COMMISSION STAFF WORKING DOCUMENT Country fiches for electricity smart metering Accompanying the document Report from the Commission Benchmarking smart metering deployment in the EU-27 with a focus on electricity
Date: 2014-06-17
Institutions: European Commission
Subjects: EU Member State, EU statistics, electrical energy, electricity supply, electronic device, energy consumption, energy saving, natural gas













EUR-Lex - 52014SC0188 - EN











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52014SC0188

COMMISSION STAFF WORKING DOCUMENT Country fiches for electricity smart metering Accompanying the document Report from the Commission Benchmarking smart metering deployment in the EU-27 with a focus on electricity /* SWD/2014/0188 final */









TABLE OF CONTENTS
1.                 AUSTRIA............................................................................................................................................................... 4
1.1.        Organisation
of the deployment and regulation.................................................................................... 4
1.2.        CBA
local boundary conditions and scenarios....................................................................................... 4
1.3.        Smart
metering deployment rate............................................................................................................... 5
1.4.        CBA
outcome................................................................................................................................................. 6
1.5.        Remarks.......................................................................................................................................................... 8
2.                 BELGIUM............................................................................................................................................................. 9
2.1.        Flanders
- Organisation of the deployment and regulation................................................................. 9
2.2.        Flanders
- CBA local boundary conditions and scenarios.................................................................... 9
2.3.        Flanders
- CBA outcome........................................................................................................................... 10
2.4.        Brussels
Capital - CBA local boundary conditions and scenarios..................................................... 12
2.5.        Brussels
Capital - CBA outcome.............................................................................................................. 14
2.6.        Wallonia
- CBA local boundary conditions and scenarios................................................................ 16
2.7.        Wallonia
- CBA outcome.......................................................................................................................... 17
3.                 CZECH REPUBLIC......................................................................................................................................... 20
3.1.        Organisation
of the deployment and regulation................................................................................. 20
3.2.        CBA
local boundary conditions and scenarios..................................................................................... 20
3.3.        CBA
outcome.............................................................................................................................................. 22
3.4.        Critical
variables – sensitivity analysis................................................................................................... 24
3.5.        Remarks....................................................................................................................................................... 24
4.                 DENMARK......................................................................................................................................................... 26
4.1.        Organisation
of the deployment and regulation................................................................................. 26
4.2.        CBA
local boundary conditions and scenarios..................................................................................... 26
4.3.        CBA
outcome.............................................................................................................................................. 27
4.4.        Critical
variables – sensitivity analysis................................................................................................... 29
4.5.        Qualitative
assessments of non-monetary impacts and new enabled services.................................. 29
4.6.        Remarks....................................................................................................................................................... 29
5.                 ESTONIA............................................................................................................................................................ 30
5.1.        Organisation
of the deployment and regulation................................................................................. 30
5.2.        CBA
local boundary conditions and scenarios..................................................................................... 30
5.3.        Smart
metering deployment rate............................................................................................................. 31
5.4.        CBA
outcome.............................................................................................................................................. 31
6.                 FINLAND............................................................................................................................................................ 33
6.1.        Organisation
of the deployment and regulation................................................................................. 33
6.2.        CBA
local boundary conditions and scenarios..................................................................................... 33
6.3.        Smart
metering deployment rate............................................................................................................. 34
6.4.        CBA
outcome.............................................................................................................................................. 34
6.5.        Remarks....................................................................................................................................................... 35
7.                 FRANCE.............................................................................................................................................................. 37
7.1.        Organisation
of the deployment and regulation................................................................................. 37
7.2.        CBA
local boundary conditions and scenarios..................................................................................... 37
7.3.        Smart
metering deployment rate............................................................................................................. 38
7.4.        CBA
outcome.............................................................................................................................................. 39
7.5.        Critical
variables – sensitivity analysis................................................................................................... 39
7.6.        Remarks....................................................................................................................................................... 40
8.                 GERMANY......................................................................................................................................................... 41
8.1.        Organisation
of the deployment and regulation................................................................................. 41
8.2.        CBA
local boundary conditions and scenarios..................................................................................... 41
8.3.        Smart
metering deployment rate............................................................................................................. 43
8.4.        CBA
outcome.............................................................................................................................................. 44
8.5.        Critical
variables – sensitivity analysis................................................................................................... 45
8.6.        Remarks....................................................................................................................................................... 46
9.                 GREECE............................................................................................................................................................. 47
9.1.        Organisation
of the deployment and regulation................................................................................. 47
9.2.        CBA
local boundary conditions and scenarios..................................................................................... 47
9.3.        Smart
metering deployment rate............................................................................................................. 48
9.4.        CBA
outcome.............................................................................................................................................. 49
9.5.        Critical
variables – sensitivity analysis................................................................................................... 50
9.6.        Qualitative
assessments of non-monetary impacts and new enabled services.................................. 50
9.7.        Remarks....................................................................................................................................................... 51
10.              IRELAND............................................................................................................................................................ 52
10.1.      Organisation of the deployment and regulation................................................................................. 52
10.2.      CBA local boundary conditions and scenarios..................................................................................... 52
10.3.      Smart metering deployment rate............................................................................................................. 54
10.4.      CBA outcome.............................................................................................................................................. 54
10.5.      Critical variables – sensitivity analysis................................................................................................... 55
10.6.      Qualitative assessments of non-monetary impacts and new enabled
services.................................. 56
10.7.      Remarks....................................................................................................................................................... 56
11.              ITALY.................................................................................................................................................................. 57
11.1.      Organisation of the deployment and regulation................................................................................. 57
11.2.      CBA local boundary conditions and scenarios..................................................................................... 57
11.3.      CBA outcome.............................................................................................................................................. 58
11.4.      Remarks....................................................................................................................................................... 59
12.              LATVIA............................................................................................................................................................... 61
12.1.      Organisation of the deployment and regulation................................................................................. 61
12.2.      CBA local boundary conditions and scenarios..................................................................................... 61
12.3.      CBA outcome.............................................................................................................................................. 62
12.4.      Remarks....................................................................................................................................................... 64
13.              LITHUANIA....................................................................................................................................................... 65
13.1.      Organisation of the deployment and regulation................................................................................. 65
13.2.      CBA local boundary conditions and scenarios..................................................................................... 65
13.3.      CBA outcome.............................................................................................................................................. 66
14.              LUXEMBOURG................................................................................................................................................ 69
14.1.      Organisation of the deployment and regulation................................................................................. 69
14.2.      CBA local boundary conditions and scenarios..................................................................................... 69
14.3.      Electricity smart metering deployment rate.......................................................................................... 70
14.4.      CBA outcome.............................................................................................................................................. 70
15.              MALTA................................................................................................................................................................ 72
15.1.      Organisation of the deployment and regulation................................................................................. 72
15.2.      CBA local boundary conditions and scenarios..................................................................................... 72
15.3.      Electricity smart metering deployment rate.......................................................................................... 73
15.4.      CBA outcome.............................................................................................................................................. 73
16.              THE NETHERLANDS..................................................................................................................................... 75
16.1.      Organisation of the deployment and regulation................................................................................. 75
16.2.      CBA local boundary conditions and scenarios..................................................................................... 76
16.3.      CBA outcome.............................................................................................................................................. 77
16.4.      Critical variables – sensitivity analysis................................................................................................... 79
16.5.      Qualitative assessments of non-monetary impacts and new enabled
services.................................. 79
16.6.      Remarks....................................................................................................................................................... 79
17.              POLAND.............................................................................................................................................................. 81
17.1.      Organisation of the deployment and regulation................................................................................. 81
17.2.      CBA local boundary conditions and scenarios..................................................................................... 81
17.3.      Electricity smart metering deployment rate.......................................................................................... 82
17.4.      CBA outcome.............................................................................................................................................. 82
17.5.      Critical variables – sensitivity analysis................................................................................................... 84
17.6.      Remarks....................................................................................................................................................... 84
18.              PORTUGAL....................................................................................................................................................... 85
18.1.      Organisation of the deployment and regulation................................................................................. 86
18.2.      CBA local boundary conditions and scenarios..................................................................................... 86
18.3.      Smart metering deployment rate............................................................................................................. 87
18.4.      CBA outcome.............................................................................................................................................. 87
18.5.      Critical variables – sensitivity analysis................................................................................................... 88
19.              ROMANIA........................................................................................................................................................... 89
19.1.      Organisation of the deployment and regulation................................................................................. 89
19.2.      CBA local boundary conditions and scenarios..................................................................................... 89
19.3.      Electricity smart metering deployment rate.......................................................................................... 91
19.4.      CBA outcome.............................................................................................................................................. 91
19.5.      Critical variables – sensitivity analysis................................................................................................... 92
19.6.      Qualitative assessments of non-monetary impacts and new enabled
services.................................. 92
19.7.      Remarks....................................................................................................................................................... 93
20.              SLOVAKIA......................................................................................................................................................... 94
20.1.      Organisation of the deployment and regulation................................................................................. 94
20.2.      CBA local boundary conditions and scenarios..................................................................................... 94
20.3.      Electricity smart metering deployment rate.......................................................................................... 95
20.4.      CBA outcome.............................................................................................................................................. 96
20.5.      Sensitivity analysis..................................................................................................................................... 97
20.6.      Remarks....................................................................................................................................................... 97
21.              SLOVENIA......................................................................................................................................................... 98
21.1.      Organisation of the deployment and regulation................................................................................. 98
21.2.      CBA local boundary conditions and scenarios..................................................................................... 98
21.3.      CBA outcome.............................................................................................................................................. 99
21.4.      Remarks..................................................................................................................................................... 100
22.              SPAIN................................................................................................................................................................. 101
22.1.      Organisation of the deployment and regulation............................................................................... 101
22.2.      CBA local boundary conditions and scenarios.................................................................................. 101
22.3.      Smart metering deployment rate........................................................................................................... 102
22.4.      CBA outcome............................................................................................................................................ 102
22.5.      Remarks..................................................................................................................................................... 103
23.              SWEDEN........................................................................................................................................................... 104
23.1.      Organisation of the deployment and regulation............................................................................... 104
23.2.      CBA local boundary conditions and scenarios.................................................................................. 104
23.3.      Smart electricity deployment rate........................................................................................................ 105
23.4.      CBA outcome............................................................................................................................................ 105
23.5.      Remarks..................................................................................................................................................... 106
24.              UK....................................................................................................................................................................... 107
24.1.      UK – GB..................................................................................................................................................... 107
24.2.      Organisation of the deployment and regulation............................................................................... 107
24.3.      CBA local boundary conditions and scenarios.................................................................................. 108
24.4.      Smart metering deployment rate........................................................................................................... 109
24.5.      CBA outcome............................................................................................................................................ 109
24.6.      Critical variables – sensitivity analysis................................................................................................ 111
24.7.      Qualitative assessments of non-monetary impacts and new enabled
services............................... 111
24.8.      Data privacy and security....................................................................................................................... 111
24.9.      Remarks..................................................................................................................................................... 112
24.10.   UK-NI.......................................................................................................................................................... 112
24.11.   Organisation of the deployment and regulation............................................................................... 113
24.12.   CBA local boundary conditions and scenarios.................................................................................. 113
24.13.   Smart metering deployment rate........................................................................................................... 114
24.14.   CBA outcome............................................................................................................................................ 114
24.15.   Critical variables – Sensitivity analysis................................................................................................ 117
24.16.   Qualitative assessments of non-monetary impacts and new enabled
services............................... 117
24.17.   Remarks..................................................................................................................................................... 117
ABBREVIATIONS AND ACRONYMS.......................................................................................................................... 118
COUNTRY CODES............................................................................................................................................................ 119
LIST OF TABLES.............................................................................................................................................................. 120
TABLE OF FIGURES....................................................................................................................................................... 120

 

COUNTRY FICHES FOR ELECTRICITY SMART METERING
This
Staff Working Document accompanies the Commission
Report ‘Benchmarking smart metering deployment in the EU’ and presents, specifically for those Member States whose data were
available by July 2013[1], a summary of key parameters of their economic
assessment of long-term costs and benefits for the roll-out of electricity smart
metering in their territory. An overview of the progress to date on the roll-out in Member States, and an analysis of the related costs and benefits across the EU, are included in the respective
Staff Working Document also accompanying the Benchmarking Report.

1.   
AUSTRIA

The
Austrian regulator (E-Control) commissioned a cost-benefit analysis for the
roll-out of smart metering in 2010 which led to a positive result. To this end,
the Ministry of Economy issued a ministerial Decree in 2012 for the electricity
smart metering roll-out.
The
CBA report analyses the long-term costs and benefits of introducing a joint
roll-out of electricity and gas smart meters in Austria and presents its impact
on the main stakeholders, such as consumers, suppliers, system operators and
national economy in general. Despite the joint economic assessment of both
electricity and gas, the CBA report includes separate values on costs and
benefits related to electricity and gas smart metering. In addition,
notwithstanding the existence of minimum functional requirements for gas smart
meters, there is currently no final decision for the roll-out of gas smart
metering.

1.1. 
Organisation of the deployment and regulation

Table 1‑A depicts the smart metering deployment
set-up adopted in Austria. 
Table 1‑A Smart metering deployment set-up and
regulation in Austria 
 AUSTRIA 
 Metering activity || Regulated 
 Deployment strategy || Mandatory roll-out (by decree of the Ministry of Economics) 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing || Metering fees and network tariffs 
The
smart metering deployment is defined as regulated, with minimum requirements
for electricity smart metering set by the National Regulatory Authority
E-Control.  Distribution system operators (DSOs) will be the responsible party
for implementation and ownership and the main link for third-party access to
metering data. Most of the investment costs are covered by the so-called
‘metering tariff’ paid by the electricity customers and regulated by E-Control.
Additional costs (e.g. ICT systems) will be covered by general network tariffs.

