Energy efficiency driving smart metering movement in Europe
American regulators and politicians are not alone in their view that advanced metering can support energy efficiency. The market for advanced metering systems is also emerging in Europe – thanks to laws and regulations targeting energy efficiency.
In Western Europe, energy end-use efficiency and growing public interest in energy conservation has set the Advanced Metering Management (AMM) market in motion. Many EU countries are looking to AMM (also known as Advanced Metering Infrastructure) to increase energy conservation and even enhance the development of an energy services market.
Italy and Sweden have led the AMI charge and it appears others will follow. Italy, at the end of 2006, became the first European country with advanced metering systems for virtually all customers. Looking to improve energy efficiency, the Swedish legislature has become the first in Europe to mandate AMM, developing new national metering regulations requiring all residential meters to be read monthly.
Sweden’s mandate will likely accelerate AMM deployments in Denmark, Finland and Norway, where installations are steadily growing. Energy conservation is also driving similar reform in the Netherlands, which is expected to adopt legislation calling for nationwide AMM deployment by mid-2007. Austria and Portugal – which have concluded that AMM will increase profitability – are considering introducing smart metering systems throughout the country as well. Some estimate that by 2014 about 75% of all Austrian meters will be read using AMM systems.
One energy market for the EU
The EU is seeking to integrate the various energy markets within the EU into one common European energy market. With that in mind, the EU has issued two directives (i) directly related to metering with the following goals:
Create one EU market for measuring instruments including electric, gas and water meters; and
Propel each EU member to achieve energy savings through improvements in “energy end-use efficiency and energy services.”
Adopted in April 2004, the metering directive has streamlined regulations so that meters receiving approval from one country are automatically approved for use in other EU countries.(ii) The directive is designed to make it easier for meter manufacturers to enter new countries – and theoretically increase competition and innovation.
Directive on energy services
Enacted in April 2006, the EU energy end-use efficiency directive requires member states to save an annual target quantity of energy supplied to end-users (e.g., households) and achieve an aggregate reduction of 9% between 2008 and 2017. EU members must adopt these measures into national law within two years.
Energy companies will be required to offer services designed to help customers save energy, including providing new meters capable of collecting time-of-use information for new premises or those that undergo major renovations. The directive states:
“Member states shall ensure that, in so far as it is technically possible, financially reasonable and proportionate in relation to the potential energy savings, final customers for electricity, natural gas, district heating and/or cooling and domestic hot water are provided with competitively priced individual meters that accurately reflect the final customer's actual energy consumption and provide information on actual time-of-use. When an existing meter is replaced, such competitively priced individual meters shall always be provided, unless this is technically impossible or not cost-effective in relation to the estimated potential (long-term) savings.”
Customers must be billed on the basis of actual consumption that can be measured “frequently enough to enable customers to regulate their own energy consumption,” according to the directive. EU members must ensure that, where appropriate, the following information is made available to final customers in clear and understandable terms by energy distributors, distribution system operators or retail energy sales companies in or with their bills, contracts, transactions, and/or receipts at distribution stations:
Current prices and energy consumption;
Comparisons of customer’s current energy usage with the same period from the previous year, preferably in graphic form;
Comparisons with customers of similar type in respect to average normalized or benchmarked energy usage (wherever possible and useful);
Contact information for consumer organizations, energy agencies or similar bodies, including website addresses, from which information may be obtained on available energy-efficiency improvement measures, comparative end-user profiles and/or objective technical specifications for energy-using equipment.
While each EU member is free to decide whether AMM supports energy efficiency, the legislation appears to signify that advanced metering is considered a part of the future European energy policy. The move toward advanced metering is further supported by both environmental and consumer rights groups in Europe.
Energy efficiency, it seems, is now a major regulatory driver of advanced metering systems – both in the United States and abroad.
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Footnotes:
i A “directive” from the EU is a collective legislative act that requires member states to achieve a particular result without dictating the means of achieving that result. Directives normally leave member states with a certain amount of leeway as to the exact rules to be adopted. Directives can be adopted by various legislative procedures depending on the directive’s subject matter. Any member state that fails to pass the required national legislation or adequately comply with directive requirements, the European Commission (the executive body of the EU) can initiate legal action against the member state in the European Court of Justice.
ii Note that in-service instruments are outside the scope of the directives referenced in this article: national arrangements will continue to apply once instruments are in-service.