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Allez Linky!: France Greenlights Smart Meter Program

Eric Woods — October 5, 2011

The French government has formally approved the deployment of 35 million electricity meters, starting in 2013 with completion by 2018.  Deploying the Linky meter to customers across France will cost an estimated €4.3 million ($6.2 million).  The government also confirmed that the cost of the rollout is expected to be borne by Électricité Réseau Distribution France and recouped through new network efficiencies.

The project follows the completion of a successful trial of 300,000 meters around Lyon and the Indre-et-Loire department, involving Atos Origin, Itron, Landis+Gyr, and Iskraemeco.  There had been concerns that the government might delay plans for deployment given the financial crisis in the Eurozone and a presidential election beckoning next year.  The announcement that the project will create around 10,000 new jobs will help sweeten the pill politically.

The major challenge in France will be to ensure consumer acceptance.  There is a perception amongst consumer groups that the meters are primarily for the benefit of the electricity industry (dominated in France by nationwide utility EDF and its subsidiaries) and that in the end consumers will be bear the price of the meters.  Only minimal support for consumer energy efficiency is required in the basic rollout and energy retailers can charge more for additional information services.  A lot more work will need to be done if the meter is to play a role in reducing household costs and improving energy efficiency. 

These challenges reinforce more general issues that are becoming evident in the European push to deploy smart meters.  The arguments in favor of smart meters are well rehearsed, but as European deployments accelerate, it’s clear that aligning the interests of all the potential stakeholders is no easy task.  In Europe, the European Commission has promoted smart meters as part of its overall energy policy – with the new technology seen as helping address energy efficiency and also market liberalization.  The basic concept is that if consumers are more aware of the price they are paying for electricity then they will both reduce energy consumption and also be able to find better rates from other suppliers in a deregulated market.  That’s the theory anyway.

But European policy has also promoted the disaggregation of energy suppliers, with distribution networks and energy retails provided by separate players or between regulated and non-regulated entities from single suppliers (as in France).

This separation highlights a disconnection between the goals of the distribution systems operators and the energy retailers.  Where this split is most developed – as in the United Kingdom – it raises issues as to how a holistic view of the requirement for smart grid investment can be achieved.  Smart meters in the United Kingdom are largely being cost-justified by the potential benefits to consumers and retailers.  Distribution system operators (DSOs) have been involved in the specification but it remains a secondary concern for them compared to the work that needs to be done on improving the network to support renewable integration, for example.

However in most of Europe, it is the distribution company that is responsible for smart meter deployment. As someone from a German DSO said last week, they can’t justify smart meters purely in terms of the benefits to network improvements, as they can achieve the same ends in a more cost-efficient manner (for example, by the strategic placement of many fewer network sensors).  That is not to say the smart meters have no benefits.  DSOs will happily use any data that can be provided, but they can’t make a standalone business case.  ERDF is reported as saying that it will take 20 years to achieve payback on the Linky deployments from improvements in network efficiency.

It is clear that if European countries are to meet the target of deploying smart meters to 80% of customers by 2020, then they need to focus equally and consistently on the two challenges of consumer engagement and providing incentives to network operators.  The need for a holistic view of the smart grid is a commonplace, but realising it within specific market structures is the real challenge.

Moving towards a European smart grid is a huge engineering challenge, but given the social, environmental and market issues also at stake it sometime looks more like an exercise in advanced plate spinning.

One Response to “Allez Linky!: France Greenlights Smart Meter Program”

  1. Mr. Widemouth says:

    Have a peak at some videos that show how “green” smart meters are http://www.squidoo.com/beware-of-smart-meters

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