1.2. 
CBA local boundary conditions and scenarios

The
economic evaluation includes the definition of four different scenarios for
electricity and smart metering roll-out which vary according to implementation scale
and time frame. These scenarios are:
·       Scenario I – 95% of replacement of all electricity and gas meters
to smart electricity and gas meters. Implementation time frame: 2011-2017.
·       Scenario II – 95% of replacement of all electricity and gas meters
to smart electricity and gas meters. Implementation time frame: smart
electricity meters to be introduced in the period of 2011-2015 and smart gas
meters within 2011-2017.
·       Scenario III - 95% of replacement of all electricity and gas meters
to smart electricity and gas meters. Implementation time frame: smart
electricity meters to be introduced within a period of 2011-2017and smart gas
meters to be introduced within 2011-2019.
·        Scenario IV – 80% of replacement of all electricity and gas meters
to smart electricity and gas meters. Implementation time frame: 2011-2020.
Scenario
II presents the highest net present value (NPV) and envisages the fastest smart
metering implementation along with the highest market penetration (95%). 
Table 1‑B summarises the local
conditions and implementation parameters (e.g. discount rate, roll-out time,
smart metering functionalities, etc.) and the scenarios considered for the
electricity smart metering roll-out. 
Table 1‑B CBA boundary conditions and scenarios in Austria
 CBA BOUNDARY CONDITIONS 
 Scenarios || Scenario I, II, III and IV 
 Metering points in the country || 5.7 mn. 
 Common Minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || Full compliance with the common minimum functionalities of EC Recommendation 2012/148/EU.  Minimum required functionalities set by the Regulator (2011 Ordinance) 
 Implementation speed  || 2012-2019 
 Penetration rate by 2020 || 95% 
 Discount rate || 4.2% 
 Smart metering lifetime || 15 
 CBA Horizon || 15 
 Communication technology || From the smart meter to the data concentrator – 70% PLC and 30% GPRS From the data concentrator to the Data Management System – 100% Fibre Optics  

1.3.  Smart
metering deployment rate

Figure 1‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period. The starting
year refers to the Ministerial decision; however, most of the effective
roll-outs will start later.
Figure
1‑A Smart metering roll-out plan in Austria

1.4. 
CBA outcome

All
four scenarios have a positive outcome. However, scenario II (smart meters'
implementation speed up to 95%, with roll-out of electricity smart meters between
2011 and 2015) represents the highest net present value, indicating the
preference to such an implementation plan over the rest of the scenarios
considered. 
Table 1‑C illustrates the CBA result
referring to Scenario II and includes the range of main benefits and costs
associated with electricity smart metering. 
Table 1‑C Main results of CBA due to electricity
smart metering roll-out in Austria
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn 3195 
 Total Benefit || € mn 3539 
 Cost/metering point (EC calculation) || €590 
 Benefit/metering point (EC calculation) || €654 
 Consumers' benefit (% of total benefits) || 78.5% 
 Main benefits (% of total benefits) || ·         Energy savings - 55% ·         Operational savings due to more efficient supplier switch procedure - 19% (indirect benefits to the consumers) ·         Reduction of DSO associated meter reading cost – 9% 
 Main costs (% of total costs) || OPEX - 30% CAPEX - 26% Indirect costs - supplier associated network balancing costs due to consumer behavioural change - 24% 
 Energy savings (% of total electricity consumption) || 3.5% 
 Peak load shifting (% of total consumption) || 2.5% 
The
main benefits are expected to be realised on the consumer side; in terms of
energy savings they account to 55% of the total gross benefits due to
electricity smart metering roll out (see Figure 1‑B) or to 70% from the total
gross benefits attributed to the consumer only. The rest of the total benefits
are shared among the DSO, suppliers and the society (through increased
efficiency of the deployment set-up). The second highest benefit (19%) due to
more efficient supplier switching procedures is also attributed to consumers. The
higher share of benefits attributed to the DSO is coming from reduced meter
reading cost (9%), whereas suppliers mainly benefit as a result of reduced
balancing costs (due to peak shaving/ load shifting). 
Most
of the direct costs of electricity smart metering roll-out (CAPEX+OPEX) are
attributed to the DSO, as depicted in Figure 1‑C, mainly smart metering
investment, operational, maintenance, IT costs and indirect costs. The energy
suppliers also need to adopt their corresponding IT systems, while at the same
time it is expected that they will incur revenue reductions due to lower
electricity sales (mainly due to changes in the consumer behaviour). However,
energy suppliers may have the greatest potential to offset their costs by
introducing new tariff models.
Figure 1‑B Share of main benefits associated with
electricity smart metering roll-out in Austria
Figure 1‑C Share of main costs associated with
electricity smart metering roll-out in Austria

1.5. 
Remarks

All
four scenarios considered in the long-term assessment of smart metering
implementation in Austria return an overall positive net effect. When the
electricity and gas sectors are considered separately, the net effect is still
positive for each of the scenarios, while consumers are expected to benefit the
most.
In
particular, consumers are likely to enjoy the highest amount of net benefits from
smart metering implementation, through: i) reduced electricity bill as a result
of energy savings (on average 3.5 %) and ii) lower network tariffs due to
improved system operation efficiency. Both benefits will also lead to lower CO2
emissions.

2.   
BELGIUM

In Belgium the competence on energy policy is shared between the federal and the regional
administrations. The central government deals with issues pertaining to
electricity transmission and distribution networks from 70kV up, while the
section of the network below this threshold is under the supervision of
regional administrations. Accordingly, each of the three Belgian regions
(Flanders, Wallonia and Brussels-Capital) has been in charge of their region-specific
cost-benefit analysis (CBA) for the smart metering roll-out. 

2.1.  Flanders - Organisation of the deployment and regulation

The
competent authority for the smart metering roll-out in Flanders is the regional
energy regulator, VREG, while there are two operators: Eandis and Infrax carrying
out the operational tasks for the distribution network operators in the region.
Table 2‑A depicts the smart metering deployment
set-up adopted in Belgium, Flanders region.
Table 2‑A Smart metering deployment set-up and regulation in Belgium - Flanders
 BELGIUM - Flanders 
 Metering activity || Regulated 
 Deployment strategy || N/A (no roll-out yet) 
 Responsible party -implementation and ownership || DSOs 
 Responsible for third-party access to metering data || DSOs 
 Financing || Not decided yet 

2.2.  Flanders - CBA local boundary conditions and scenarios

Two
different CBAs were realised on behalf of VREG from a private contractor: the
first in 2008 and a second one in 2011. The main features of the CBA performed
in 2011 for VREG are reported below. The CBA analysis is based on the following
hypotheses:
·        
Simultaneous roll-out of electricity and gas smart metering;
·        
Penetration rate at the end of the hypothetical roll-out: 98% for
electricity;
·        
Communication infrastructure as communicated by the DSOs (PLC, Multi
Utility Controller (–MUC through GPRS and cable));
·        
Energy savings of 1% for electricity and 2 % for gas, without home
display, and taking into account only the indirect feedback from consumers; and
·        
Roll-out plan completion within 5 years. Note that the CBA takes
into consideration a period of 30 years, therefore it includes the costs for a
second round of meters installation (each meter has an estimated lifetime of 15
years).
The
aforementioned assumptions are all included in the first scenario adopted in
the CBA, the so-called ‘Reference’ scenario. Alternative scenarios have been
developed as well: ‘Spontaneous deployment’, considering a voluntary approach
for rolling out and a final penetration rate of 80%; and ‘Segmented deployment’,
with a deployment spanning over 15 years and rolling out by different customer
segments, one at a time.
Table 2‑B summarises the local
conditions and implementation parameters (e.g. discount rate, roll-out time,
smart metering functionalities, etc.) and the scenarios considered for the
smart metering roll-out. 
Table 2‑B CBA boundary conditions and scenarios in Belgium - Flanders
 CBA BOUNDARY CONDITIONS 
 Scenarios || Reference, Spontaneous deployment, Segmented deployment 
 Metering points in the country || 5.5 mn for both electricity and gas (3.45 mn for electricity only) 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || All recommended functionalities were considered 
 Implementation speed || 5 years, from 2015 to 2019 in the Reference scenario 
 Penetration rate by 2020 || Considered in CBA: 98% 
 Discount rate || 5.50% 
 Smart Metering lifetime || 15 
 CBA Horizon || 30 years, from 2015 to 2045 
 Communication technology || From the smart meter to the data concentrator: 80% PLC – with internet gateway (Eandis customers). The remaining 20% (Infrax customers) are equipped by MUC cable (60%) and MUC GPRS (40%) From the data concentrator to the DMS: Cable or GPRS 

2.3.  Flanders - CBA outcome

Among
the three scenarios considered in the CBA, only the reference scenario results
in a positive net present value (NPV) of €144 mn over 30 years, while the two
alternative scenarios result respectively in a NPV of -€200 mn (spontaneous
deployment 80%) and of -€265 mn (segmented deployment 15 years). The scenario
with the highest NPV is based on a roll-out of smart meters up to 98%
penetration rate, with a hypothetical roll-out between 2015 and 2020. However
the result under the reference scenario is considered to be inconclusive as it
does not yield a strong positive result.
Table 2‑C illustrates the CBA result,
including the range of main benefits and costs associated with electricity
smart metering. 
Table
2‑C CBA outcome in Belgium - Flanders
 CBA OUTCOME || Inconclusive 
 Total Investment || € mn 1932 
 Total Benefit || € mn 2076 
 Consumers' benefit (% of total benefits) || 59% 
 Main benefits (% of total benefits) || Energy savings by indirect feedback (19%) Reduced costs of physical meter reading (17%) Fraud detection (13%) 
 Main costs (% of total costs) || Provision and installation of smart meters (50%) Investment in data communication infrastructure (23%) Investment in data management services (14%) 
 Energy savings (% of total electricity consumption) || 1% with indirect feedback for electricity (2% for gas), 4% for electricity (3% for gas) with direct feedback (only for customers equipped with home displays, a hypothesis not included in the Reference scenario) 
 Peak load shifting (% of total electricity consumption) || 5% 
 Remarks || Simultaneous deployment of gas and electricity smart metering drives costs down (single technical intervention for installation) 
One
of the main benefits included in the CBA is energy savings originating from
indirect feedback (no direct feedback is considered possible without the
provision of home-displays to consumers). This accounts for about 19% of the
total benefits (Figure 2‑A). Similar amounts of
benefits arise from the avoided costs of manual meter reading (17% and from
fraud detection 13%). The highest share of the total benefits, about 60%,
accrues to consumers, with a significant share for DSOs as well. 
The
analysis performed identifies the following stakeholder groups: Consumers,
DSOs, Energy supplier, Energy producers, TSOs, environment and society. Consumers
will benefit most from the introduction of electricity and gas smart meters,
thanks to a gain in energy efficiency of 1% in electricity consumption and 2%
in gas consumption. Positive net effects also accrue to energy suppliers and to
the environment and society.
Figure 2‑A Share of main benefits from electricity smart metering
roll-out in Belgium – Flanders
The main cost items
considered in the analysis are: 
·                    
Investment in setting up a data management system (14%);
·                    
Investment in the necessary telecommunication system (23%); and
·                    
Investment (including procurement and installation) in smart
meters (50%).
Figure 2‑B Share of main costs from electricity smart metering
roll-out in Belgium – Flanders
Almost
90% of the costs expected by a potential smart metering roll-out are attributed
to DSOs, responsible for procurement and installation of the smart meters,
telecommunication infrastructure (in PLC case, to be provided to about 80% of
customers) and appropriate data management system. Half of these costs refer to
the smart meters procurement and installation cost (Figure 2‑B). 

2.4. 
Brussels Capital - CBA
local boundary conditions and scenarios

The
CBA for the region of Brussels capital considers four scenarios, in addition to
a ‘Business as Usual’ situation: ‘Basic model (PLC)’, ‘moderate model (UMTS)’, ‘advanced
model (smart grid)’ and ‘full model (WiMax)’.
Given
the four different scenarios above, the following assumptions have been adopted
in the CBA:

 Simultaneous roll-out of
     electricity and gas smart metering systems;
 Implementation over 4 years,
     starting from 2015;
 Expected meter lifetime of
     15 years;
 Time horizon considered in
     the CBA of 20 years;
 Discount rate of 6.5%;
 Number of metering points is
     increasing over the period considered; 
 The expected energy
     efficiency gains are estimated at about 1.2% in electricity and the same
     in gas (basic scenario);
 Pre-paid meters are not
     considered in any scenario;
 Penetration rate at the end
     of the hypothetical roll-out is not specified (for calculation purposes,
     the Commission assumed a final penetration rate of 100%);
 Communication infrastructure
     is constituted by two systems: a data gathering system and a data
     management system; the latter communicates through PLC or mobile/radio
     networks (GRPS, UMTS, WiMAX, Wi-Fi, Mesh); and
 A specific set of
     functionalities has been identified[2].

The
CBA conducted results in negative net present value (NPV) for all four considered
scenarios: the ‘Basic’ has a NPV of -€142 mn, the ‘Moderate’ of  -€158 mn, the ‘Advanced’
of -€79 mn and the ‘Full’ of  -€142 mn, with an average investment per
installation (which includes both electricity and gas smart metering) ranging
from €267 to €472. Table 2‑D summarises the CBA boundary conditions and scenarios considered
for the electricity smart metering roll-out.
Table
2‑D CBA boundary conditions and scenarios in
Belgium – Region de Bruxelles Capitale
 CBA BOUNDARY CONDITIONS 
 Scenarios || Basic, Moderate, Advanced, Full 
 Metering points in the country || 1 mn. for both electricity and gas (620.000 for electricity only) 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || The functionalities considered in the least negative scenario (Advanced scenario), comply with the recommended except for functionality (b) (real time readings to customers are not considered in the Advanced scenario) 
 Implementation speed || 4 years, from 2015 to 2018 in all scenarios 
 Penetration rate by 2020 || N/A 
 Discount rate || 6.50% 
 Smart Metering lifetime || 15 
 CBA Horizon || 20 years, from 2015 to 2030 
 Communication technology || Depending on scenario: PLC (Basic) UMTS (Moderate, Advanced) WiMAX (Full) 

2.5.  Brussels Capital - CBA outcome

As
mentioned earlier, all four scenarios considered turn out negative. The
scenario with the highest NPV is the ‘Advanced’ scenario, the outcome of which
is summarised in Table 2‑E. 
Table
2‑E CBA outcome (advanced scenario) in Belgium – Region de Bruxelles Capitale
 CBA OUTCOME || Negative 
 Total Investment || € mn 460 
 Total Benefit || € mn 381 
 Consumers' benefit (% of total benefits) || 47% 
 Main benefits (% of total benefits) || Energy savings (46%) Reduced non-technical losses (22%) Field service management (16%) 
 Main costs (% of total costs) || Installation materials and field service (43%) Data transfer and communication (24%) Planned and unplanned maintenance (17%) 
 Energy savings (% of total electricity consumption) || 3.45% quoted for the advanced scenario. (Ranging from 1.2% of total electricity consumption (basic scenario) to 4.6% of total electricity consumption (full scenario) 
 Peak load shifting (% of total electricity consumption) || 0.47% of total benefits (not in electricity consumption) 
 Remarks || The inclusion of advanced features in the smart metering roll-out may imply a higher investment, but also higher benefits 
The
most significant benefit is energy savings accounting for 46% of total benefits
in the advanced scenario, as depicted in Figure 2‑C. The second important
benefit is the reduction of non-technical losses (fraud detection) which
accounts for 22% of total benefits, and the third is the decrease in manual
reading costs (16%). Consumers are expected to enjoy the highest benefit from
the smart metering roll-out, according to the CBA performed.
Figure
2‑C Share of main benefits from electricity smart metering
roll-out – Region de Bruxelles Capitale
The main cost items
considered in the analysis, as also indicated in Figure 2‑D, are: 
·                    
Installation materials and service (43%);
·                    
Data transfer and communication (24%); and 
·                    
Planned and unplanned maintenance (17%)
The
relative high costs of installation material and service in the Region of
Brussels Capital are mainly driven by the necessity to procure tri-phase meters
at 230V without neutral[3]
accounting for about 7% of the total number of meters estimated for year 2015[4].
Other costs are also considered in the respective CBA including costs for
communication and public acceptance campaigns. 
Figure 2‑D Share of main costs from electricity smart metering
roll-out in Belgium – Region de Bruxelles Capitale

