Brussels, Belgium --- (METERING.COM) --- December 1, 2009 - Much work remains to be done in order to ensure a sound future for smart metering in Europe, according to the European Regulators’ Group for Electricity and Gas (ERGEG).

In particular, a common approach should be envisaged for defining smart meters and their functional requirements. In addition, a standard communication protocol and a transparent methodology for conducting a cost-benefit analysis would contribute to the interoperability of this evolving technology.

These are among the findings of a status review on the regulatory aspects of smart electricity and gas metering in Europe (as of May 2009) conducted by the ERGEG in conjunction with national regulatory authorities.

The ERGEG found that in most countries (23 out of 25 in electricity and 18 out of 21 in gas), the responsibility for the meters, including installation, maintenance, meter reading, data management, etc., lies with the distribution system operator (DSO).

However, an analysis of the rollout policies for electricity and gas in Europe does not provide a uniform picture. In electricity, Italy and Sweden have completed their rollout for 90 percent and 99 percent of customers respectively. In addition, four countries have decided a large scale rollout of smart meters, and in a further 11 countries a rollout is under discussion. In gas, there are fewer uptakes of smart meters, with only Italy having a planned rollout, while four countries are discussing the possibility.

The review found that the most important policy objectives for supporting and encouraging a rollout of smart meters in both electricity and gas are energy efficiency, peak load management and more frequent meter readings, with 15 countries for electricity and 10 for gas having mentioned all three or a combination of them as the main drivers. Meanwhile, the two most important regulatory tools for doing so are legal obligations and minimum functional requirements.

Regarding the possible expected benefits of a standardized nationwide rollout of smart meters for all domestic household customers, the review found that for both electricity and gas the promotion of energy savings and energy efficiency was the most important benefit overall. Other areas where the responding countries see advantages are the possibility to develop new tariff models which better reflect consumption behavior, to give information on the global peak of consumption and contribute to an accurate network management, and to better detect fraud.

The ERGEG says the definition of minimum requirements for functions, interfaces and standards is a key element of a regulatory framework for an efficient and working smart metering system. So far, 16 countries have prescribed or discussed different elements of minimum requirements for smart electricity meters, while in the gas sector only four countries have prescribed some kinds of minimum requirements for smart gas meters. Given that there is no visible uniform approach for the functional and technical aspects dealt with by regulators and the differences in the requirements themselves for each function, a discussion at EU level is required to promote interoperability, standardization and an effective and efficient approach to smart metering, as this has an direct impact on market functioning and customer choice.

The ERGEG says topics such as meters’ functionalities and the stage and timeframe of rollouts are very complex and may very well undergo substantial and further changes, in particular as the provisions on metering in the 3rd Energy Package are implemented and as various European initiatives work on standardization issues. The ERGEG therefore plans to continue its dialogue and analysis with stakeholders and to develop guidelines of good practice on the regulatory aspects of smart metering.