Smart metering in Europe

Smart meters are generally electrical metering devices that record the electric energy consumption in intervals of an hour or less. Smart meters communicate this information back to the utility for monitoring and billing purposes usually on a daily basis. A two- way communication between a meter and a central system is also characteristic for smart meters.

Smart meters are prerequisite for the development of energy metering services like consumption feedback tools based on displays, websites and informative billing but also for demand response operations. Reller et al. (2011) studied the overall smart metering situation in the Europe. The study focused on the legal and regulatory framework and the progress of smart metering implementation process in the EU member countries and Norway. Reller et al. (2011) points out that the regulatory push and the actions of the market actors vary strongly between countries. Legal and regulatory framework in this case means a clear framework for the smart meter installation process aiming energy savings and/or peak load shifting. The progress of implementation process means that is there a clear and realistic roadmap for the implementation of the complete smart meter- ing rollout. (Reller et al. 2011)

Reller et al. (2011) divided the countries into five categories based on the situation in the two criterions. The results are presented in the figure below. The “Dynamic mov- ers” have a clear program for the implementation of the Smart Meter rollout. It can be seen that all the Nordic countries are included into this group. The “Market drivers” do not have legal requirements for a rollout but due to the demands from the customers some DSOs have started a smart meter rollout process. The countries included in “Am- biguous movers” have set a legal framework to some extent and the issue is regarded as highly important but still only some of the DSOs have started the rollout process. Final- ly, the “Laggards” are countries where the implementation of smart meters is not yet an issue. (Reller et al. 2011)

Figure 4.4. A Graphical overview of the legal and regulatory situation vis-à-vis the

process of implementation of smart metering. (Reller et al. 2011)

As earlier mentioned the Nordic countries are among the “Dynamic movers”. In Finland Electricity Market Act (66/2009) demands 80 % smart meter rollout by the year 2014 while the national regulator defined the minimum functional requirements for the meter- ing system. Over one million meters have been replaced with a smart meter while ap- proximately two million meters are still to be replaced. All the DSOs have started their rollout process. (Reller et al. 2011)

In Denmark there is no legal framework for the Smart Meter rollout, but still many DSOs are installing Smart Meters. The cost-benefit-analysis led to a negative result and therefore there is no mandatory metering of the households. The major driver for the voluntary metering is demand response. There is a total amount of three million meters and at the time of the research it was estimated that by 2011 half of them would have been replaced. (Reller et al. 2011)

The first country to indirectly mandate a full rollout of smart meters was Sweden. The monthly meter reading has been required since July 2009. By the 2009 nearly all of the final customers had remotely readable meters. Still, only 750,000 meters can per- form hourly metering and data handling. Almost four million meters need some invest- ments to be capable of that. The situation in Norway is discussed more in the next chap- ter. (Reller et al. 2011)

As to smart metering services, Reller et al. (2011) states that there is a wide range of feedback tools in the Europe that are currently available or in a piloting phase. The de- velopment of smart metering services is a prerequisite being able to utilize the energy saving potential among customers. Smart meters benefit energy companies for example by remote reading and more precise billing, but without feedback tools and additional

metering services there is no true benefit for the customers. Reller et al. (2011) con- cludes that “only metering services will provide added value to the consumers”. (Reller et al. 2011)

4.3.1 Implementation of the smart meter rollout in Norway

The Nordic countries are leading the way in smart metering. However, Norway decided to wait a bit longer before the full rollout of smart meters. In general, this was because Norway waited the finalization of the EU standardizing work related to the metering. Currently only the large customers are hourly metered. Finally, in July 2011 Norwegian Energy Regulator took a decision on the smart metering.

Because of the delay, Norway had a possibility to develop the smart metering sys- tem concept before the rollout and also learn from the implementation processes in oth- er European countries. Norway’s Energy Regulator mandated that all 130 of the coun- try’s utilities deploy smart metering systems. All of the final customers must be pro- vided with a smart meter system by the end of 2016 (Echelon 2011), while there should be 80 % rollout by the end of 2014. (Grammeltvedt 2011)

Norway’s Energy Regulator set some specific requirements for the smart metering systems. The metering data must be collected on a daily basis with 15-minute interval. Furthermore, there is a possibility to integrate the meter with other meters like gas and water meters. (Echelon 2011) Norwegian DSOs must also provide the customers with a possibility to have an in-home display for consumption monitoring purposes. In this case the customers need to pay the extra investments. (Grammeltvedt 2011) These spe- cifications are quite notable when considering the corresponding smart metering rollouts in the other Nordic countries.