2.6.  Wallonia - CBA local boundary conditions and scenarios

In the
Wallonia Region the competent authority for assessing the deployment of smart
metering system is the Commission Wallonne pour l'Energie – CWAPE. A dedicated
CBA for the smart metering roll-out in Wallonia has been realised in 2012. This
CBA also investigates what priority should be given to smart metering roll-out versus
other investments useful for the deployment of smart grids (e.g. incentives to
distributed generation, etc.). For the Wallonia Region, the CBA undertaken
includes three relevant scenarios, of which only the last two are used in the
analysis as the first is the reference scenario:
·        
‘Reference Scenario’, which is not a ‘Business as Usual’ ('do
nothing and nothing happens', 'frozen') scenario, but takes into consideration
the additional interventions needed to ensure the achievement of Renewables
targets according to the 20-20-20 strategy, including reinforcements of DSO
networks.
·        
Scenario 1 ‘Full roll-out’, with 80% of consumers equipped with
smart electricity and gas meters by 2020. 
·        
Scenario 2 ‘Smart meter friendly’, which features a selective
roll-out to specific segments: customers requesting explicitly smart metering and
paying for the installation, new connections, replacements, and consumers with
a bad payment record (installation of prepayment meters).
In
order to carry out the analysis, the following assumptions have been adopted in
the CBA:
·        
Simultaneous roll-out of electricity and gas smart metering;
·        
Implementation: over 5 years for the ‘Full roll-out scenario’,
starting from 2015 and ending in 2019. For the ‘Smart Meter Friendly’ scenario,
a total estimated penetration rate of 15% of total metering points is reached
in 2020;
·        
Expected meter lifetime of 15 years, for communication modules of
7.5 years; 
·        
Time horizon considered in the CBA is 30 years;
·        
Discount rate is 5.5% (WACC);
·        
The communication technology is a mix of PLC and GPRS;
·        
A general increase of 2.5% per annum in electricity demand is
expected over the evaluation period, due to the spread of heat pumps, electric
cars and air conditioning. Inflation effects are taken into account for each
category of costs: material, manpower, energy, etc.; and
·        
9 ‘applications’ are identified as sources of benefits, in order to
carry out a coherent evaluation across all the three scenarios. 
The
results reported are the following: in the ‘Full roll-out’ the net present
value (NPV) is negative (€185.9 mn), while in the ‘Smart Meter friendly’
scenario the NPV is positive (€504.9 mn), and in particular the analysis
underlines that the ‘Smart Meter Friendly’ scenario brings less benefits of
about 20% with reference to the ‘Full roll-out’ scenario, but implies also 75%
less total costs. The table below summarises the CBA boundary conditions and
scenarios considered for the electricity smart metering roll-out.
Table
2‑F CBA boundary conditions and scenarios in Belgium – Wallonia
 CBA BOUNDARY CONDITIONS 
 Scenarios || Full roll-out  Smart Meter Friendly 
 Metering points in the country || 2.6 mn for both electricity and gas (1.9 mn for electricity only) Full roll-out scenario: 80% of metering points equipped with smart meters by 2020 Smart Meter Friendly: 15% smart metering penetration rate by 2020 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || Taken into account as ‘applications’: management of active demand, energy savings, on/off functionality, fraud detection, payment management through pre-paid meters, remote switching, AMR, operational efficiency of the DSO network, AMR of decentralised generation. These applications considered in the CBA, are reported to include all the common minimum functionalities recommended in 2012/148/EU 
 Implementation speed || 5 years, from 2015 to 2019 in all scenarios 
 Penetration rate by 2020 || 80% in the Full roll-out scenario 15% in the Smart meter Friendly 
 Discount rate || 5.50% (WACC) 
 Smart Metering lifetime || 15 years (7.5 for communication module) 
 CBA Horizon || 30 years, from 2012 to 2041 
 Communication technology || From the smart meter to the data concentrator: 80% PLC and 20% MUC+GPRS From the data concentrator to the DMS: GPRS 

2.7.  Wallonia - CBA outcome

The
table below reports results from the ‘Full roll-out’ scenario. This scenario is
the one coherent with the target of 80% smart metering roll-out by 2020. On the
basis of net present value results, the least negative scenario is the ‘Smart
meter Friendly’. However, as the latter does not comply with the 80% target,
the ‘Full roll-out’ can be used for benchmarking purposes with other Member
States’ CBAs data. The results of the ‘Smart Meter Friendly’ scenario are
therefore also indicated in the table below for comparison purposes. It is noted that the respective CBA assumes that there are
no energy savings due to smart metering roll-out as this can be attained also
by other means alone (like more efficient appliances or advanced home energy systems).
However, bill savings due to more active demand side management and load
shifting, were taken into account.  
Table 2‑G CBA outcome in Belgium – Wallonia
   || Full Roll-out scenario || Smart Meter Friendly scenario 
 CBA OUTCOME || Negative || Positive 
 Total Investment || € mn 2232 || € mn 947 
 Total Benefit || € mn 2046 || € mn 1531 
 Consumers' benefit (% of total benefits) || 2.8% || Not available 
 Main benefits (% of total benefits) || a.    Default management (49%) b.    Remote ON/OFF control (15%) c.    Demand side management (13%) d.   Fraud detection (11%) || a.    Default management (64%) b.    Remote ON/OFF control (14%) c.    Demand side management (11% d.   Fraud detection (6%)) 
 Main costs (% of total costs) || e.    Installation (37%) f.     Maintenance (23%) g.    Equipment (16%) || e.    Installation (35%) f.     Maintenance (18% g.     Equipment (15%) 
 Energy savings (% of total electricity consumption) || 0% || 0% 
 Peak load shifting (% of total electricity consumption) || 12% || Not available 
 Remarks || A selective roll-out might imply a lower total investment but also spreading of total costs over a fewer number of meters. 
The
main benefits, as indicated in Figure 2‑E, are related to: 

 Default management, intended
     as better management of bad payers through the introduction of pre-paid
     smart meters (49% of total benefits in the ‘Full roll-out’ scenario). This
     benefit accrues for 96% to the DSO and for 4% to the suppliers.
 Remote on/off control (15%
     of total benefits in the ‘Full roll-out’ scenario). This benefit accrues
     in total to the DSO.
 Demand-side management (13%
     of total benefits in the ‘Full roll-out scenario’). This benefit accrues
     for 22% to consumers, for 49% to the DSO and for 29% to the energy
     supplier.

Figure 2‑E Share of main benefits from electricity smart metering
roll-out
In
the analysis performed, under the ‘Full roll-out’ scenario consumers are the
only stakeholders gaining from the roll-out thanks to demand management (€56
mn). On the other hand, within the ‘Smart meter friendly’ scenario, consumers
have a negative net present value (-€295 mn), as they are expected to bear the
costs of the smart metering installation. In the ‘Full roll-out’ scenario, the
smart metering deployment also implies an increase of the RAB[5] for
the DSO, meaning that a higher remuneration through the network tariff might be
put in place. The total cost for the ‘Full roll-out’ is estimated at €2.2 bn.
The main cost items considered in the analysis are shown in Figure 2‑F: Installation (37,3%),
Maintenance (23%), and Equipment (15,7%). Notably, all major costs reported are
related to the smart meters roll-out itself (76% in total). 
Figure 2‑F Share of main costs from electricity smart metering
roll-out

3.   
CZECH REPUBLIC

The Czech Republic performed in 2012 an economic assessment of long-term costs and benefits
associated with electricity smart metering, with the aim to evaluate the
framework for a cost-effective deployment of intelligent metering and the
respective feasible timeframe.  
Currently,
customers who use electricity for space heating and water heating can make use
of a double-tariff system interlinked with remote control of appliances by ‘district
ripple load control’ (in Czech ‘HDO’). This system is used for direct remote
control of groups of appliances according to the time schedules set, and
reflecting the electricity network load conditions. The HDO system allows
consumers to differentiate between the high and low electricity price level for
the part of electricity load associated with space and water heating. In this
way, the distribution system operators are able to optimise daily load profiles
within a tariff framework approved by the Energy Regulatory Office. 
The cost-benefit
analysis (CBA) of electricity smart metering yields a negative net present
value (NPV) considering the current conditions and price of available
technology. The CBA assumes that nearly 70 % of the potential benefits are
already achieved by the existing system that proved to be robust and secure,
whereas distribution system operators and finally consumers might be burdened
with the costs of rapid implementation of a new system. 

3.1.  Organisation
of the deployment and regulation

Table 3‑A illustrates the metering deployment
set-up to be adopted in the Czech Republic. 
Table 3‑A Smart metering deployment set-up and
regulation in Czech Republic
 Czech Republic 
 Metering activity || Regulated 
 Deployment strategy || No roll-out yet 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || Central hub 
 Financing of the roll-out || NA 
The
Distribution system operator remains the owner and responsible party for smart
meters implementation, whereas a central body (central hub) will be the
eligible link for granting access to metering data.

3.2.  CBA
local boundary conditions and scenarios

The
direct consumption control through the HDO system (district ripple load
control) is based on contractual agreements between the electricity consumers
and the DSO for part of their consumption related with space and water heating
appliances subject to load shedding in periods of peak electricity load (high
tariffs) and shifting to periods of lower electricity consumption (lower
tariff), and in the case of an emergency situation.     
According
to the national CBA, the HDO system allows for easier control and thus more
effective integration of decentralised energy sources (and to greater extent
renewables) and gives an added value to the DSO due to an optimised
distribution network operation (i.e. less technical losses). 
The CBA
considers the current conditions and addresses the HDO system through: i) further
development and adaptation to smart metering system, or ii) complete
replacement by smart metering technology. To this end, two scenarios have been used
for the economic assessment:

 ‘Basic’ (BaU - business as usual) scenario
 ‘Blanket’ scenario 

The
basic scenario preserves the existing status, (i.e. the HDO system), for
consumption and generation management, metering, data processing and billing. The
blanket scenario features installation of smart metering at 100 % consumer
points of delivery. The HDO system and its functionalities is still considered
in the blanket scenario. As long as the smart metering does not completely
substitute the current HDO functions, it is assumed that the HDO system will be
operated concurrently with the smart metering system.
All
results provided in the sections below relate to the blanket scenario which is
compared to the basic scenario (BaU). Table 3‑B summarises the local
conditions and implementation parameters (e.g. discount rate, roll-out time,
smart metering functionalities, etc.) and the scenarios considered for the
electricity smart metering roll-out. 
Table 3‑B CBA boundary conditions and scenarios in Czech Republic
 CBA BOUNDARY CONDITIONS 
 Scenarios || Basic scenario; Blanket scenario with penetration rate  100 % at completion of smart metering roll-out 
 Number of metering points in the Country || 5.7 mn. 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || All recommended functionalities considered 
 Implementation speed  || 2020 – 2026 [6] 
 Penetration rate by 2020 || 1% final penetration rate as there is no plan to roll-out yet. 100 % penetration rate considered for the purposes of the CBA 
 Discount rate || 6.1 % 
 Smart Metering lifetime || 12 years 
 CBA horizon || 26 years 
 Communication technology || PLC communication infrastructure from the smart meter to the data concentrator:, GPRS (or any other applicable wireless technology) only where it is not possible to use PLC GPRS+fibre optics from the Data Concentrator to the Data Management System 

3.3.  CBA
outcome

Table 3‑C illustrates the result of
the economic assessment performed, including the range of main benefits and
costs associated with electricity smart metering and referring to the blanket scenario.
The figures on costs and benefits reported below present non-discounted values.

Table
3‑C CBA outcome in Czech Republic
 CBA OUTCOME || NEGATIVE 
 Total Investment || € mn. 4367[7] 
 Total Benefit || € mn. 2735[8] 
 Cost/metering point (as communicated by the Member State) || €766 
 Benefit/metering point (as communicated by the Member State) || €499 
 Consumers' benefit (% of total benefits) || 21 % of external benefits[9] (€ mn. 16.7) 0.6 % of total benefit 
 Main benefits (% of total benefits)[10] || Reduced commercial losses (53%) Peak load transfer (42%) Deferred generation capacity investments (5%) 
 Main costs (% of total costs) || Procurement of smart meters (24%) ICT investments (10%) ICT operation cost – meter reading (9%) 
 Energy savings (% of total electricity consumption) || 0 % 
 Peak load shifting (% of total electricity consumption) || 1.2 % of household segment consumption 
One
of the main benefits expected to be realised as a result of smart metering
deployment (and not currently fully exploited under the HDO system) is the
reduction of commercial losses and peak load transfer, as shown in Figure 3‑A. Procurement and
installation of smart meters along with ICT investments present the highest
share of the cost burden associated with smart metering roll-out (Figure 3‑B). 
Figure 3‑A Share of main benefits associated with
electricity smart metering roll-out
Figure 3‑B Share of main costs from electricity
smart metering roll-out

3.4.  Critical
variables – sensitivity analysis

The
sensitivity analysis performed as part of the CBA showed that only the
variation of absolute electricity savings could shift the net present value (NPV)
value into positive[11].
However, as indicated in the CBA, the achievement of such savings under current
conditions in the Czech Republic is not feasible. Additionally, combination of
several parameters, such as the CAPEX of smart meters and their installation,
CAPEX of the ICT infrastructure (including the DTS accessories), CAPEX of the
DSO data centre and energy savings could lead to a net present value equal to zero.


3.5. 
Remarks 

The national
economic evaluation concludes that there is no business case for implementation of smart metering in
the Czech Republic in the presence of the currently operating HDO system, under
which most of the benefits expected from smart metering are argued as already
achieved.  Furthermore, the CBA states that, additional benefits can be
attained by complementing the existing system with new, and wider offer of, tariff
schemes without additional costs in technology, and in particular, through the
introduction of price response mechanisms based on a voluntary change of
consumer consumption patterns. Moreover, the local analysis concludes that if
the social dimension of the smart metering becomes central to the roll-out, it would
lead to higher consumer engagement and more favourable environment for a
nation-wide smart metering deployment. 
Therefore,
the national CBA study proposes the following: 

 Smart metering
     implementation (Blanket scenario) should not commence before 2018; it is
     necessary to continue operation and technological development in the
     framework of pilot projects.
 Extend the ability of the
     current HDO system by adding tariffs without direct control of appliances,
     i.e. based on sending tariff signals to customers together with
     encouraging more customers to participate in HDO system using wider offer of
     tariff schemes.
 Continuously follow the technological
     development in the field of smart networks and metering; in particular
     from the viewpoint of parameters’ development and prices of key
     components, which are important for decision-making and thus commencing
     the smart metering preparation and realisation. 
 Set national communication
     standards, standards of metering devices and major smart metering system
     elements, along with technical and legal norms to ensure the
     cyber-security of the system by 2017.
 Assess applicability and
     effectiveness of the smart metering by 2017.
 Based on the evaluation of
     the smart metering pilot projects and impact of possible extension of the
     current HDO system, elaborate the implementation plan of smart metering
     roll-out by 2018 as a part of a wider project of smart grids
     implementation in the Czech Republic.


4.   
DENMARK

An
updated economic evaluation of long-term costs and benefits was finalised in
2013, covering 1.38 million metering points and resulting in a positive
outcome. There are already 1.63 million metering points where a smart meter is
installed following a voluntary roll-out led by the distribution system
operators (DSOs). 
A
recently introduced law (June 2013) mandates the full smart metering roll-out.
The detailed framework of the roll-out will be set by the Minister for Climate,
Energy and Building[12].
The roll-out will be carried out by the DSOs from 2014 through to 2020.   

