Think smart; act smart; win smart

There’s never been a greater urgency to accelerate and complete the large-scale roll-out of smart meters across Europe, says Tomás Llobet of ESMIG.

Europe’s unprecedented price and supply crisis means making smart energy savings and securing affordable energy for consumers will remain a key political priority in 2023.

While a series of market interventions including energy price caps and other measures are being considered, there are cost-efficient ways to address the crises. Deploying smart energy solutions and the use of energy data can help to address the huge challenges Europe is facing while also having a positive impact on savings and consumer bills.

These measures need to be part of the solution and reflected in initiatives at EU level and in measures taken by national governments. The role of smart energy solutions for energy security and affordability needs recognition through accelerating the rollout of smart meters; implementing existing legislation, notably on real time data access and demand-side flexibility; and launching new forward-looking measures, such as creating standards for data exchange and a new European energy data space.

Smart metering provides benefits for the whole energy system and is fundamental to the development of smart grids. Most importantly, smart metering provides savings, empowers consumers, and strongly contributes to a more efficient use of energy, ultimately reducing greenhouse gas emissions.

Smart meters also generate huge amounts of data, which enables value creation and supports the digital transformation of utilities’ operations and creating innovative business models and solutions for market players.

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In the context of the current crisis, with ambitious 2030 and 2050 climate targets set in the European Green Deal and the REPowerEU Package to become more independent of imports, the time to accelerate and complete the large-scale rollout of smart meters across Europe is now.

Cost-benefit analyses (CBAs) will need to be repeated in Member States where they were negative or inconclusive regarding the implementation of the Green Deal and REPowerEU. CBAs need to fully consider – next to benefits for system operators or billing – the tangible value they can create for consumers and for energy efficiency, especially in times of scarcity and record high prices.

The deployment of smart meters has been mandated by EU legislation since 2009 but progress has been slow in many Member States.

It was expected that 80% of consumers would benefit from having an electricity smart meter in 2020 but this target will likely only be reached in 2025, and less than half of European consumers will have a smart gas meter by then.

The rates and degrees of functionality and interoperability of meters also vary significantly. Some Member States have barely begun their national smart meter rollout, while others have completed them at 100% and are already deploying or planning to deploy a second generation of smart meters.

However, the infrastructure, being cybersecure and collecting data, does not represent the full value smart metering can bring.

Unleashing the power of energy data is key for achieving energy and climate objectives, but it can also have an immediate impact on reducing consumer bills. It is crucial to make this data interoperable and ensure access to it in a non-discriminatory and secure manner for all authorised energy market participants including TSOs and DSOs, suppliers, energy services providers, and other market players.

Clear rules defining which market participants can access which type or types of data should be set and managed by an independent EU authority to avoid fragmentation in the European energy market.

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Consumers should get their energy consumption data for free. They already pay for collecting metering data and cannot be charged again. Billing data is a start, but not enough. Consumers should be incentivised to share their consumption data and be rewarded.

Additionally, the frequency of data is important to ensure that it will lead to positive behavioural changes. This way we will ensure that smart metering delivers its full value for the system and consumers.

To address the current crisis, ESMIG recommends focusing on three actions in coordination. European and national policymakers, regulators and energy industry/ market players all have a role to play:

1. Accelerating and completing the rollout of smart meters across Europe

While some Member States have completed their rollout, others are lagging to the detriment of consumers and energy efficiency.

• The role of electricity smart meters must be recognised as they bring tangible energy savings, empower consumers to better manage their energy, and enable the integration of renewables;
• The rollout of smart meters for gas and heat needs to be accelerated as their deployment is less advanced than electricity meters. CBAs here will need to factor in consumer benefits, and clear targets for deployment need to be set at European level;
• All functionalities and use cases for smart meters need to be enabled as they still vary widely across Europe. The technology is available but smart meters need to be deployed and used to their full potential.

2. Removing barriers on energy data access and sharing, making real-time data available to consumers

As data is a core asset for the energy transition, it needs to be interoperable and made available in real-time as mandated by the Electricity Directive. This is far from reality in most countries in Europe today, four years after the adoption of the Clean Energy Package.

• Barriers need to be removed and all existing provisions implemented to ensure access to real-time consumption data, helping consumers play a bigger role in reducing peak time demand, benefit from flexible tariffs, and reduce their bills;
• Data needs to be made interoperable and available to all energy market participants. Barriers on data access and sharing between market participants prevent savings being directly shown to consumers, who also need to be able to access, for example, through a home display or app, their consumption data to better understand and manage energy use;
• All use cases for automation technologies and AI-powered solutions need to be enabled to fully support efficiency, including the use of sensors, apps etc. to turn off appliances, or setting energy saving modes.

3. Implementing and enabling demand-side flexibility, eliminating regulatory barriers

Demand-side flexibility, a powerful solution to increase savings, is part of the EU’s electricity market design. Legislation was adopted in 2019, but the provisions have not yet been adequately implemented in most Member States, except for Finland and France, and to a limited extent, Italy, Slovenia and Spain.

• All existing EU legislative provisions for flexible consumption and generation must be implemented to better respond to high energy prices, reduce volatility and foster energy independence;
• Regulatory (national) barriers on enabling demand-side flexibility should be eliminated and active and voluntary participation of all energy end-users, in digitally connected and automated systems, should be promoted.

Finally, as Europe is becoming more self-reliant, and the limits of dependency are evident, it is crucial to support a strong European energy industry, serving and securing mission critical infrastructures and managing large amounts of sensitive data.

At the same time, fair competition must be ensured and a level playing field created, as unfair practice, such as state subsidies, in ‘third countries’ distort competition in the internal market.

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