Smart metering is arguably the most important development in the energy and utilities sector today. Utilities will be replacing their existing "Dumb" meters with "Smart" meters over the next decade. This technology allows consumers to reduce energy consumption, for countries to integrate alternative technologies into their energy systems, and to make energy grids more robust and cost-effective.

Scope of this research

• Forecasts of Smart metering uptake based on a model which looks at new build replacement, end of life replacement, and roll-out replacement of meters
• Insight into the current state of play and the activities of the players in each of the geographies studied
• Powerful learnings extracted from the experiences of the leaders in implementation - namely Italy, Ontario, Victoria (Australia) and the Netherlands
• Insights into key issues that need to be taken up in future roll-out programmes

Research and analysis highlights

• The market for meters and communications equipment alone is worth between EUR15 and EUR26 billion.
• The scale of the metering opportunity is circa 200 million meters across western Europe, spanning electricity and gas
• There are 9 key issues which flow out of the review of experience and are vital in the quest for benefit maximisation and cost effectiveness

Key reasons to purchase this research

• Challenge existing plans and programmes to raise benefits and reduce costs
• Understand the market potential by geography to maximise your return on sales and marketing investment
• Be ahead of the market evolution that will come as a consequence of Smart metering to position your organisation as a leader in the transition

TABLE OF CONTENTS

VIEW

• CATALYST
• SUMMARY

ANALYSIS

The size of the market is an irresistible attraction:

• The size of the market is an irresistible attraction – it has a value of between €15–26 billion
• Attractions differ depending on where you are in the value chain

Markets are on track for completion across all geographies by 2020:

• Italy and Ontario have led the field, Victoria (Australia) is also in the vanguard, and the US has launched a host of initiatives
• Modeling the evolution of EU smart metering markets
• Western Europe will be smart for electricity by the end of 2018
• Western Europe will nearly be smart for gas by the end of 2018

The following section analyzes the French market

• After a two-year test period, smart electricity meters will be introduced across 96% of French households by the end of 2017
• There are currently no plans for a gas meter rollout in France
• France remains a virtual state monopoly (1/2)
• France remains a virtual state monopoly (2/2)
• France is looking to become compliant with the European directive on smart metering
• Consumer take-up of smart metering services will be low
• ERDF project planning is well advanced
• The ERDF rollout is scheduled to be completed by the end of 2016
• Other distributors are gearing up to follow ERDF’s lead
• To get the full benefit of smart metering and cost saving, customers must subscribe to additional services from their supplier
• France’s electricity distributor-led initiative risks losing some of the benefits which come from an integrated approach
• The cost structure of the French program appears to be significantly higher than that in other countries

The following section analyzes the German market

• Following two years of trials, Germany will engage in a full rollout of electricity smart metering
• Gas Smart meter roll-out is expected to follow electricity
• Germany has a highly fragmented, liberalized and competitive energy market
• Fragmentation is causing a lack of standards, which is inhibiting progress
• The German power transmission system is heavily overloaded and will become more overloaded in the northwestern and central regions
• While legislation is not yet completely in place, the government is committed to rolling out smart metering across gas and electricity
• Germany has an ambitious program for smart electricity metering, but as yet no agreed plan for gas
• The challenge is to extract the government’s broad goals in a highly fragmented market

The following section analyzes the Italian market

• Italy is the global leader in electricity smart metering, with an already installed base in excess of 30 million
• Most of Western Europe is having difficulty getting up to speed: Italy
• Italy is the only very large-scale deployment of electricity smart metering in the world
• The rollout in electricity has delivered some valuable lessons and pointers for the future
• Enel’s customer vision for smart metering captures all of the sources of value envisaged today
• Following the success in electricity, Italy is on target for a gas smart meter rollout
• The gas metering architecture is still under discussion

The following section analyzes the Dutch market

• Most of Western Europe is having difficulty getting up to speed: the Netherlands
• Most of Western Europe is having difficulty getting up to speed: the Netherlands
• Liberalization changed the utility landscape in the Netherlands significantly
• Liberalization changed the utility landscape in the Netherlands significantly
• The proposal to be ‘smart’ by 2015 is now delayed due to privacy issues
• A broad range of communications technologies are envisaged
• There is agreement in the Netherlands on the smart metering rollout program
• Support for smart metering is growing and other applications are being considered
• There are still a number of hurdles to overcome