4.1. 
Organisation of the deployment and regulation

The
metering deployment set-up in Denmark is regulated with the DSO being the owner
and responsible party for the smart metering implementation, as shown in Table 4‑A. The main link for granting
access to metering data will be through central hub and the roll-out will be
financed via network tariffs. 
Table 4‑A Smart electricity metering deployment
set-up and regulation in Denmark
 DENMARK 
 Metering activity || Regulated 
 Deployment strategy || Mandatory roll-out 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || Central hub 
 Financing of the roll-out || Network tariffs 

4.2. 
CBA local boundary conditions and scenarios

The
economic analysis, carried out for the roll-out of electricity meters which are
read remotely every hour (the associated billing is also provided on an hourly
base), considered the following scenarios:

 Complete roll out (3 scenarios):
  ‘Baseline’ scenario with complete roll out
  ‘Conservative’ scenario, characterised by:
   No energy or grid-loss savings;
   No shifts in consumption;
   No savings in reserves/regulating power; and
   Increased meter price
  ‘Progressive’ scenario, characterised by:
   More electric vehicles; and
   Increased service life of electricity meters
 ‘Selective’ roll out:
  To metering points with electric vehicles; and

o   To metering points with heat pumps
Table 4‑B summarises the local
conditions and implementation parameters (e.g. discount rate, roll-out time,
smart metering functionalities, etc.) and the scenarios considered for the
electricity smart metering roll-out. 
Table
4‑B CBA boundary conditions in Denmark
 CBA BOUNDARY CONDITIONS 
 Scenarios || Complete roll out: Baseline scenario with complete roll-out; Conservative scenario, Progressive scenario Selective roll-out 
 Number of metering points in the Country || 3.28 mn. (The CBA covers 1.38 mn; the rest are already fitted with a smart meter) 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || All meters installed after new regulation entered into force in 2011 comply with the minimum functionalities of the Commission Recommendation. Regarding functionality (b), previously installed meters still reflect electricity consumption readings, available to the consumers, on an hourly base. (The basis for the CBA was hourly billing, but the requirement for new meters will be 15 min readings). 
 Implementation speed  || 2014-2020 
 Penetration rate by 2020 || 100% 
 Discount rate || 5% 
 Smart metering lifetime || 10 years 
 CBA horizon || 10 years 
 Communication technology || PLC, GPRS/GSM, WiFi and RF 

4.3. 
CBA outcome

Table 4‑C illustrates the CBA result,
including the range of main benefits and costs associated with electricity
smart metering and considering the Baseline scenario with complete roll-out. Figures
for ‘Cost per metering point’ and ‘Benefit per metering point’ have been
calculated and communicated by the Member State, as the conducted CBA analyses
only investments and benefits for a given year, and not for the whole roll-out
period.
Table 4‑C CBA outcome in Denmark
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 310 
 Total Benefit || € mn. 322 
 Cost/metering point (as communicated by the Member State) || €225 
 Benefit/metering point (as communicated by the Member State) || €233 
 Consumers' benefit (% of total benefits) || Not available 
 Main benefits (% of total benefits) || Saved metering investment (29%) Increased competition (21%) Energy savings (16%) 
 Main costs (% of total costs) || CAPEX (67%) Tax distortion loss (8%) OPEX (4%) 
 Energy savings (% of total electricity consumption) || 2% 
 Peak load shifting   (% of total electricity consumption) || 8.4% 
Figure 4‑A and Figure 4‑B show the main benefits and
costs, respectively, associated with electricity smart metering deployment. 
Figure 4‑A Share of main benefits associated with
electricity smart metering roll-out
Figure
4‑B Share of main costs associated with
electricity smart metering roll-out

4.4.  Critical
variables – sensitivity analysis

The
socio-economic value of the electricity smart metering roll-out appeared to be
particularly sensitive to two parameters: the capital cost of the electricity
meters and the penetration of consumers who will switch to hourly measured
electricity consumption.

4.5.  Qualitative
assessments of non-monetary impacts and new enabled services 

Despite
the quantifiable benefits of smart metering systems deployment, the Danish CBA
considers also the following non-monetary impacts:  

 Time-of-use network tariffs
     – in addition to the spot electricity prices differences, price
     differences for time-of-use grid tariffs could be included in the analysis;
 Security of the energy
     supply – due to price responsive electricity load;
 Network capacity deferral;
 Increased competition -
     hourly billing, based on a partial roll-out, will create a fragmented
     market that will be less transparent than a market with the matching frameworks
     since some geographical areas will have remotely-read meters and others
     will not. That would mean that the areas with remotely-read meters would have
     weaker competition than other areas. 
4.6.  Remarks

The
results of the economic evaluation have shown a socio-economic benefit for
getting the rest of the 1.38 million metering points hourly metered and for successfully
implementing a billing system which makes it possible to invoice all customers on
hourly consumption readings. 
A
separate analysis has been conducted for electric vehicles and heat pumps. The
results indicate that hourly metering and billing for electric vehicles and
heat pumps are socio-economically viable. The flexible demand will reduce price
spikes, postpone grid investments and provide additional ancillary services,
and therefore, offset the costs for electricity meters, enhanced billing and
investments in automated control of electricity consumption.    

5.    ESTONIA

Estonia is proceeding with a nation-wide roll-out of electricity smart
metering systems following the positive results of the economic evaluation of respective
long-term costs and benefits. 

5.1. 
Organisation of the deployment and regulation

The
metering activity in Estonia, as in most Member States, is regulated (Table 5‑A). Under this set-up the DSO
is the owner and responsible party for smart meters implementation. The
responsibility of third-party access to metering data is granted to a central
hub.
Table 5‑A Smart electricity metering deployment
set-up and regulation in Estonia
 ESTONIA 
 Metering activity || Regulated 
 Deployment strategy || Mandatory roll-out 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || Central hub 
 Financing of the roll-out || Network tariffs 

5.2.  CBA
local boundary conditions and scenarios

Table 5‑B summarises the local
conditions and implementation parameters (e.g. discount rate, roll-out time,
smart metering functionalities, etc.) and the scenarios considered for the
electricity smart metering roll-out. 
Table
5‑B CBA boundary conditions in Estonia
 CBA BOUNDARY CONDITIONS 
 Scenarios || Not available 
 Number of metering points in the Country || 709000 
 Common minimum functionalities (as proposed by the EC Recommendation 2012/148/EU)    || Partly complying with the second functionality (functionality (b)): Meter readings are on an hourly base (instead of 15min) Compliance with the rest of the functionalities 
 Implementation speed  || 2013-2017 
 Penetration rate by 2020 || 100% 
 Discount rate || 6.67% 
 Smart metering lifetime || 15 years 
 CBA horizon || NA 
 Communication technology || PLC – 90% GPRS – 10% 

5.3.  Smart
metering deployment rate

Figure 5‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period. 
Figure
5‑A Electricity smart metering roll-out plan
in Estonia

5.4. 
CBA outcome

Table 5‑C illustrates the result of
the economic evaluation, including the range of main benefits and costs
associated with electricity smart metering. 
Table 5‑C CBA outcome in Estonia
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 110 
 Total Benefit || € mn. 191 
 Cost/metering point (EC calculation) || €155 
 Benefit/metering point (EC calculation) || €269 
 Consumers' benefit (% of total benefit) || Not available 
 Main benefits (% of total benefit) || Network losses reduction Avoided investments Avoided meter operating costs (repair and maintenance costs of metering systems) 
 Main costs (% of total costs) || Operating costs Maintenance cost of central operating system Cost of tele-service 
 Energy savings (% of total electricity consumption) || Not available 
 Peak load shifting (% of total electricity consumption) || Not available 

6.   
FINLAND

An
economic analysis was carried out in 2008 focusing mainly on the potential of
electricity demand elasticity rather than assessing the economic benefits and
costs of smart metering roll-out. The industry had voluntarily started a
widespread roll-out already in the early 2000’s. The Finnish government
mandated a smart metering roll-out for 80% of meters until 2014, but nearly 97%
penetration of smart-meters was expected by the end of 2013. However, after
completion of the DSOs roll-out projects, the penetration will be close to 100
%.

6.1.  Organisation
of the deployment and regulation

The metering
activity in Finland is regulated (Table 6‑A). Under this set-up, the distribution
system operator (DSO) is the responsible party for smart metering
implementation and for granting third-party access to metering data.  
Table 6‑A Smart electricity metering deployment
set-up and regulation in Finland
 FINLAND 
 Metering activity || Regulated 
 Deployment strategy || Mandatory roll-out 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || Network tariffs 

6.2. 
CBA local boundary conditions and scenarios

Table 6‑B illustrates the result of
the economic evaluation, including the range of main benefits and costs
associated with the electricity smart metering roll-out. 
Table
6‑B CBA boundary conditions and scenarios in Finland
 CBA BOUNDARY CONDITIONS 
 Scenarios || No scenario analysis.   
 Number of metering points in the Country   || 3.3 mn. 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Compliance with functionality (a); customers have the possibility to order (at an extra cost) metering equipment with separate output installation for real time readings. Partly complying with functionality (b), as electricity consumption data are communicated on an hourly base.   
 Implementation speed  || 2009-2013 
 Penetration rate by 2020 || designed for 97% but actually reaching closer to 100 % 
 Discount rate || Not available 
 Smart metering lifetime || 15 – 25 years 
 CBA horizon || 15 years 
 Communication technology || PLC – 30 % GPRS – 60 % RF – 10 % 

6.3. 
Smart metering deployment rate

Figure 6‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period. Penetration of
97% is expected by the end of 2013 as some of the DSOs had not yet finalised at
the time of writing their roll-out project. By 2015, the smart metering
penetration rate will be almost 100%.
Figure 6‑A Electricity smart metering roll-out plan
in Finland

6.4. 
CBA outcome

The
economic evaluation of long-term costs and benefits was carried out in 2008 and
therefore the costs and benefits reported in Table 6‑C are based on that smart
metering roll-out appraisal (performed in 2008). The evaluation was mainly
focused on finding the prerequisites for demand side response and therefore a
comprehensive analysis of benefits of smart meters was not carried out.  
Table 6‑C CBA outcome in Finland
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 692 
 Total Benefit || Not available 
 Cost/metering point (EC calculation) || €210 
 Benefit/metering point (EC calculation) || Not available 
 Consumers' benefit (% of total benefits) || Not available 
 Main benefits (% of total benefits) || ·       Demand side management ·       DSO cost reduction (due to remote reading) ·       Electricity trade and new services 
 Main costs (% of total costs) || ·       Meters costs (40-55%) ·       Accessories for the meters (relays, switching gears, etc.) 5-25% ·       Installation and maintenance (10-25%) ·       Communications (5-40%) 
 Energy savings (% of total electricity consumption) || 1-2% 
 Peak load shifting (% of total electricity consumption) || 2% 

6.5. 
Remarks

In
addition to the DSOs, the retail market has also greatly benefitted from the
new meters. Remote reading possibility eases the supplier switching procedures
and gives consumers tools to better control their consumption. After the
installation of smart meters the billing has been based on the actual hourly
consumption. The customers can choose their tariff programme, while there are
several suppliers offering tariffs based on hourly pricing. The same hourly
measurement data is also used for the balance settlement. Finland is therefore
one of the first to utilise this kind of accuracy in the electricity retail
market, reducing the imbalance risks for the electricity retailers and enabling
different pricing schemes to emerge. Also services based on the new meters are
developing, and it is reported that there are already companies providing
active demand side management of selected loads.
It
is stipulated in the law that the consumption data is measured and stored on an
hourly basis and that the meter should be read once a day. Most of the newest
meters installed are capable of storing data also in 15 minutes intervals but
the internal memory does not usually allow for such frequent readings. Changing
this in retrospect would be costly as in effect the whole meter would have to
be changed. All the meters should have an output terminal where the customer
can connect a monitoring screen with instantaneous consumption readings. However,
in the case of apartment blocks, technical difficulties and associated costs
should be considered for the installation of monitoring screens inside each
apartment, due to the fact that usually the meters are situated in the common
switchgear room of the building. 
In
contrast to other countries, data security has not been a great concern of the general
public. Even though the smart meters have been widely used for almost a decade
in Finland, there have been no major incidences regarding data security.  
Based
on the Finish experience, various issues should be considered in order to run a
smooth installation schedule and achieve customer acceptance. In this context, it
is important to train electricians who carry out the actual installation of the
meters so as to be ready to address any customer requests. Also, good
communication during installation is essential for the acceptance of the
roll-out by the consumers.

7.   
FRANCE

A
financial Cost-Benefit Analysis (CBA) has been carried out based on the outcome
of the pilot project Linky.[13]
Two scenarios have been considered by the Regulator in its evaluation, in
respect to electricity tariffs:
·       Scenario 1: Annual average tariffs increase of 2.3% from 2010 to
2020 and 1.8% after 2020; and
·       Scenario 2: Annual average tariffs increase of 5.75% from 2010 to
2020 and 1.8% after 2020
The CBA
outcome was almost financially neutral for the first scenario and positive for
the second. The economic evaluation of the project focused on costs and
benefits of the distribution system operator (DSO). Following this assessment
and based on the fact that smart metering will empower consumers and support
grid stability, the regulator gave his recommendation to proceed with a
national roll-out.

7.1.  Organisation
of the deployment and regulation

The metering
activity in France is regulated and the DSO is the owner and responsible party
for the meters installation (Table 7‑A). Also, the DSO is the
eligible body for granting third-party access to metering data, however,
strictly upon customers' agreement. 
Table 7‑A Smart electricity metering deployment
set-up and regulation in France
 FRANCE 
 Metering activity || Regulated 
 Deployment strategy || Mandatory roll-out 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO (according to French law, access to metering data for third parties must be agreed on by network users) 
 Financing of the roll-out || N/A 

7.2. 
CBA local boundary conditions and scenarios

Table 7‑B summarises the local
conditions and implementation parameters (e.g. discount rate, roll-out time,
smart metering functionalities, etc.) and the scenarios considered for the
electricity smart metering roll-out. 
Table 7‑B CBA boundary conditions and scenarios in France
 CBA BOUNDARY CONDITIONS 
 Scenarios || Scenario 1 and scenario 2   
 Number of metering points in the Country || 35 million 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Compliance for all recommended functionalities reported by the Member State[14]   
 Implementation speed  || 2014-2020 
 Penetration rate by 2020 || 95% 
 Discount rate || Not available 
 Smart metering lifetime || 20 years 
 CBA horizon || Not available 
 Communication technology || PLC 

7.3.  Smart
metering deployment rate

Figure 7‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period. 
Figure 7‑A Electricity smart metering roll-out plan
in France

7.4. 
CBA outcome

Table 7‑C illustrates the result of
the economic evaluation, including the range of main benefits and costs
associated with electricity smart metering. 
Table 7‑C CBA outcome in France 
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 4500 
 Total Benefit (€ mn) || Not available – The value depends on the assumptions used, especially regarding the future development of services for data management, the sensitivity of consumers to demand management tools, etc.) 
 Cost/metering point (EC calculation) || €135 
 Benefit/metering point (EC calculation) || Not available 
 Consumers' benefit (% of total benefit) || Benefit not quantitatively evaluated. However, the analysis shows net benefit to the consumers. 
 Main benefits (% of total benefits) || ·       Avoided investment in installing existing meters: 30% of total benefits (attributed to the DSO) ·       Avoided network losses: 25% (attributed to the DSO) ·       Avoided meter reading costs: 15% (attributed to the DSO) 
 Main costs (% of total costs) || ·       Meters (procurement and installation) : 80%, ·       Data concentrators (procurement and installation) : 10% ·       IT system : 10%  
 Energy savings (% of total electricity consumption) || Not available 
 Peak load shifting (% of total electricity consumption) || Not available 

7.5.  Critical
variables – sensitivity analysis

The
result of the CBA outcome associated with the electricity smart metering
roll-out appeared to be particularly sensitive to the following parameters: 

 Average meter installation time and
     installation rate;
 Number of data concentrators; and
 Functional operation of the G3-PLC technology.
7.6. 
Remarks

The
net present value (NPV) of the Linky project is based on the difference between
the costs and benefits of carrying out the project and those of not carrying
out the project (i.e. ‘business as usual’). The estimated benefits are the
investment or operating expenses avoided, whereas the additional costs are the
extra costs generated by the project. The result of the performed CBA indicates
nearly balanced outcome in scenario 1 (+ EUR 0.1 billion) and positive outcome
in scenario 2 (+ EUR 0.7 billion). 
The
universal deployment of the Linky smart meter system will entail the
installation of 35 million meters, or of about 2 to 7 million meters per year,
which will take place in two stages:

 First deployment stage of 7
     million meters between 2013 and 2015
 Second deployment stage of
     28 million meters over four years (7 million meters per year).


8.   
GERMANY

The cost-benefit
analysis (CBA) conducted (finalised July 31st 2013) advocates a
roll-out in Germany which is tailored to the technology and compliant with the
national energy reforms. The CBA does not recommend a large-scale roll-out for
smart metering (at least 80% of all consumers by 2020) as costs of smart
metering systems for final users with low levels of annual consumption  would
far outweigh the average potential of annual energy savings. 
The
current legislative approach encourages smart metering roll-out for the
following cases: i) consumers with annual electricity consumption over 6000
kWh; ii) major generation facilities pursuant to the national Renewable Energy
Sources Act and the Combined Heat and Power Act, and iii) final consumers in
new and renovated buildings. 
For
the rest of the cases, it is recommended to use intelligent meters – an
upgradeable measuring system in accordance with Section 21c(5) of the national
Energy Act (EnWG) with no external communication link. Combined with a
certified smart meter gateway, they can be extended to a BSI[15] Protection Profile-compliant
smart metering system and thus securely integrated into any communication
system. 

