While Great Britain marches on with its grand plan for a nationwide smart meter deployment, Germany has decided that a pragmatic approach is better suited to its energy strategy.
After a statement by the German Federal Ministry of Technology and Industry at the end of July, we now know that the country will not follow the European Commission’s program for 80% deployment by 2020. Instead, it will adopt a phased approach that will address its specific requirements around energy efficiency and renewable energy integration. Germany has stood alone among the Big 5 European Union (EU) countries in not having made a national commitment to the deployment of smart meters. In the absence of a comprehensive national policy, smart metering in Germany has been left to market forces and has thus been restricted to pilot projects and a few commercial offerings.
The European Commission required all countries that did not commit to a national program to produce a cost-benefit analysis justifying their decision and any alternative approach. In response to this requirement (12 months after the original deadline), the German government released a report commissioned from Ernst & Young: Cost-Benefit Analysis for the Comprehensive Use of Smart Metering. The report assesses several scenarios for smart meter deployment in Germany, including the EU model for deployment to 80% of households, a business-as-usual scenario driven by market forces and current metering legislation, and a modified rollout based on amendments to that legislation.
Roll-Out Scenario Plus
Under current rules, new buildings and major renovations, customers with an annual consumption of more than 6 megawatts (MW), and new sites producing more than 7 megawatt-hours (MWh) of distributed generation (DG) must have an intelligent meter. The report estimates that by 2022 these measures alone will only extend smart meter coverage to around 23% of the total German market, which at around 48 million meters is the largest in the EU.
The Ernst & Young report determines that smart meters will provide little benefit to small consumers. This, along with factors such as differential regional requirements, apparently undermines the case for a rollout to 80% of households. The report does recognize the role smart meters can play in supporting the restructuring of the German energy market around renewable energy and in lowering overall energy consumption. It recommends an alternative approach called the Roll-Out Scenario Plus, which involves some amendments to current legislation to require smart meters for smaller DG sites and areas where grid conditions necessitate urgent action (e.g., where there is a large amount of renewable energy feeding into the distribution network). It involves the deployment of both smart meters (with two-way communications capabilities) and intelligent meters without the communications capabilities. This approach would create a market for around 24 million new meters by 2029, with an estimated 50% of those being smart meters.
A Qualified Yes
The German government is not required to follow this plan, but the Ministry of Technology & Industry has reacted positively, noting that the findings “show that we in Germany need to design our roll-out of smart metering systems in a targeted fashion which meets the needs of our energy reforms.”
The German assessment is not as positive as many in the smart metering industry had hoped, but it’s not a rejection of smart meters, either. The value of smart meters for large consumers and for addressing critical grid management issues is clear. The new plan presents a balanced approach that is tailored to the particular requirements and context of the Germany energy strategy. It should be welcomed.
Tags: Distributed Generation, Germany, Policy & Regulation, Smart Utilities Program, Utility Innovations
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