Smart metering |
Smart meter roll-out, where have we got to?
A useful summary of the status of smart meter roll-out in European countries as of end 2022 is provided in the Energy retail and consumer protection 2023 market monitoring report, published in September 2023 by ACER (European Union Agency for the Cooperation of Energy Regulators) and CEER (Council of European Energy Regulators)
The table shows estimates of the percentage of European households equipped with smart meters as of end 2022, as presented in the ACER/CEER report, and progress towards meeting the target indicated in the 2019 Electricity Directive.
The report describes smart meters as “an essential tool to facilitate consumer engagement in the functioning of the energy system” and notes their successful roll-out in thirteen member states, but “regrets that eleven member states have barely started the process.” The thirteen successful countries have achieved a smart meter penetration rate of 80% or more. However, “many markets have yet to make smart meters available to their consumers” and ACER/CEER suggest that “the lack of real- time data on consumption and prices can limit consumers’ ability to become more informed about their energy consumption.” Taking into account “the progress in roll-out compared to the 80 % level and actual roll-out rates”, the ACER/CEER notes, “some delays have occurred or are expected to occur in the future.” The report mentions that Romania has a smart meter penetration rate of less than 20 % against a target of 80% beyond 2024, while Hungary and Lithuania have a roll-out rate of less than 12%, without any specific targets established by law. The non-availability of smart meters is a key barrier to consumers receiving regular and accurate metering data in a timely manner, says the report, and the lack of smart meters has additional consequences in that “without real-time data consumers are unable to take advantage of the opportunities to respond to real-time price signals.”
For innovative market players, the lack of smart meter roll-out can be a barrier to market entry and thus to competition, the report says, and “as new suppliers enter the market and offer real- time billing, consumers may respond by switching to other suppliers.”
Addressing challenges in the UK The smart meter roll-out in the UK was the subject of a recent assessment by the National Audit Office, independent public spending watchdog.
The NAO found that government and industry had overcome some of the most pressing problems facing the programme. For example, new smart meter technology has been developed that works in more homes.
However, the report highlights several challenges in achieving the current targets set
out by the Department for Energy Security and Net Zero (DESNZ). These challenges include a shortage of installation engineers and disagreements with suppliers (who argue that they have exhausted the ‘low hanging fruit’ of customers who want devices and therefore call for new policies to support the roll-out – such as mandating that any new homes built have a smart meter installed by default). DESNZ has called on suppliers to improve their performance against installation targets and invest more in rolling out devices.
In 2019, BEIS (Department for Business, Energy & Industrial Strategy), predecessor of DESNZ, forecast benefits of the smart meter rollout for consumers and small businesses at £19.5 billion. But the actual benefits per meter are likely to be higher than expected, says the NAO, due to recent high energy prices and emerging technologies increasing savings. As part of the 2019 analysis, DESNZ forecast total costs of the rollout at £13.5 billion. It is likely that the cost per smart meter will be more because average installation costs are higher than expected, due to, for example, a shortage of engineers. These costs are initially borne by suppliers and fed through to households via energy bills. Both costs and benefits have been delayed by the slower-than-planned rollout. In 2012, the government first set a legal obligation on energy suppliers, requiring them to complete the rollout of smart meters to their customers by the end of 2019. The government required suppliers to take ‘all reasonable steps’ to install smart meters in all homes and small businesses in Great Britain, but did not at that point set out what percentage of premises would need to have a smart meter for it to consider the rollout complete.
On three occasions the government delayed the deadline for the completion of the rollout, first to the end of 2020, then 2024, and then 2025. In February 2023, the government launched a consultation on plans to have smart meters installed in 80% of homes and 73% of small businesses by the end of 2025. According to the latest data, 57% – more than 32 million – of all meters in Great Britain are now smart, although around 9% of smart meters (around 3 million) were not working as intended as of March 2023.
The Infrastructure and Projects Authority has previously rated the smart meter programme amber – where successful delivery of a programme appears feasible but significant issues already exist, requiring management attention.
28 | September 2023|
www.modernpowersystems.com
To ensure the programme maximises value for money, the NAO recommended that the government updates data on programme costs and benefits. DESNZ and suppliers also need to work together to overcome disagreements and address the reasons that installation rates are slower than planned.
Status of smart meter roll-out across Europe
Share of final
Country
household consumers with smart meters 2022
Sweden Denmark Finland Estonia Spain
Norway
100.0% 100.0% 99.9 % 99.8 % 99.0 % 99.0 %
Luxembourg 98.5 % Latvia Italy
France Malta
SIovenia
Netherlands Portugal Austria GB
Ireland Belgium Croatia
Poland Slovakia
Lithuania Hungary
Bulgaria Cyprus
Czech
Republic Germany
Greece Source: CEER 2023
98.0% 97.5% 92.0% 92.0% 91.9 % 88.7% 73.0% 68.4% 56.0%
56.0% 22.4% 19.0%
18.7% 15.1%
12.3% 7.3 %
0.0% 0.0%
0.0% 0.0% 0.0%
Progress towards target of 80% of consumers equipped with smart meters (in line with Electricity Directive 2019)
Complete Complete Complete Complete Complete Complete Complete Complete Complete Complete Complete Complete Complete In 2023 In 2024 In 2024
No national law stating this target (despite positive roll-out decision)
Later than 2024
Not applicable (no positive roll-out decision yet)
Later than 2024 “In 2021”
No national law stating this target (despite positive roll-out decision)
No national law stating this target (despite positive roll-out decision)
No answer Later than 2024
Not applicable (no positive roll-out decision yet)
No answer
Roll-out postponed (due to public procurement procedure being challenged multiple times)
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