8.1.  Organisation
of the deployment and regulation

A
competitive metering deployment set-up is supported in Germany, where the DSO is the owner and responsible party for the smart metering implementation
(Table 8‑A). However, the consumer is
entitled to the possibility of choosing a third party as meter operator. The Smart
Meter Gateway Administrator (SMGA) is the responsible party for granting
third-party access to metering data. The role of the SMGA is generally assigned
to the meter operator. 
Table 8‑A Smart electricity metering deployment
set-up and regulation in Germany
 GERMANY 
 Metering activity || Competitive 
 Deployment strategy || No decision yet 
 Responsible party -implementation and ownership || Metering point operator (can be the DSO) 
 Responsible for third-party access to metering data || Metering point operator (can be the DSO) 
 Financing of the roll-out || No decision yet 

8.2. 
CBA local boundary conditions and scenarios

The
economic assessment of long-term costs and benefits associated with the smart
metering roll-out in Germany considers the following scenarios:

 The ‘EU Scenario’ – it reflects
     the EU requirement to provide smart metering systems for at least 80% of
     all consumers by 2020 (which may be subject to a positive CBA as stated in
     the Electricity Directive 2009/72/EC). 
 The ‘Continuity Scenario’ (‘Business-as-usual’)
     – reflects 25% of metering points equipped with smart metering systems by
     2022 under the current regulatory framework. It indicates a mandatory
     installation in the following cases:
  For electricity consumers
      with annual consumption of over 6000 kWh and operators of RES plants with
      a connected capacity of over 7 kW; and
  In new and renovated
      buildings.
 ‘Continuity Scenario Plus’ –
     it considers installation of intelligent meters[16] instead of, or
     in addition to, the installation of smart metering systems. The
     intelligent meters must offer the possibility of integration into a BSI
     Protection Profile-compliant communication system. The same scenario
     allows for a comprehensive roll-out of smart metering systems by 2029,
     whereas by 2022 the proportion will be 1/3 smart metering systems and 2/3
     intelligent meters. 
 ‘Roll-out Scenario’ – it focuses
     on the integration of renewable energies. Under the current legal
     framework, the obligation to install smart metering systems applies only
     to new RES and CHP with a contracted power of at least 7 kW. This scenario
     extends the mandatory installation of smart metering systems to old
     RES/CHP plants as well as to the ones with less than 7 kW, down to a
     threshold of 250 Watt.  
 ‘Roll-out Scenario Plus’ – it
     is an extended ‘Roll-out Scenario’ that includes the installation of
     intelligent meters along with the mandatory installation of smart metering
     systems, as described in the previous scenario. 

Table 8‑B illustrates the local
conditions and main parameters used for the economic assessment of smart
metering roll-out in Germany associated with the ‘roll-out scenario plus’.    
Table 8‑B CBA boundary conditions in Germany 
 CBA BOUNDARY CONDITIONS 
 Scenarios || Continuity scenario; Continuity scenario Plus; EU scenario, Roll-out scenario, Roll-out scenario plus 
 Number of metering points in the Country || 47.9 mn., of which: 11.9 million (2022) to be equipped with Smart Metering 15.8 million (2032) to be equipped with Smart Metering 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Compliance for all the functionalities, except on functionality g), there is no decision yet 
 Implementation speed  || 2014-Not available[17] 
 Penetration rate by 2020 || 23 % (by 2022) 31 % (by 2032) 
 Discount rate || 5 % (for cash flows of commercial stakeholders) 3.1 % (for cash flows of the end consumers and of the distribution system operator (DSO)) 
 Smart metering lifetime || 13 years 
 CBA horizon || 20 years (2012-2032) 
 Communication technology || Market based GPRS/UMTS/LTE – 80 % PLC/BPL – 20 % DSL – 5 % Fibre-optics – 5 % 

8.3.  Smart
metering deployment rate

Figure 8‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period and refers to the
Continuity Scenario. 
Figure
8‑A Electricity smart metering roll-out plan
in Germany

8.4. 
CBA outcome

Table 8‑C illustrates the main outcome
of the economic assessment of long-term costs and benefits carried out and
referring to the Roll-out Scenario Plus.
Table 8‑C CBA outcome in Germany 
 CBA OUTCOME || POSITIVE (for the Roll-out Scenario Plus) NEGATIVE for the EU scenario 
 Total Investment || € mn. 6493 (by 2022) € mn. 14466 (by 2032) 
 Total Benefit || € mn. 5865 (by 2022) € mn. 16968 (by 2032) 
 Cost/metering point (as communicated by the Member State) || € 546 
 Benefit/metering point as communicated by the Member State) || € 493 
 Consumers' benefit (% of total benefits) || 47% 
 Main benefits (% of total benefits) || ·       Energy savings - 33% ·       Load shifting - 15% ·       Avoided investments in the distribution grid - 13% 
 Main costs (% of total costs) || ·       Investments smart metering systems (meter, gateway, communication infrastructure) - 30% ·       Communication costs - 20% ·       IT-costs - 8% 
 Energy savings (% of total electricity consumption) || 1.2% 
 Peak load shifting (% of total electricity consumption) || 1.3% in average between 2014 and 2022 2.9% in 2032 
Figure 8‑B and Figure 8‑C show the share of main
benefits and costs, respectively, associated with the smart metering systems
roll-out.
Figure 8‑B Share of main benefits associated with
electricity smart metering roll-out
Figure 8‑C Share of main costs associated with
electricity smart metering roll-out
 

8.5.  Critical
variables – sensitivity analysis

The
economic assessment of long-term costs and benefits associated with smart
metering deployment considers the following parameters for performing the
sensitivity analysis, based on the Roll-out Scenario Plus:  

 Energy savings;
 Electricity price;
 Grid efficiency;
 Halving the EEG (Renewable
     Energy Source Act) compensation payments for limitation of RES feed-in
     capacity;
 Delayed mandatory
     installation from the past;
 Optimisation of the
     organisational structure;
 Expansion of mandatory
     installations to further consumer groups;
 Changes in mandatory
     installations for new and renovated buildings;
 Consideration of heat pumps,
     electric vehicles and other controllable energy applications;
 Telecommunication
     infrastructure;
 Extension of the deadline
     for mandatory installations and replacement interval; and
 Provision of value added
     services. 
8.6. 
Remarks

The
CBA conducted by a private consulting firm (finalised the July 31st
2013) advocates a roll-out in Germany which is tailored to the technology and
compliant with Germany’s energy reforms. It does not recommend a large-scale roll-out
of smart metering systems targeting all (or at least 80% of) households by
2020. Based on the analysis performed, in the case of final users with low
levels of annual consumption, the costs of a smart metering system would far
outweigh the average potential annual energy savings. The authors of the CBA
report believe that compulsory installation would be disproportionate and would
represent an unacceptable economic burden. Instead, in the view expressed in
the CBA, the current legislative approach, which provides for a roll-out to high-consumption
end-users, operators of major generation facilities pursuant to the Renewable
Energy Sources Act and the Combined Heat and Power Act, and final consumers in
modern buildings, should be resolutely further developed. All renewable energy
and cogeneration facilities, as well as controllable consumption units pursuant
to Section 14a of the Energy Industry Act (e-mobility, night storage heaters
and heat pumps), should be included. Such a roll-out would make sense, as
argued in the national CBA, in overall economic terms if it could
simultaneously achieve various beneficial effects (e.g. improvement in energy
efficiency, improvements in processes, avoidance of need to expand the grid due
to active feed-in management, and optimisation of grid planning and operation).
For all other installation cases, the report recommends the use of upgradable
meters (digital electricity meter protected by protection profile which can be
upgraded into a metering system compliant with the protection profile). 
The
German Federal Ministry of Economics and Technology announced, at the moment of
writing this Staff Working Document, that it will give associations and
consumer representatives the opportunity to discuss the findings of the study
with its authors. Afterwards, Germany will define its roll-out strategy after checking
which recommendations of the conducted CBA can be implemented. Business
associations and consumer representatives will have the opportunity to discuss
the findings of the study with the authors via the Grid Platform's Smart Meter
Working Group. 

9.   
GREECE

The
economic assessment of long-term costs and benefits associated with the smart
metering roll-out was initially conducted in June 2010 and then revised in
August 2012. The results presented hereinafter refer to the revised economic
assessment under the scenario of ‘Electricity Meters Only with DLC LV’.

9.1. 
Organisation of the deployment and regulation

The metering
activity in Greece is regulated and the DSO is the owner and responsible party
for the meter installation and for granting third-party access to metering data
(Table 9‑A). 
Table
9‑A Smart electricity metering deployment
set-up and regulation in Greece 
 GREECE 
 Metering activity || Regulated 
 Deployment strategy || Mandatory 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || Information not available 

9.2. 
CBA local boundary conditions and scenarios

The
reference scenario for the cost-benefit analysis (CBA) conducted was the electricity
smart metering roll-out only with main communications technology PLC (Power
Line Communication) to data concentrators and GPRS (General Packet Radio
Service) from concentrators to back-office (Data Management System). For areas
of low density (assumed to be 10% of the meter population), the technology
opted for the appraisal was low power radio (mesh) with GPRS to the
back-office. 
In
summary, six scenarios were used in the assessment, as follows: 

 Implementation of Automated
     Metering Infrastructure (AMI) using a combination of Power Line Carrier
     (PLC) and General Packet Radio Service (GPRS) or fibre optics
     communications media over the Low Voltage and Medium Voltage network; 
  electricity only option 
  electricity and gas option.
 Implementation of Automated
     Metering Infrastructure (AMI) using a combination of Distribution Line
     Carrier (DLC) and General Packet Radio Service (GPRS) communications media
     over the Low Voltage network;
  electricity only option 
  electricity and gas option.
 Implementation of AMI using
     optical fibre networks to be provided by OTE in Athens, Thessaloniki and
     urban centres up to 8000 inhabitants; and a combination of Mesh technology
     and GPRS in areas and islands where optical fibre is not planned for
  electricity only option 
  electricity and gas option.

Table 9‑B illustrates the local
conditions and main parameters used for the economic assessment of smart
metering roll-out in Greece associated with the reference scenario (i.e.
electricity meters only with PLC over Low Voltage (LV)/Medium Voltage (MV) networks)
Table
9‑B CBA boundary conditions in Greece 
 CBA BOUNDARY CONDITIONS 
 Scenarios || Six scenarios considered (see above) Preferred scenario: Electricity meters only with PLC over LV/MV networks 
 Number of metering points in the Country || 7 mn. 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Compliance reported with all recommended functionalities 
 Implementation speed  || 2014-2020 
 Penetration rate by 2020 || 80% 
 Discount rate || 8% 
 Smart metering lifetime || 15 years 
 CBA horizon || 25 years 
 Communication technology || From the smart meter to the data concentrator: PLC (for the reference scenario) From the data concentrator to the DMS: PLC (for the reference scenario) 

9.3.  Smart
metering deployment rate

Figure 9‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period. 
Figure 9‑A Electricity smart metering roll-out plan
in Greece

9.4. 
CBA outcome

Table 9‑C illustrates the main
outcome of the economic assessment of long-term costs and benefits carried out
and referring to the scenario of ‘electricity meters only with PLC over LV/MV
networks’.
Table
9‑C CBA outcome in Greece 
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 1733 
 Total Benefit || € mn. 2443 
 Cost/metering point (EC calculation) || €309 
 Benefit/metering point (EC calculation) || €436 
 Consumers' benefit (% of total benefits) || 80.7% 
 Main benefits (% of total benefits) || ·       Consumption reduction - direct feedback (44%) ·       Meter reading savings (14%) ·       Carbon benefits (11%) 
 Main costs (% of total costs) || ·       Procurement and installation of meters (55%) ·       Display costs (20%) ·       Communication infrastructure – PLC (9%) 
 Energy savings (% of total electricity consumption) || 5% 
 Peak load shifting (% of total electricity consumption) || 5% 
Figure 9‑B and Figure 9‑C illustrate the main
benefits and costs, respectively, associated with the electricity smart
metering roll-out in Greece. 
Figure 9‑B Share of main benefits associated with
electricity smart metering roll-out
Figure
9‑C Share of main costs associated with
electricity smart metering roll-out

9.5.  Critical
variables – sensitivity analysis

The
outcome of the national electricity smart metering deployment appears to be
particularly sensitive to the following parameters: 

 Amount of energy savings –
     variation from 3% to 7% could lead to negative net present value in the
     second scenario (electricity and gas smart metering deployment with PLC); 
 Discount rate;
 Capital costs for meters and
     displays; 
 Appraisal (discounting)
     period;
 Duration of the smart
     metering roll-out programme;
 Electricity, gas and CO2
     price changes were included in the sensitivity analysis; 
 The labour force costs; and
 Cost of IHD (in-home
     display)

The
amount of energy savings and the value of the discount rate are the two
parameters that trigger the larger variations in the overall net present value
(NPV) in all cases.

9.6.  Qualitative
assessments of non-monetary impacts and new enabled services

A
number of other benefits are likely to be accrued with the smart electricity
roll-out since it paves the way to the transition to smart grids, therefore
enabling a set of opportunities as provided below: 

 Management of distributed
     (and micro) generation; 
 Demand response benefits;
 Easier integration of energy
     storage and electric vehicles in the electricity system; and
 Provision of new energy
     services to the consumers.  
9.7.  Remarks 

Results
from the national cost-benefit study on the roll-out of smart metering indicate
that there is a positive business case for Greece when it comes to rolling out
smart metering in their territory. Out of the selected technologies, the fibre
option outperforms the rest since it utilises communications infrastructure
that would be installed in the country regardless of the outcome of the smart
metering roll-out. This solution is argued in the national study to be a proven
technology, the most 'future-proof’, and able to achieve the highest speeds and
bandwidth than the other two solutions considered. From the PLC options, the
option that utilises the Medium Voltage network is more cost-efficient than the
DLC option, mainly due to less communication costs. However, this might be the
slowest solution with relatively limited bandwidth. Consumers are expected to
gain the largest share of benefits due to the possibility for an enhanced
management of their energy consumption and potential for electricity bill
reduction. 
From
the sensitivity analysis undertaken, it is clear that the most sensitive
parameter is the assumption on the amount of electricity savings due to
feedback from in-home displays. This clearly indicates that household consumers
will need to be well-informed, accept the new technology, and actively engage
in it so as to achieve maximum benefits from the programme. This requires a
co-ordinated approach from different institutions, like electricity retailers,
the respective Ministry of Environment, Energy and Climate Change, the General
Secretariat of the Consumer, the Regulatory Authority for Energy and others. 

10.          
IRELAND

The
economic assessment of long-term costs and benefits associated with smart
metering roll-out was performed in May 2011 and had a positive outcome. To this
end, Ireland has laid out plans for a large-scale smart metering roll-out. 

10.1.    Organisation of the deployment and regulation

The metering
activity in Ireland is regulated and the distribution system operator (DSO) is
the owner and responsible party for the meter installation and for granting
third-party access to metering data (Table 10‑A).
Table
10‑A Smart electricity metering deployment
set-up and regulation in  Ireland 
 IRELAND 
 Metering activity || Regulated 
 Deployment strategy || Mandatory 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || Network tariffs 

10.2.   
CBA local boundary conditions and scenarios

The ‘business
as usual’ (counterfactual) scenario covers the costs that will be incurred if
the roll-out of smart metering would not proceed, namely:

 Unsaved benefits in meter
     reading, meter replacement and meter operations;
 Unsaved benefits in
     postponing future network reinforcement; and
 Normal digital meters
     installed for new connections and special keypad type meters installed for
     prepay.

