According to Directive (EU) 2019/944, metering activity can be deregulated and must not necessarily be a a Distribution System Operator’s (DSO’s) activity.
However, the metering remains largely regulated in the vast majority of the Member States.
Germany and the Netherlands are the only 2 Member States, where a part of the activity is deregulated: smart metering in Germany and metering of the large (non-household) consumers in the Netherlands.
The cost of metering is a part of a tariff, but is not distinguished as a separate tariff or tariff element in 17 Member States and in Wallonia region of Belgium, while it is distinguished as a separate tariff or tariff element in the remaining Member States and in Brussels and Flanders regions of Belgium (ACER Report on Distribution Tariff Methodologies in Europe, February 2021, p. 30, 31).
Annex I to the Electricity Directive 2009/72/EC requires the EU Member States to roll out electricity smart meters to 80% of consumers by 2020, unless the result of a Cost Benefits Analysis (CBA) is negative.
For the gas sector, Annex I of the Gas Directive 2009/73/EC requires Member States to prepare a timetable for the roll-out of gas smart meters based on a CBA (with no indication of a timeline).
Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC
Annex I, point 2
Member States shall ensure the implementation of intelligent metering systems that shall assist the active participation of consumers in the electricity supply market. The implementation of those metering systems may be subject to an economic assessment of all the long-term costs and benefits to the market and the individual consumer or which form of intelligent metering is economically reasonable and cost-effective and which timeframe is feasible for their distribution.
Such assessment shall take place by 3 September 2012.
Subject to that assessment, Member States or any competent authority they designate shall prepare a timetable with a target of up to 10 years for the implementation of intelligent metering systems.
Where roll-out of smart meters is assessed positively, at least 80 % of consumers shall be equipped with intelligent metering systems by 2020.
The Member States, or any competent authority they designate, shall ensure the interoperability of those metering systems to be implemented within their territories and shall have due regard to the use of appropriate standards and best practice and the importance of the development of the internal market in electricity.
The so-called 'Winter Package' defines a 'smart metering system' as an electronic system that can measure energy consumption, providing more information than a conventional meter, and can transmit and receive data for information, monitoring and control purposes, using a form of electronic communication (Article 2(18) of the Proposal for a Directive of the European Parliament and of the Council on the internal market for electricity (recast) on common rules for the internal market in electricity (recast), 30.11.2016, COM(2016) 864 final 2016/0380 (COD)).
'Conventional meter' in this context is 'an analogue meter or an electronic meter with no capability to both transmit and receive data' (Article 2(17) of the Proposal for a Directive).
Detailed rules on smart metering are envisioned in Articles 19 - 22 of the said Proposal for a Directive (see box below).
Article 16(7) of the Proposal for a Regulation of the European Parliament and of the Council on the internal market for electricity (recast), 30.11.2016, COM(2016) 861 final 2016/0379 (COD), moreover, stipulates that where the EU Member States have implemented the deployment of smart metering systems, regulatory authorities may introduce "time differentiated network tariffs, reflecting the use of the network", in a transparent and foreseeable way for the consumer.
Article 9(2)(a) of the Energy Efficiency Directive establishes the obligation of EU Member States to ensure that the "objectives of energy efficiency and benefits for final household consumers are fully taken into account when establishing the minimum functionalities of the meters and the obligations imposed on market participants".
It is for the EU Member State to decide which energy-efficiency objectives and which benefits to final consumers are taken into account when setting minimum standards for smart meters (Commission Staff Working Document Guidance note on Directive 2012/27/EU on energy efficiency, amending Directives 2009/125/EC and 2010/30/EC, and repealing Directives 2004/8/EC and 2006/32/EC Articles 9 - 11: Metering; billing information; cost of access to metering and billing information Accompanying the document Communication from the Commission to the European Parliament and the Council Implementing the Energy Efficiency Directive – Commission Guidance SWD/2013/0448 final).
Commission Recommendation 2012/148/EU of 9 March 2012 on preparations for the roll-out of smart metering systems (OJ L 73, 13.3.2012, p. 9–22) aims to facilitate the roll-out of smart meters, and provides common minimum functional requirements for the smart metering of electricity.
The requirements concern access and frequency of meter readings for the consumer, the network operator and any 3rd party designated by the consumer.
The meters must provide two-way communication for maintenance and control, support advanced tariff systems, allow for remote control of the power supply and/or power limitation, and provide import/export facilities.
Furthermore, meters must provide secure data connections, fraud prevention and detection.
