Brussels, Belgium --- (METERING.COM) --- February 1, 2012 - Customer participation in the electricity market is extremely important, and one way of increasing that participation is demand response, which is an area that can deliver benefits both to the customers and to electricity systems, the Council of European Energy Regulators (CEER) has identified.

In an Advice, following a consultation, on the take-off of a demand response market with smart meters in Europe, the CEER sets out four recommendations to enhance the implementation with household customers and small and medium sized businesses. To build customer trust the CEER recommends that service providers should aim to give customers appropriate information on offers, with the goal of creating customer awareness of how changes in lifestyle or occupancy can impact on household consumption patterns and therefore their final electricity bill.

Privacy and security is also important. When making a decision to install smart metering systems, privacy and security measures have to be guaranteed.

In addition the specific roles and prerequisites need to be in place, both for the market actors to be able to reach full potential of offers reflecting actual consumption patterns and for stakeholders to be able to reach full potential of the interface with the home.

The market actors pin-pointed are customers, micro generators, metering operators, distribution system operators (DSOs), suppliers, ESCOs and national regulatory authorities.

The CEER also recognizes that the increase of renewables in the grid and an increase in the level of demand response will require the development of new models for system management. It is likely that a large amount of energy will be used when the price is low, which can cause constraints in the local network. Each regulator has to consider this in relation to the network tariff regulation and bearing in mind not to create an overly complex electricity market for the customer. Possible ways of managing this include offering a flat non-flexible network tariff, capacity-oriented, semi flexible or a limited number of predictable tariffs, or highly flexible and innovating pricing formulas for network tariffs.

The CEER says the document can be used as a basic checklist for the take-off of demand response with smart meters.