This month the European Commission released its report on the status of smart meter deployment in the European Union.
The 2012 EU Energy Efficiency Directive required Member States to deploy intelligent metering systems for the long-term benefit of consumers. Also, by September 2012 Member States had to complete a cost-benefit analysis. Over two-thirds of Member States showed a positive CBA. Most of these countries are now committed to (or have already completed) smart meter rollouts.
For electricity, the 2012 directive targeted rolling out smart meters to at least 80% of consumers by 2020, in states showing positive CBAs. The directive did not set a specific target for smart metering in the natural gas sector -- but the European Commission stated that it should be achieved in a "reasonable period of time."
So far, appreciable progress has been made. Three Member States (Finland, Italy and Sweden) have already installed nearly 45 million smart meters -- representing 23% of planned total EU installations by 2020.
The EC estimates that rollout commitments will cost a total €45 billion to install by 2020, covering close to 200 million electricity smart meters, serving about 72% of all European consumers. For natural gas, about 45 million meters should be installed, serving about 40% of EU consumers.
Member States that showed a net positive CBA for electricity smart meters are expected to exceed the target of 80% penetration. However, this falls short of an EU-wide consumer penetration rate of 80%. That's because the business case for rolling out smart metering is not yet overwhelming throughout Europe. And for natural gas, it's even more challenging.
The figures below summarize what's driving value in Member States' smart meter CBAs. Importantly, energy efficiency and time-varying pricing account for 56% of the expected benefits. And regarding costs, software falls under "New System Costs" -- a small portion of the total costs, but absolutely essential in capturing value expected by regulators.
The report highlights the progress being made, but it also indicates areas for improvement. In particular, the report notes that Member States must ensure smart meter functionality. In particular, data access (such as next-day online data) must available in order to empower consumers to achieve desired energy savings and carbon emission reductions.
Figure 1: Share of main benefits associated with electricity smart metering rollout
Figure 2: Share of main costs associated with electricity smart metering rollout