Furthermore,
the counterfactual scenario assumes increased frequency of meter readings (in
absence of smart meters) from 4 readings per annum to 6 or 12 annual readings
per customer. In addition to the counterfactual scenario, the Irish Commission
for Energy Regulation (CER) identified 12 high level smart metering national roll-out
options, as illustrated in the table below. 
Table
10‑B Smart electricity metering roll-out
options in Ireland
   Option ||   Billing Baseline ||   Billing Scenario ||   Comm's ||   In-Home Display 
 Option 1 || Bi-monthly || Bi-monthly || PLC-RF || No 
 Option 2 || Bi-monthly || Bi-monthly || PLC-RF || Yes 
 Option 3 || Bi-monthly || Monthly || PLC-RF || No 
 Option 4 || Bi-monthly || Bi-monthly || PLC-GPRS || No 
 Option 5 || Bi-monthly || Bi-monthly || PLC-GPRS || Yes 
 Option 6 || Bi-monthly || Monthly || PLC-GPRS || No 
 Option 7 || Bi-monthly || Bi-monthly || GPRS || No 
 Option 8 || Bi-monthly || Bi-monthly || GPRS || Yes 
 Option 9 || Bi-monthly || Monthly || GPRS || No 
 Option 10 || Monthly || Monthly || PLC-RF || No 
 Option 11 || Monthly || Monthly || PLC-GPRS || No 
 Option 12 || Monthly || Monthly || GPRS || No 
The
table below illustrates the local conditions and main parameters used for the
economic assessment of smart metering roll-out in Ireland associated with the
reference scenario (i.e. electricity meters only with PLC over Low Voltage (LV)/Medium
Voltage (MV) networks).
Table 10‑C CBA boundary conditions and scenarios for
smart electricity metering roll-out in Ireland
 CBA BOUNDARY CONDITIONS 
 Scenarios || Twelve scenarios (options) considered in the CBA Preferred scenario: Option 2   
 Number of metering points in the Country || 2.2 million 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Compliance for all the functionalities reported by the Member State[18]   
 Implementation speed  || 2014-2019 
 Penetration rate by 2020 || 100% 
 Discount rate || 4% 
 Smart metering lifetime || 17 years 
 CBA horizon || 21 year (2011-2032) 
 Communication technology || PLC/RF 

10.3.    Smart metering deployment rate

Figure 10‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period. 
Figure 10‑A Electricity smart metering roll-out plan
in Ireland

10.4.    CBA outcome

Table 10‑D illustrates the main
outcome of the economic assessment of long-term costs and benefits carried out
and referring to the aforementioned option 2. 
Table
10‑D CBA outcome for electricity smart
metering roll-out in Ireland
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 1040  (DSO related cost) 
 Total Benefit || € mn. 1212 
 Cost/metering point (EC calculation) || €473 
 Benefit/metering point (EC calculation) || € 551 
 Consumers' benefit (% of total benefits) || Not available 
 Main benefits (% of total benefits) || ·       Energy savings ·       Deferred capacity investment and reduction in SMP ·       Suppliers savings (fewer complaints and queries, less costly management of bad payers and supplier switch savings) 
 Main costs (% of total costs) || ·       DSO costs (CAPEX+OPEX) ·       Supplier costs (Improved billing system and customer education, running more complex set of bills and tariffs) 
 Energy savings (% of total electricity consumption) || 2.9% 
 Peak load shifting (% of total electricity consumption) || 9.9% 

10.5.   
Critical variables – sensitivity analysis

The
estimated total net present values for the 12 options considered in the
cost-benefit analysis performed are generally positive. If these results were
borne out in an actual deployment of smart metering, the project would bring
about substantial net benefits for Ireland in comparison with the base case
scenario. PLC-RF communications show higher net benefits than the other
technologies examined, although the difference to PLC-GPRS may depend upon the
value of key parameter assumptions. The attractiveness of GPRS communications
depends strongly on the assumed cost of network services and, to a lesser extent,
on the perceived need to build in compatibility with more advanced
communication standards.
Turning
to the informational stimuli, bi-monthly billing with no IHD exhibits consistently
the highest total net present value, but the margin is only € 4 mn. compared to
the next best option (bi-monthly billing with an IHD). 
Important
sources of variation in estimated net present values arose from assumptions
about the expected pattern of residential demand response, the level of
additional billing system OPEX by suppliers and network costs such as the costs
of meters, meter installation and IHDs. Most other sensitivity tests on network
cost items showed modest effects. 
The
project’s viability does not appear to be particularly sensitive to the assumed
discount rate.

10.6.    Qualitative assessments of non-monetary impacts and new enabled
services

There
are a number of potential costs and benefits from a national roll-out of
electricity smart metering that are very difficult to put a robust quantifiable
estimate on, and can only be qualitatively assessed. Such elements include the
following potential costs and benefits:

 Facilitation of a smarter
     electricity network, or ‘smart grid’, in Ireland that will assist in
     efficiently managing the greater levels of renewable generation on the
     system;
 Facilitation of a greater
     uptake of micro generation;
 Facilitation of electric
     vehicles (EVs);
 Facilitation of gas smart
     metering;
 Facilitation of water smart
     metering; and
 Facilitation and/or
     synergies with a smart grid implementation, and integration of micro
     generation, electric vehicles, gas smart metering and water smart metering
     systems.
10.7.    Remarks 

The
estimated total net present values for the 12 main national smart metering roll-out
options analysed are generally positive and remain positive under the
sensitivity analyses run. Each option combined different parameters for
billing, communication and IHD, which allows drawing interesting conclusions
and providing a sufficient combination of options for the actual implementation
of the system.  
PLC-RF
communications solution shows higher net benefits than the other technologies
examined, although the difference to PLC-GPRS may depend upon the value of key
parameter assumptions. 
Regarding
the information stimuli provided to the final consumers, bi-monthly billing
with no IHD consistently exhibits the highest total net present value; however
the margin is only €4m compared to the next best option (bimonthly billing with
an IHD) under Tariff A[19].

11.          
ITALY

The largest
Italian distribution system operator (DSO) ENEL Distribuzione carried out an
internal CBA to assess long-term costs and benefits before proceeding to the large-scale
roll-out of smart metering systems in 2001. The figures for a nation-wide
roll-out in Italy are obtained by extrapolating the figures from this first
exercise, covering about 85% of metering points in Italy.

11.1.   
Organisation of the deployment and regulation

The metering
activity in Italy is regulated and the DSO is the owner and responsible party
for smart metering implementation and granting third-party access to metering
data, as indicated in Table 11‑A. 
Smart
metering deployment on ENEL's meters started already in 2001 and was completed
in 2006. During the same year and in the following, the national regulatory
authority (Autorita per l'Energia Elettrica ed il Gas) defined the legal
framework for mandatory roll-out to all metering points in the Country (and
therefore also to other DSOs).
Table
11‑A Smart electricity metering deployment
set-up and regulation in Italy
 ITALY 
 Metering activity || Regulated 
 Deployment strategy || Voluntary + Mandatory 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || DSO resources for the very first years + Metering tariffs since 2004 

11.2.   
CBA local boundary conditions and scenarios

Table 11‑B presents the local
conditions and the main parameters considered for the economic assessment of long-term
costs and benefits associated to smart metering roll-out.  
Table
11‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Italy
 CBA BOUNDARY CONDITIONS 
 Scenarios || Not available   
 Number of metering points in the Country || 36.7 million 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Compliance with all the functionalities (at the moment partly for functionality (b)) of the smart metering systems, as drafted in the Recommendation of 2012/148/EU. Regarding compliance with functionality (b): The metering data can be accessed through local interface (Enel smart info®) that can be connected by the customer in every domestic socket. This interface is already available and it is currently being provided in large pilot projects. With the Enel smart info® final customers can monitor their consumption data collected every 10 min and achieved in real time[20] upon customer request.   
 Implementation speed  || 2001-2011 
 Penetration rate by 2020 || 99% 
 Discount rate || 4.5% 
 Smart metering lifetime || 15-20 years 
 CBA horizon || Not available 
 Communication technology || Smart meter-DC: PLC DC-DMS: GSM/GPRS 

11.3.   
CBA outcome

Table 11‑C illustrates the main
outcome of the economic assessment of long-term costs and benefits carried out
in Italy.
Table
11‑C CBA outcome for electricity smart
metering roll-out in Italy
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 3400 
 Total Benefit || € mn. 6400 (only DSO benefit) 
 Cost/metering point (EC calculation) || €94 
 Benefit/metering point (EC calculation) || €176 
 Consumers' benefit (% of total benefits) || Not available 
 Main benefits (% of total benefits) || ·         Revenue protection (including reduction of non-technical losses) ·         Reduction of meter reading and operations costs ·         Purchasing and logistics ·         Customer service (e.g. invoicing, bad debts management) 
 Main costs (% of total costs) || ·         95% of CAPEX is associated with the production and installation of smart meters and concentrators. ·         The remaining 5% corresponds to costs associated with IT system development, R&D costs and other expenses. 
 Energy savings (% of total electricity consumption) || Not available 
 Peak load shifting (% of total electricity consumption) || Not available 

11.4.   
Remarks

The
Enel’s Telegestore® project was a voluntary project, bringing
forward the large-scale smart meters installation programme in Italy and paving the way towards smart grids. Recognizing the benefits of implementing
smart metering, in 2006 the Italian Regulatory Authority (AEEG) set the
mandatory installation of smart meters in Italy, with minimum functional
requirements for all the DSOs and Low Voltage customers starting from 2008 and
reaching 95% penetration rate in 2011. This allowed Italy to meet the EU target
for 80% of households, on the positively assessed cases, to have smart meters,
well ahead of 2020.
Over
the course of years that Telegestore was implemented, the Italian electricity
sector was moving towards a liberalised market, with the distribution and
transmission parts of the business still subject to regulation and the rest of
the business open to competition. Since the beginning of the liberalisation process,
energy retailers offered competitive and differentiated schemes in order to
attract customers, and were reportedly facilitated in that by the responsible DSOs.
Fully deployed smart metering systems are considered to have played a pivotal
role in accelerating the market liberalisation process. Switching from one
retailer to another, as well as changing the tariff structure or other
contractual parameters became a remotely managed operation, consisting of new
configurations to be stored in the central system and to be remotely programmed
on the meters.
Smart
metering also played an important role in the activation of new tariffs defined
by the energy regulator for customers who preferred to remain in the regulated
market instead of the liberalised one, supporting time-of-use with the aim of harmonising
consumption and limiting peaks in demand. To this regard, in 2010 AEEG set the
introduction of mandatory Time-of-Use tariffs for residential customers under
the universal supply regime, which was possible because of the large-scale installation
of smart meters. In addition, the Regulator introduced a new service for the
protection of vulnerable consumers enabled by smart metering. While in the past
bad payers were fully disconnected, they are now allowed for a ‘minimum vital
service’ (0.5 kW) for 2 weeks before full disconnection. Further, when the debt
is settled after disconnection, they can be reactivated almost instantaneously
after the payment. 
The
experience gained in the deployment of electricity smart metering can be
exploited also by other utilities (such as gas, water, etc.) to support the
evolution of smart metering in other sectors. In this respect it is noted that:
·        
In
2008 the National Regulatory Authority introduced obligations for deployment of
gas smart metering (currently target is at 60% by 2018 for smaller gas
customers, whilst remote reading is already implemented for medium and large
size gas customers (regulatory decision no. 155/2008);
·        
Furthermore,
the National Regulatory Authority has recently launched a call for
demonstration projects for multi-service smart metering pilots, encompassing
gas, water, electricity and other ‘smart city’ applications (mobility services,
urban waste collection, etc. (regulatory decision n. 393/2013).

12.          
LATVIA

The Latvian competent authority for smart metering is the Ministry
of Economics, Energy Department, Division of energy markets, infrastructure and
coordination of cooperation. 
A
cost-benefit analysis for the intelligent metering deployment has not been made
available to the Commission services. The data shown below are those reported
by the national authorities responsible for following smart metering issues.

12.1.   
Organisation of the deployment and regulation

The metering activity in Latvia is set up as a regulated market, and the DSO is to remain the
owner and responsible party for the meter, including smart meter, installation
and for granting third-party access to the respective metering data. The
financing will be ensured through network tariffs.
Table 12‑A Smart metering deployment set-up and
regulation in Latvia
 LATVIA 
 Metering activity || Regulated 
 Deployment strategy || Not available (no roll-out yet) 
 Responsible party -implementation and ownership || DSOs 
 Responsible for third-party access to metering data || DSOs 
 Financing || Network Tariffs 

12.2.    CBA local boundary conditions and scenarios

The
outcome of the analysis is negative for a large-scale roll-out, but it is reported
that in the near future installation of definite amount of smart meters could
be mandatory; in fact a roll-out of up to 23% of total metering points in the
country by 2017 is currently foreseen.
Table 12‑B CBA boundary conditions and scenarios in Latvia 
 CBA BOUNDARY CONDITIONS 
 Scenarios || Not available 
 Metering points in the country || 1089109 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Full compliance to recommended functionalities is reported 
 Implementation speed || 3 years, from 2015 to 2017 (for a roll-out of up to 23% of total metering points) 
 Penetration rate by 2020 || 23% 
 Discount rate || 6.6% for years 2015 – 2017 6.8% for years 2018-2019 6.9% fir tears 2020-2024 
 Smart metering lifetime || 12 
 CBA Horizon || 10 years, from 2015 till 2024 
 Communication technology || 100% of communication technology adopted from the smart meter to the concentrator is PLC 100% of technology adopted from the data concentrator to the data centre is GSM 

12.3.    CBA outcome

The
CBA performed considers a period from 2015 to 2024. The result for a large-scale
roll-out is negative, although Latvia will proceed with the roll-out to specific
customer segments.
Table
12‑C CBA outcome in Latvia
 CBA OUTCOME || Negative 
 Total Investment || € mn. 75.6 
 Total Benefit || € mn. 4.44 
 Cost/metering point (EC calculation) || €302 
 Benefit/metering point (EC calculation) || €18 
 Consumers' benefit (% of total benefits) || 2% - 5% 
 Main benefits (% of total benefits) || Energy savings (57%) Savings on personnel costs for DSO (24%) CO2 reduction (11%) 
 Main costs (% of total costs) || Cost of Smart Metering (32% Cost of communication infrastructure (16%) Installation cost (8%) 
 Energy savings (% of total electricity consumption) || 2% - 5% 
 Peak load shifting (% of total electricity consumption) || Not available 
Figure 12‑A and Figure 12‑B show the main benefits and
costs, respectively, associated with the electricity smart metering roll-out in
  Latvia. The main benefits considered in the CBA are energy savings and
savings due to avoided manual meter readings. It is not possible to proceed
with a detailed analysis of beneficiaries from the roll-out plan, as the detailed
CBA has not been made yet available for analysis (at least at the moment of
writing this Staff Working Document). The only benefit identified is that for
consumers, which is estimated within a range of 2% to 5%, i.e. the consumers’
benefit equals the expected energy savings. For comparison purposes it is
preferable that energy savings are accounted in terms of total electricity
consumption (GWh), and consumers’ benefit is expressed as part of the total
benefit (estimated in euros). In the absence of further information to this
respect, it is unclear what the consumers’ benefit represents.
Regarding
costs, the Latvian assessment identifies as main costs those directly related
to the smart meters’ roll-out: about 1/3 of the whole investment is for the
procurement of smart meters. However, a significant amount of costs (44%) are
reported to come from other sources, which cannot be identified as the CBA is
not yet available for consultation.
Figure 12‑A Share of main benefits from electricity smart metering
roll-out
Figure
12‑B Share of main costs from electricity smart metering
roll-out

12.4.    Remarks 

The
evaluation for smart metering roll-out in Latvia argues that peak load
shaving/load shifting benefit is not relevant and therefore has not been
assessed, as most consumers have rather small energy consumption. In addition,
it is reported that no tariff differentiating peak and off-peak hours is
available. 