The following section analyzes the Portuguese market

• Portugal electricity
• Portugal gas
• The Portuguese government has committed to full deployment of electricity smart metering (1/2)
• The Portuguese government has committed to full deployment of electricity smart metering (2/2)
• Although time is running out, the ambition is to implement the rollout between 2010 and 2016
• EDP has the challenge of ensuring that consumer functionality is incorporated into the design through the INOVGRID project
• Through its INOVGRID project, EDP is proactively ensuring that retailer interests are addressed in the design of the smart metering architecture

The following section analyzes the Spanish market

• Spain electricity
• Spain gas
• Spain is fully committed to the rollout of smart metering
• Spain is fully committed to the rollout of smart metering
• The original rollout program was unrealistic due to technical, commercial and approval constraints
• Spain is a main driver in the quest for open standards
• Spain has run an extensive set of trials which makes it well placed for the early implementation of both electricity and gas meters (1/2)
• Spain has run an extensive set of trials which makes it well placed for the early implementation of both electricity and gas meters (2/2)

The following section analyzes the UK market

• UK electricity
• UK gas
• The UK has a highly competitive, liberalized energy market
• The UK is committed to universal dual fuel smart metering by 2020
• The UK government would prefer a CCP model
• Around 20,000 smart meters are currently being trialed, the majority as part of the regulator’s program
• New market entrant First Utility has been offering smart meters as standard for the last two years
• Smart metering offers the opportunity to rectify data flow problems in the industry

Experience to date can deliver valuable lessons

• Ontario
• Victoria is leading the way in Australia
• Victoria: the lessons learned to date
• Oxxio, a new entrant in the Dutch utilities market some years ago, established success with its smart meters
• Oxxio was cautious in finding the best solution for smart metering due to the market conditions and its new entrant position
• The penetration of smart meters in Oxxio’s client base is 40%
• Oxxio chose to proceed prudently
• Smart meter lessons learned: it works and it delivers on its promises
• Oxxio: some valuable lessons learned
• US developments

Implications for the future

• Implications for the future
• Governments and regulators need to decide what they want the program to achieve and then marshal the players to deliver it (1/2)
• Governments and regulators need to decide what they want the program to achieve and then marshal the players to deliver it (2/2)
• In Europe, PLC is a proven, cost-effective solution and should be considered by all governments/regulators
• In competitive markets, industry processes will need to be re-written prior to rollout
• Privacy and security issues need to be resolved
• Communication with consumers needs to be coordinated early and made regular to ensure that the public stays onboard
• In fragmented and/or competitive markets, consideration should be given to centralized services
• There need to be common standards to drive down costs
• Skills – redefining skill levels can increase the labor pool
• Stranded assets – this will involve a balancing act

APPENDIX

• Ask the analyst
• Consulting
• Disclaimer

FIGURES

• Figure: Values include meter purchase, installation, HAN and WAN purchase, and installation, but exclude all process and systems investments
• Figure: The EU market comprises circa 200 million electricity meters, of which 30 million have already been installed (predominantly in Italy)
• Figure: The EU market comprises around 80 million gas meters which have the potential to become smart
• Figure: The French market will comprise 32 million meters by 2020
• Figure: If a rollout did take place, an additional 12 million smart meters would be added to the French market
• Figure: The German market will comprise 44 million smart meters by 2025
• Figure: The German market will comprise 13 million smart meters by 2025
• Figure: Germany is seeing the formation of regional and service companies, which, in time, will facilitate progress
• Figure: The German power transmission system is heavily overloaded and will become more overloaded in the northwestern and central regions
• Figure: The Italian market will comprise 39 million smart meters in 2020
• Figure: The Italian market will comprise 23 million smart meters in 2020
• Figure: Enel’s customer vision for smart metering captures all of the sources of value envisaged today
• Figure: The Netherlands market will comprise eight million smart meters in 2020
• Figure: The Netherlands market will comprise 7.5 million smart meters in 2020
• Figure: Map of the Netherlands
• Figure: The Portuguese market will comprise 6.2 million smart meters in 2020
• Figure: The Portuguese market will comprise 1.3 million smart meters in 2020
• Figure: Through its INOVGRID project, EDP is proactively ensuring that retailer interests are addressed in the design of the smart metering architecture
• Figure: The Spanish market will comprise 27 million smart meters in 2020
• Figure: The Spanish market will comprise nine million smart meters in 2020
• Figure: The UK market will comprise 28 million smart meters in 2020
• Figure: The UK market will comprise 24 million smart meters in 2020
• Figure: The UK government would prefer a CCP model