Top 5 functionality requirements of smart meters across Europe, according to the ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Gas Markets in 2015, Consumer Protection and Empowerment of November 2016 (p. 44), are as follows:
- information on actual consumption,
- remote reading of the meters by the operator,
- bills based on actual consumption,
- access to information of consumption on customers' demand,
- customer control of metering data.
According to the above ACER/CEER Annual Report minimal technical and other requirements for smart meters are defined in legislation in eighteen EU Member States in the case of electricity and in ten EU Member States in the case of gas.
Most of these Member States require that smart meters provide information on actual consumption, make billing based on actual consumption possible and ensure easy access to information for household consumers.
However, functionality requirements differ widely across Member States.
ACER/CEER Annual Report of 22 October 2018 on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2017 (Consumer Empowerment Volume) refers, for example, to smart meters with remote consumption control functionality, which adapt the operation of specific home appliances, such as heat pumps, to hourly electricity prices, in order to benefit from shifting consumption to lower-price periods.
The said Report of 22 October 2018 looks, moreover, into the issues of:
- time intervals for consumption data stored in the smart meters,
- time-of-use contracts.
According to the said Report of 22 October 2018:
- the shortest time interval for consumption data stored in the smart meter varied across the EU Member States, the most commonly used was 15 minutes (in 14 countries), in 3 EU Member Staes it was 30 minutes and in further 3 EU Member States it amounted to 1 hour,
- customers in 13 EU Member States can sign up to time-of-use contracts with intra-day/weekdays/weekend energy price differentiation, while in 8 countries customers can choose real-time or hourly energy pricing.
According to the aforementioned ACER/CEER Report of November 2016, the roll-out of gas smart meters is still limited.
However, as pointed out in the CEER Report of 22 July 2019 (Case Studies on Implementing Technology that Benefits Consumers in the CEP, Ref: C19-IRM-16-04) in Sweden all customers have smart meters since 2009. According to the said Report, as from 2012 all customers in Sweden were also entitled “to opt for a meter upgrade in order to get hourly metering, however, very few customers have done so. By 2025 all meters will be upgraded to support hourly settlement, and thus enable customers to opt for dynamic price contracts. In this specific situation, customers who already want such contracts may request an upgrade of their smart meters ahead of the deadline”.
ITRE’s propositions of February 2018
Interestingly, the Report of the European Parliament’s Committee on Industry, Research and Energy (ITRE) of 27 February 2018 on the proposal for a directive of the European Parliament and of the Council on common rules for the internal market in electricity (recast) (COM(2016)0864 – C8-0495/2016 – 2016/0380(COD)) focused its draft amendments on issues of final customers’ privacy in the area of smart metering.
The original European Commission’s proposal only stated that “the privacy and data protection of final customers is ensured in compliance with relevant Union data protection and privacy legislation” while the ITRE added expressly that “it shall in particular be possible for the final customer to have access to information on the identity of other parties which access their personal data, and on the moment of access, in order to be able to enforce their rights under Union data protection legislation”
The ITRE also modified the European Commission’s proposals on customers’ access to metering data on electricity input and off-take.
According to the EU executive’s proposal the said data must be made available to customers via a local standardised communication interface and/or remote access, or to a third party acting on customers’ behalf, in an easily understandable format.
The ITRE additionally requires that this this access must be “as close to real time as possible” and must allow customers to compare deals on a like-for-like basis.
The ITRE amendments impose, moreover, the requirement that final customers must be able to download their metering data or transmit them to another party at no additional cost and in accordance with their right to data portability under Union data protection legislation.
The recast Electricity Directive
Articles 19 to 21 of the recast Electricity Directive reinforce and clarify the provisions regarding the roll-out of smart meters, seeking to encourage their widespread deployment across the EU.
Among other things, the revisions address:
- interoperability and common functionalities for smart meters;
- compliance with data privacy and security rules;
- consumers’ access to historical data and data on their electricity input and off-take; and
- aperiodic review of the economic assessment on the possible deployment of smart metering systems.
The recast Electricity Directive also entitles customers to request a smart meter to be installed in Member States where the cost-benefit assessment is negative, as long as the customer bears the associated costs.
Owing to the above, CEER recalls that smart meters cannot be considered as standalone devices.
Their roll-out instead relies on the deployment of IT and communication infrastructure that represent a significant share of the cost.
Much of this cost is fixed and is subject to significant economies of scale, such that a limited smart meter roll-out only to customers “on request” would prove disproportionately expensive on a unit basis. Hence, the associated costs could be considerable.
CEER notes the importance of establishing the meaning of the specific provisions regarding these requested smart meters in Article 21: “...shall ensure that every final customer is entitled on request, while bearing the associated costs, to have installed or, where applicable, to have upgraded, under fair, reasonable and cost-effective conditions...”