13.          
LITHUANIA
13.1.    Organisation of the deployment and regulation

The
competent authority in Lithuania for the smart metering roll-out is the
Ministry for Energy. The Ministry has established a dedicated working group on ‘Defining
the Smart Grid Development Direction’ in 2009 and selected an external
consultant to perform a cost-benefit analysis (CBA).
Table
13‑A Smart metering deployment set-up and
regulation in Lithuania
 LITHUANIA 
 Metering activity || Regulated 
 Deployment strategy || Not available (no roll-out yet) 
 Responsible party -implementation and ownership || DSOs 
 Responsible for third-party access to metering data || DSOs 
 Financing || Network Tariffs 

13.2.    CBA local boundary conditions and scenarios

The
CBA identified three relevant scenarios to evaluate the impacts of smart
metering roll-out in Lithuania: 1) ‘Base case’; 2)‘Advanced functionality’; and
3) ‘Multi metering scenario’. 
The
least negative is the ‘Base case’ scenario, characterised by: 

 meters featuring basic
     functionalities;
 a communication technology
     based exclusively on PLC (from the meter to the concentrator) and GPRS
     (from concentrator to data aggregator); and 
 the mandatory set-up of a
     Time of Use pricing. 

This
scenario (as the ‘Multi-metering scenario’) entails a roll-out to 80% of all consumers
by 2020, while the scenario ‘Advanced Functionality’ entails a roll-out to 100%
of consumers. In the ‘Advanced Functionality’ and the ‘Multi-metering’
scenario, the provision of a in-home display is included among the hypotheses
for the analysis.
It
should be noted that the Lithuanian case has some specificities[21] that affect the results: the
average consumption per household (and consequently the average electricity
bill) in Lithuania are among the lowest in EU, and transmission and
distribution networks have significant spare capacity.
Table
13‑B CBA boundary conditions and scenarios in Lithuania 
 CBA BOUNDARY CONDITIONS 
 Scenarios || Base case, Advanced Functionality, Multi-metering scenario 
 Metering points in the country || 1.6 mn. 
 Common Minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || The functionalities considered in the CBA are reported to be compliant with the recommended. 
 Implementation speed || 5 years, from 2014 until 2020 
 Penetration rate by 2020 || 80% considered in the CBA Not available – the expected roll-out rate by 2020 
 Discount rate || 5.5% for the CBA (5% in the financial analysis) 
 Smart metering lifetime || 15 
 CBA Horizon || 2011 – 2029 
 Communication technology || PLC and GPRS from the meter to the concentrator GPRS from the concentrator to the data centre 

13.3.    CBA outcome

The
CBA performed considers a period from 2011 till 2029. The sensitivity analysis
showed that significant changes in the key variables, such as the electricity
price, are likely to also impact the CBA results.
Table
13‑C CBA outcome in Lithuania
 CBA OUTCOME || Negative 
 Total Investment || € mn. 254 
 Total Benefit || € mn. 128 
 Cost/metering point (as communicated by the Member State) || €123 
 Benefit/metering point (as communicated by the Member State) || €82 
 Consumers' benefit (% of total benefits) || 26% 
 Main benefits (% of total benefits) || ·         Energy savings (26%) ·         Reduction of non-technical losses (22%) ·         Load shifting (14%) 
 Main costs (% of total costs) || ·         Smart Meters procurement (38% ·         Smart Meters installation (18%) ·         Data concentrators procurement (8%) 
 Energy savings (% of total electricity consumption) || 2.3% 
 Peak load shifting (% of total electricity consumption) || 4.5%[22] 
Figure 13‑A and Figure 13‑B show the main benefits and
costs, respectively, associated with the electricity smart metering roll-out in
  Lithuania. The main benefits considered in the CBA are energy savings and reduction
of commercial losses, as indicated in Figure 13‑A. The analysis features a
detailed estimation of benefits for each customer segment: household urban,
household rural, commercial under 30kW, commercial over 30 kW. About one third
of the total metering points need three-phase meters. According to the analysis
performed, the consumers are the most important beneficiaries from the smart
metering roll-out. No detailed analysis is provided on the impact of smart
metering on DSOs, the environment and an account of the positive effects on the
process towards a higher participation in the electricity markets and towards
integration of renewable energy sources.
Figure
13‑A Share of main benefits associated with
smart metering roll-out
Concerning costs, the
Lithuanian CBA identifies the smart meters costs as main costs of the roll-out,
as depicted in Figure 13‑B.
Figure 13‑B Share of main costs from electricity smart metering
roll-out

14.          
LUXEMBOURG

According
to national law, each network operator must ensure that at least 95 % of
electricity customers connected to the network are equipped with a smart
metering system by 31/12/2018. The technical standards or functionalities of
smart meters have not yet been set at the moment of writing the present Staff
Working Document, however a public consultation is still on-going and the
regulator will set these specifications early 2014 at the latest. The modified
laws of August 1st, 2007 set that the general roll-out of smart
metering systems will start by July 1st, 2015.  A detailed cost-benefit
analysis (CBA) has not been made available. The data shown below have been
provided by the national authorities following smart metering activities.

14.1.   
Organisation of the deployment and regulation

The metering
activity in Luxembourg is regulated, and the distribution system operator (DSO)
is the owner and responsible party for smart meter installation and for
granting third-party access to metering data (Table 14‑A).
Table
14‑A  Smart electricity metering deployment set-up and
regulation in Luxembourg
 LUXEMBOURG 
 Metering activity || Regulated 
 Deployment strategy || Mandatory 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || Network tariffs 

14.2.   
CBA local boundary conditions and scenarios

Table 14‑B presents the local
conditions and the main parameters considered for the economic assessment of long-term
costs and benefits associated to smart metering roll-out.  
Table
14‑B CBA boundary conditions and scenarios for smart electricity
metering roll-out in Luxembourg
 CBA BOUNDARY CONDITIONS 
 Scenarios || Not available 
 Number of metering points in the Country || 260 000 
 Common Minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || No information available regarding compliance of smart metering functionalities with the recommended common minimum functionalities (namely (a), (b), (f), (g), (i) and (j)). Compliance reported for the rest of the functionalities. 
 Implementation speed  || 2015-2018 
 Penetration rate by 2020 || 95% 
 Discount rate || 8.5% 
 Smart metering lifetime || 20 years 
 CBA horizon || 20 years 
 Communication technology || PLC, GPRS 

14.3.    Electricity smart metering deployment rate 

There
is no specific smart metering roll-out timeline, except the requirement of 95%
smart metering deployment by 2018.  

14.4.   
CBA outcome

Table
14‑C illustrates
the main outcome of the economic assessment of long-term costs and benefits
carried out in Luxembourg.
Table
14‑C CBA outcome for electricity smart
metering roll-out in Luxembourg
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 35 
 Total Benefit || € mn. 40 
 Cost/metering point (EC calculation) || €142 
 Benefit/metering point (EC calculation) || €162 
 Consumers' benefit (% of total benefits) || 17% 
 Main benefits (% of total benefits) || Reduced meter reading and operating cost Reduced energy consumption Non-replacement of old meter 
 Main costs (% of total costs) || Meter cost Meter installation cost Investment and operating cost of common IT infrastructure 
 Energy savings (% of total electricity consumption) || 3.6% 
 Peak load shifting (% of total electricity consumption) || 5% 

15.          
MALTA

An
economic assessment of long-term costs and benefits for the implementation of smart
metering was not carried out in Malta and is therefore not available. The main driver for the smart metering
deployment has been the need to reduce non-technical requirement for bi-monthly
billing and billing errors.
Firstly
a voluntary roll-out for smart metering systems was launched by Enemalta (the distribution
system operator - DSO) and started in 2009 with a pilot phase, followed by a
mandatory roll-out to all consumers which commenced in 2010 with the main aim
to reduce the costs of bi-monthly billing and non-technical losses.  Over
180000 smart meters out of a total of 260000 meters have been replaced and it
is expected that the deployment will be completed by 2014. 

15.1.   
Organisation of the deployment and regulation

The metering
activity is Malta is regulated with the DSO having the responsibility to
implement and grant third-party access to metering data (Table 15‑A). 
Table
15‑A Smart electricity metering deployment set-up and regulation
in Malta
 MALTA 
 Metering activity || Regulated 
 Deployment strategy || Voluntary + Mandatory 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || Network tariffs[23] 

15.2.   
CBA local boundary conditions and scenarios

Table 15‑B presents the local
conditions and the main parameters considered for the economic assessment of long-term
costs and benefits associated with smart metering roll-out.  
Table 15‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Malta
 CBA BOUNDARY CONDITIONS 
 Scenarios || Not available (No detailed CBA available) 
 Number of metering points in the Country || 260 000 
 Common Minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || Partly compliance with the recommended smart metering functionalities (a), (g) and (i); Compliance reported with the rest of the functionalities 
 Implementation speed  || 2009-2014 
 Penetration rate by 2020 || 100% 
 Discount rate || Not available, no CBA 
 Smart metering lifetime || 11 years 
 CBA horizon || Not available 
 Communication technology || PLC and GPRS 

15.3.    Electricity smart metering deployment rate 

Figure 15‑A illustrates
the electricity smart metering deployment rate throughout the roll-out period. 
Figure 15‑A Electricity smart metering roll-out plan
in Malta

15.4.   
CBA outcome

Table 15‑C illustrates
the main outcome of the economic assessment of long-term costs and benefits
carried out and communicated directly by the Maltese authorities, as no national
CBA has been conducted.
Table
15‑C Key data for electricity smart metering roll-out in Malta
 OUTCOME || POSITIVE 
 Total Investment || € mn. 20 (CAPEX only) 
 Total Benefit || Not available 
 Cost/metering point (EC calculation) || €77 (considering CAPEX only) 
 Benefit/metering point (EC calculation) || Not available 
 Consumers' benefit (% of total benefits) || Not available 
 Main benefits || Customers benefits: ·         Accurate bills ·         No need to wait for the meter reader ·         Energy plan to fit the consumption pattern ·         Consumer engagement  through better consumption information ·         Energy savings and peak load shifting Utility's benefit ·         Precise bills ·         Consumption history ·         Better network planning ·         Meter reading cost reduction ·         Reduction of losses, thefts and fraud ·         Management of bad payers ·         Evidence of service rendered to consumer 
 Main costs || Not available 
 Energy savings (% of total electricity consumption) || 5% 
 Peak load shifting (% of total electricity consumption) || Not available 

16.          
THE NETHERLANDS

The
first economic assessment of long-term costs and benefits associated with a nation-wide
joint deployment of electricity and gas smart metering was based on the 2005
study mandated by the Ministry of Economic Affairs. The economic assessment
resulted in a positive net present value (NPV) of approximately 1.3 billion
euro.
After
this assessment, issues of political, economic and technical context were
further considered, as well as different aspects such as: energy efficiency; data
protection/security measures; additional functional requirements; introduction of
smart grids; and other benefits for the consumer.
These
aspects pointed to the need for a revised cost-benefit analysis in 2010 in
order to gain an insight into the consequences of the changed circumstances
with respect to the business case for the introduction of smart metering in the
  Netherlands. In addition to this, and in line with the proposal of billing
amendment, the consumers have been granted with the possibility to refuse the
smart meter or to opt using one, under one of the three settings:
·      ‘Administrative off’[24];
·      Standard reading (bi-monthly reading); 
·      Detailed reading. 

16.1.    Organisation of the deployment and regulation

The metering
activity in the Netherlands is regulated, and the DSO has the responsibility to
implement the smart metering systems and grant third-party access to metering
data. However, the supplier has also access to metering data since it is the
responsible party for collecting and validating the metering data (Table 16‑A).
Table 16‑A Smart electricity metering deployment
set-up and regulation in Netherlands
 NETHERLANDS 
 Metering activity || Regulated 
 Deployment strategy || Mandatory with opt-out 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO[25] 
 Financing of the roll-out || Network tariffs 

16.2.    CBA local boundary conditions and scenarios

The
reference scenario (almost 100% smart meter acceptance as well as almost 100%
standard readings) refers to a positive business case with a net present value
of 770 million euro. It includes the following assumptions and it is characterised
by these conditions:  

 All smart meters are read as
     standard (once every two months);
 A small percentage of
     consumers (2%) will refuse the smart meter and will be given a traditional
     meter and 80% of the smart meters will be read via PLC and 20% via GPRS;
 In the case of new
     construction and renovations it is compulsory to install a smart meter.
     Nevertheless, the consumer can have the smart meter treated as a
     traditional meter by registering it as ‘administrative off’. In this case,
     the consumer himself does still have access to accurate metering data
     however, the consumer cannot be remotely disconnected;  
 The In-Home Display is not
     considered as part of the smart meter;
 Only indirect feedback is considered
     on the energy usage – energy usage and indicative cost overview is sent
     once every two months (80% of the consumers opt for a digital statement);
 Timeline of 8 years is
     considered for the smart metering roll-out – 2 years trial period
     (2012-2013) followed by a further roll-out of the smart metering
     infrastructure over the next 6 years until the end of 2020;
 Positive net present value
     of 770 million euros; and
 Payback period 15 years.

Table 16‑B illustrates the local
conditions and the main parameters considered for the economic assessment of long-term
costs and benefits associated to electricity and gas smart metering roll-out in
the Netherlands. 
Table
16‑B  CBA boundary conditions and scenarios for smart metering
roll-out in Netherlands
 CBA BOUNDARY CONDITIONS 
 Scenarios || Reference scenario 
 Number of metering points in the Country || 7.6 mn. (electricity) + 7.6 mn. gas 
 Common Minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || Full compliance with the recommended functionalities. 
 Implementation speed  || 2012-2020 
 Penetration rate by 2020 || 100%[26] 
 Discount rate || 5.5% 
 Smart metering lifetime || 15 years 
 CBA Horizon || 50 years 
 Communication technology || PLC and GPRS 

16.3.   
CBA outcome

Table 16‑C illustrates the main
outcome of the economic assessment of long-term costs and benefits carried out
in the Netherlands and associated with electricity and gas smart metering .
Table
16‑C  CBA outcome for electricity smart metering roll-out in Netherlands
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 3340 (electricity+gas) 
 Total Benefit || € mn. 4108 (electricity+gas) 
 Cost/metering point (EC calculation) || €220 
 Benefit/metering point (EC calculation) || €270 
 Consumers' benefit (% of total benefits) || 80% 
 Main benefits (% of total benefits) || For electricity only: Energy savings (15%) Savings on call centre costs (15%) Savings due to increased number of supplier switches (8%) 
 Main costs (% of total costs) || For electricity and gas: Smart electricity meters and installation costs (25%) Smart meter data management system (16%)[27] Communication infrastructure - PLC (14%)[28] 
 Energy savings (% of total electricity consumption) || 3.2% (indirect feedback) 6.4% (direct feedback) 
 Peak load shifting (% of total electricity consumption) || 2.8% 
The
highest benefits appear to go to the consumer, as the advantages of energy
savings and efficiency improvements in the market largely benefit the consumer.
The metering company (on behalf of the DSO) will also benefit due to increased
efficiency in the meter data collection. 
Other
parties though may lose revenue, for instance through lost tax revenue
(government) and lost margin on unsold electricity as a result of savings made
by the consumers (suppliers).  
Figure 16‑A depicts the share of the
three top benefits associated with electricity smart metering roll-out. The
upfront cost of the electricity smart metering roll-out will be at the expense
of the DSO, and it is mostly related with CAPEX costs of meters and
installation costs. Figure 16‑B illustrates the top three
costs associated with electricity and gas smart metering roll-out.
Figure 16‑A Share of main benefits associated with
electricity smart metering roll-out
Figure 16‑B Share of main costs associated with
electricity and gas smart metering roll-out

16.4.    Critical variables – sensitivity analysis

The
proposal of the electricity bill amendment grants the consumer with a
possibility of choosing among a number of options:

 refuse the smart meter;
 opt to have the meter turned
     to ‘administrative off’; 
 opt for detailed reading. 

