubts over the most future-proof solutions, fitness-for-purpose concerns, the right approach to using big data, and an unexpectedly cautious (not to say suspicious) reaction from householders.

Uncertainty is amplified by the fact that the success of the roll-out across the EU is dependent on criteria largely decided by member states, including regulatory arrangements, and by concerns about the extent to which the systems to be deployed will be technically and commercial interoperable, as well as guarantee data privacy and security. There is also no EU- wide consensus yet on the minimum range of operations required by smart meters.

The results are correspondingly patchy, as are the targets themselves. Italy, which in 2001 was the first European country to get started, expects to reach 99% penetration by 2020, but there appear to be doubts about the suitability of the technology chosen. Most states foresee a rollout of 80% or better by 2020: some (Germany, Slovakia and Latvia) have opted for a selective rollout, in Germany’s case amounting to only 23% by 2020. Nonetheless it is still expected that by 2020 almost 72% of European consumers will have a smart meter for electricity.

Slow in the UK

In the UK the problems have been weak policy, and customer disengagement. The well-known economics analyst Dieter Helm neatly summed up the situation in his March 2017 paper ‘Not so smart - what has gone wrong with the smart meter programme and how to fix it’.

In it, he says: ‘The smart meter programme started out as a good idea, but has been badly implemented ... with hard targets and overhyped claims about the benefits. £11 bn costs are supposed to produce £18 bn in benefits, and be paid for by the lucky customers who are assumed to get all these benefits.

‘Customers were going to have energy efficiency houses, and they would be able to shop around for the most competitive prices. Together with the heavily subsidised wind farms and solar panels ... these policies were together going to result in lower prices to consumers.

‘It has not turned out as planned. The energy suppliers are not on course to complete the smart meter roll out by 2020, there are problems with the meters, and consumers are not behaving in the way politicians assumed they would. They are not switching and the prices are going up sharply as wholesale costs are coming down.

‘It was decided that smart meters would be the responsibility of supply companies, not distributors. This was a fundamental mistake, which no other major European country made. Meters had always been in distribution, for the good reason that they are an essential part of the network system.

‘This fundamental error has had consequences that now haunt the smart meter programme. It meant that meters were no longer part of the regulated asset base. They could and ... may well be stranded. The result is that the cost of capital is higher. Customers are paying and will go on paying the difference.’

Developments in Germany

In Germany, which does not expect to achieve significant penetration before 2027, major utility E.ON is among those that have undertaken installation schemes in the form both of trials and of large scale mass installations, with or without grid integration. But R.ON sees smart metering as a key to the further development of intelligent distribution systems. one that can open up new opportunities for developing products and services that make energy consumption more transparent.

E.ON expects to provide more than a million of its German customers with a smart meter by the completion of the planned rollout in 2027. The company has now received the required certificate from the Federal Office for Information Security that allows it, as a ‘gateway administrator’ to take care of smart meter operation, configuration and data processing.

On this basis E.ON will be able to offer all IT services related to the installation and operation of smart meters, to its own network operators and to municipal utilities.

Pilot systems

In four German regions E.ON has launched pilot projects for the rollout of smart meters. On the islands of Fehmarn and Rügen in the north and in Saxony-Anhalt and Lower Bavaria several hundred customers in the E.ON grid areas of Avacon, Bayernwerk, E.DIS and Hansewerk will participate in the projects.

There is a the statutory obligation to install intelligent metering systems for customers with an annual consumption of more than 6000 kWh. Operators of plants funded under the Renewable Energies Act (EEG) with an installed capacity of more than 7 kW are also likely to be under an obligation to install such systems from autumn 2017.

After the completion of the rollout in 2027, around 20% of all electricity customers in Germany should have smart meters installed. Approximately 80% will be equipped with a so-called modern metering device, which is an electronic meter without a communication module.

E.ON Metering is offering support for municipal utilities with the rollout, from the smart meter gateway administration through to the complete operation of metering points as a service. E.ON says that it is already developing products and customer solutions ‘for the new, distributed and smart energy world.’

Working towards a million

In the Netherlands, where the government expects to achieve complete coverage by 2020, the grid operator Stedin and energy service provider Lyv Smart Lyving will work with Siemens as technology partner to create a smart electrical grid in which 20 000 smart home solutions and distributed energy sources, such as wind turbines or PV plants, are to be connected to a smart grid over the next three years. The core element will be the Siemens decentralised energy management system DEMS.

The aim is to provide intelligent control of power generation and consumption, starting in the Rotterdam district of Merwe- Vierhavens, in order to smooth consumption peaks and avoid grid overloads. Another goal is to encourage investment in renewables sources and storage systems The target is an optimised energy balance by 2050.

The smart grid also offers companies and households that generate power themselves attractive conditions for marketing surplus electricity. In this way the Rotterdam smart grid is expected to stimulate the local economy, smooth the way for innovations and new business possibilities, and create a pattern for other regions of the Netherlands.

If the test phase is successfully completed, the partners plan to extend the smart grid to other districts and later to the region, with a million additional connections. 

The EU’s Smart Electricity Systems and Interoperability division at its Joint Research Centre publishes a continually updated report on progress versus the 2020 target date. An interactive map can be found at <http://ses.jrc.ec.europa.eu/smart-metering-deployment-european-union>