On
that basis, additional assumptions were introduced in the updated CBA with respect
to the reference scenario, namely:
·      20% of the consumers opt for the ‘administrative off’ situation;
·      20% of consumers opt for detailed meter readings; and
·      20% of consumers refuse to have a smart meter installed.
It
is worth noting that even with a meter that is turned to ‘administrative off’,
some commercial services and installation of display are still available to the
consumer. Standard (bi-monthly) reading also provides indirect feedback.
However, with detailed meter readings additional services are possible, such as
time-of-use (ToU) tariffs, variable price contracts and demand management.    
If
20% of consumers were to opt for detailed meter readings, this would result in
an increased net present value. However, big additional benefits are not
expected due to the fact that even in the standard reading option, the consumer
port already offers detailed meter readings.
If
20 % of consumers were to opt for ‘administrative off’ situation, this would
result in a negative net present value due to reduced energy savings as a
result of lacking indirect feedback, costs for more frequent manual meter
readings, etc. Nevertheless, a consumer who has an In-home Display (connected
to the consumer port of the smart meter) would still be able to save energy as
a result of direct feedback.
If
20% of the consumers opt for a traditional meter, then the net present value
will substantially drop, however it will still be positive due to the need of
fewer investments in smart metering compared to the ‘administrative off’
option. However, the smart metering roll-out will proceed less efficiently in
the case where 20% of consumers refuse.     

16.5.    Qualitative assessments of non-monetary impacts and new enabled
services

Most
of the qualitative benefits are related to smart grids applications, such as:
facilitation of decentralised electricity generation, optimal load behaviour of
electric vehicles (smart charging strategies), etc.

16.6.   
Remarks

The
smart metering campaign is placing special attention on issues of consumer
acceptance and awareness as well as on realising the potential of energy
savings’ potential of smart meters. Customer acceptance is related to data
privacy and security concerns that have drawn particular attention in the
country. To this end, the amended billing proposal included the option that
each consumer could opt for ‘administrative off’ position, i.e. having his
meter treated as traditional with a functional consumer port (allowing access
to electricity consumption data), assuring no metering data are exchanged with
any third parties and no possibility of being remotely disconnected.
Therefore
one of the key points of the Dutch roll-out strategy is reportedly focusing on
encouraging the consumer to opt for a meter with standard or detailed meter
readings and being able to use it as efficiently as possible. Furthermore,
policy makers note that they see the large-scale deployment of such an
infrastructure as a significant contributor to a future smart grid system. 

17.          
POLAND

More
than one economic assessment has been performed in Poland and their positive
outcome gave an indication that the smart metering implementation could be
profitable to the Polish customers and the national energy system. At the
moment of writing this Staff Working Document, there was still an on-going
amendment in the Polish Energy Law which is expected to favour a large-scale
roll-out and the installation of smart meters to 80% of electricity consumers.

17.1.    Organisation of the deployment and regulation

The metering
activity in Poland is regulated, and the distribution system operator (DSO) is
the entity responsible for the smart metering implementation (Table 17‑A). The Metering Information
Operator plays the role of a Central Hub, and he is responsible not only to
store the metering information, but also to ensure compliance with the
technical and quality standards of the supplied information. The introduction
of this entity will reportedly guarantee permanent and equal access to metering
data for all eligible market players, making the infrastructure available to
other utilities while reducing the implementation costs thanks to
standardisation of information exchange on the metering data market. 
Table
17‑A  Smart electricity metering deployment set-up and
regulation in Poland
 POLAND 
 Metering activity || Regulated 
 Deployment strategy || Mandatory 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || Central Hub 
 Financing of the roll-out || Network tariffs 

17.2.    CBA local boundary conditions and scenarios

Table 17‑B presents the local
conditions and the main parameters considered for the economic assessment of long-term
costs and benefits associated to smart metering roll-out.  
Table 17‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Poland
 CBA BOUNDARY CONDITIONS 
 Scenarios || Not available 
 Number of metering points in the Country || 16.5 million 
 Common Minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || Full compliance reported with the recommended functionalities 
 Implementation speed  || 2012-2022 
 Penetration rate by 2020 || 80% 
 Discount rate || Not available 
 Smart metering lifetime || 8 years 
 CBA Horizon || Not available 
 Communication technology || Currently PLC is considered to be the best option for the national case. Furthermore, PL highlights the importance of standardisation in this respect. 

17.3.    Electricity smart metering deployment rate 

Figure 17‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period. 
Figure 17‑A Electricity smart metering roll-out plan
in Poland

17.4.    CBA outcome

Table 17‑C illustrates the main
outcome of the economic assessment of long-term costs and benefits carried out
in Poland.
Table 17‑C CBA outcome for electricity smart
metering roll-out in Poland
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 2200 
 Total Benefit || € mn. 2330 
 Cost/metering point (EC calculation) || €167 
 Benefit/metering point (EC calculation) || €177 
 Consumers' benefit (% of total benefits) || Not available 
 Main benefits (% of total benefits) || Energy savings (27%) Reduction of balance sheet differences in respect of both technical and commercial losses (25%) Reduced meter reading costs (24%) Postponement of generation plant and of extra grid capacity due to peak shaving (15%) 
 Main costs (% of total costs) || Meter reading costs (24%) Customer service costs (3%) Cost for extra infrastructure to increase grid capacity (7%) 
 Energy savings (% of total electricity consumption) || 1% 
 Peak load shifting (% of total electricity consumption) || 1% 
Figure 17‑B and Figure 17‑C show the share of main
benefits and costs, respectively, associated with the smart metering systems
roll-out.
Figure 17‑B Share of main benefits associated with
electricity smart metering roll-out
Figure 17‑C Share of main costs associated with
electricity smart metering roll-out

17.5.    Critical variables – sensitivity analysis

The
CBA communicated to the Commission services does not include a sensitivity
analysis.

17.6.   
Remarks

The
national cost-benefit assessment states that the implementation of intelligent
metering systems in Poland is necessary and a cost-effective process for
implementing climate policy and improving energy efficiency. In this light, and
in line with the policy for reasonable and efficient use of national energy
resources, measures to enable consumers to closely monitor their electricity
consumption and be billed for actual consumption are promoted. Another factor
of particular importance in Poland that supports the use of smart metering
systems is the reduced risk of imbalance of the national electricity system.
Main
benefits from the electricity smart metering roll-out include avoided costs for
meter reading, customer service, balance sheet differences, and also technical
and commercial losses, as well as avoided costs for construction of an
additional source of electricity, and deferred investments to increase the
capacity of the electricity network. Having estimated quantifiable benefits
associated with the reduction/avoidance of the above-mentioned costs, the
implementation of intelligent metering systems in Poland is considered to be
cost-effective. 
Another
important variable for the successful smart metering roll-out is the financing
scheme to be adopted, which should provide the right incentives to the DSOs to
timely proceed with the smart metering roll-out.

18.          
PORTUGAL

The
first economic evaluation of long-term costs and benefits associated with the smart
metering roll-out has been completed in 2012, but a review is expected by the
end of May 2014. Nevertheless, the detailed cost-benefit analysis (CBA) has not
been made available to the Commission services and data reported are filled
directly by the national authorities following smart metering activities.
Portugal continues with the deployment of large-scale smart metering pilot
projects. Amongst these, the InovGrid project[29]
is covering to date 31000 Low Voltage customers equipped with smart meters. The
integrated and intelligent electricity system that started in the municipality of  Évora, will be developed in another seven regions in Portugal with the additional installation of 100000 smart meters. Évora is located in the
south of Portugal with approximately 31000 Low Voltage customers with an annual
consumption of around 270 GWh. About 85% of Évora’s population has a contracted
power less or equal to 6.9 KVA, being 3.45 kVA (with 39%) and 6.9 kVA the most
representative contracted power categories, as can be seen in Table 18‑A. 
Table 18‑A  Contracted power diffusion in Portugal
 Contracted Power(kVA)   || Clients (%) 
 1.15 || 3% 
 2.3 || 0% 
 3.45 || 39% 
 4.6 || 5% 
 5.75 || 3% 
 6.9 || 35% 
 10.35 || 6% 
 13.8 || 3% 
 17.25 || 1% 
 20.7 || 4% 
 27.6 || 1% 
 34.5 || 0% 
 41.4 || 1% 

18.1.   
Organisation of the deployment and regulation

The metering
activity in Portugal is regulated, and the distribution system operator (DSO)
is the entity responsible for smart metering implementation and granting
third-party access to metering data (Table 18‑B).
Table 18‑B  Smart electricity metering deployment
set-up and regulation in Portugal
 PORTUGAL 
 Metering activity || Regulated 
 Deployment strategy || Not available (no roll-out) 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || DSO resources and network tariffs 

18.2.    CBA local boundary conditions and scenarios

Table 18‑C illustrates the local
conditions and the main parameters considered for the economic assessment of long-term
costs and benefits associated with the electricity smart metering roll-out.  
Table 18‑C CBA boundary conditions and scenarios for
smart electricity metering roll-out in Portugal
 CBA BOUNDARY CONDITIONS 
 Scenarios || Not available 
 Number of metering points in the Country || 6.5 million 
 Common Minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || Full compliance reported with recommended functionalities. Functionalities published in Portaria 231/2013. 
 Implementation speed  || 2014-2022 
 Penetration rate by 2020 || An expected rate of 80% (100% by 2022) has been used in the CBA. However, Portugal has not yet decided in favour of a large-scale smart metering roll-out, thus it is not clear what will be the real penetration rate by 2020. 
 Discount rate || 10% 
 Smart metering lifetime || 15 years 
 CBA Horizon || 40 years 
 Communication technology || 85% PLC and 15% GPRS 

18.3.    Smart metering deployment rate

An
annual deployment rate from 370000 to 900000 meters is expected to take place
during the period of 2014-2020.

18.4.   
CBA outcome

Table 18‑D illustrates the main
outcome of the economic assessment of long-term costs and benefits carried out
in Portugal associated with electricity smart metering roll-out.
Table 18‑D CBA outcome for electricity smart
metering roll-out in Portugal
 CBA OUTCOME || INCONCLUSIVE 
 Total Investment || € mn. 640 
 Total Benefit || € mn. 1316 
 Cost/metering point (as communicated by the Member State) || €99 
 Benefit/metering point (as communicated by the Member State) || €202 
 Consumers' benefit (% of total benefits) || 69% 
 Main benefits (% of total benefits) || Demand reduction (55.3%) Peak reduction (13.3%) Commercial losses reduction (11.1%) 
 Main costs (% of total costs) || Supplier profit reduction by consumer demand reduction (47.4%) Acquisition and installation of smart meters (31%) Communication infrastructure (14.6%) 
 Energy savings (% of total electricity consumption) || 3% 
 Peak load shifting (% of total electricity consumption) || 2% 
Figure 18‑A and Figure 18‑B  show the share of main
benefits and costs, respectively, associated with the electricity smart
metering systems roll-out.
Figure 18‑A Share of main benefits associated with
electricity smart metering roll-out
Figure 18‑B Share of main costs associated with
electricity smart metering roll-out

18.5.    Critical variables – sensitivity analysis

The
sensitivity analysis identified the following critical parameters:

 Discount rate;
 Consumption reduction due to
     enhanced information provided to the consumers by the smart meters;
 Current economic context and
     capital constraints;
 Market regulation and impact
     on the stakeholders;
 Increase of tariffs as a
     result of the roll-out (even with expected invoice reduction); and
 Current cost of smart metering
     technology.


19.          
ROMANIA

Romania
carried out in 2012 an economic assessment of long-term costs and benefits
associated with the electricity smart metering roll-out which led to a positive
outcome. However, an official smart metering roll-out plan has yet to be endorsed.

19.1.    Organisation of the deployment and regulation

The metering
activity in Romania is regulated, and the distribution system operator (DSO) is
the entity responsible for smart metering implementation and granting
third-party access to metering data. Table 19‑A illustrates the main
characteristics of the metering deployment in Romania.
Table
19‑A  Smart electricity metering deployment set-up and
regulation in Romania
 ROMANIA 
 Metering activity || Regulated 
 Deployment strategy || Mandatory 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || Network tariffs 

19.2.    CBA local boundary conditions and scenarios

The
economic assessment in Romania was made from a societal perspective, addressing
all low voltage (LV) customers for both electricity and gas and assuming that
installation of smart meters at medium voltage (MV) customers has already been
implemented.
For
the electricity sector there are three different scenarios that were tested: 

 ‘Balanced implementation’ –
     with a relatively linear yearly evolution targeting 80 % smart metering
     implementation by 2020 and full roll-out by 2022;
 ‘Accelerated implementation’
     pace – aiming at full roll-out in 5 years' time, by 2017;
 ‘Exponential implementation’
     – with a lower number of meters replaced during the first years to allow
     for companies to adjust, plan and learn from the implementation, and then
     a gradual increase to finalise the full roll-out by 2022 as in the ‘balance
     implementation’ scenario. 

In
addition to these scenarios, four models regarding the communication
infrastructure have been considered in the economic evaluation:

 Model 1: Independent
     infrastructure for electricity, gas and heat smart metering without
     middleware (i.e. data concentrator): Communication technology – GPRS,
     WiMAX;
 Model 2: Independent
     infrastructure for electricity, gas and heat smart metering with
     middleware. Communication technology – PLC from the smart meters to the
     concentrators and GPRS, WiMAX or Fibre Optics from the concentrator to the
     data centre;
 Model 3: Common
     infrastructure for electricity, gas and heat smart metering without
     middleware. Communication technology – GPRS, WiMAX; and
 Model 4: Common
     infrastructure for electricity, gas and heat smart metering with
     middleware. Communication technology – PLC from the smart meters to the
     concentrators and GPRS, WiMAX or Fibre Optics from the concentrator to the
     data centre.

Table 19‑B illustrates the local
conditions and main parameters used for the economic assessment of smart
metering roll-out in Romania associated with the scenario of ‘balanced
implementation’ and common infrastructure for electricity and gas smart
metering system with middleware. 
Table 19‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Romania
 CBA BOUNDARY CONDITIONS 
 Scenarios || Three different scenarios have been considered in the CBA (see above). Preferred scenario: ‘Balanced implementation’, common infrastructure for electricity and gas smart metering systems with middleware. 
 Number of metering points in the Country || 9 million 
 Common Minimum functionalities (as proposed in EC Recommendation 2012/148/EU) || Full compliance reported with recommended functionalities. 
 Implementation speed  || 2013-2022 
 Penetration rate by 2020 || 80% 
 Discount rate || 7.5% 
 Smart metering lifetime || 20 years 
 CBA Horizon || 20 years (2012-2032) 
 Communication technology || From the smart meter to the data concentrator PLC; From the data concentrator to the DMS: GSM/GPRS, WiFi/WiMAX and Fibre Optics 

19.3.    Electricity smart metering deployment rate 

Figure 19‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period. 
Figure 19‑A Electricity smart metering roll-out plan
in Romania

19.4.    CBA outcome

Table 19‑C illustrates the main
outcome of the economic assessment of long-term costs and benefits carried out
in Romania.
Table
19‑C  CBA outcome for electricity smart metering roll-out in
Romania
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 712 
 Total Benefit || € mn. 552 
 Cost/metering point (EC calculation) || €99 
 Benefit/metering point (EC calculation) || €77 
 Consumers' benefit (% of total benefits) || Not available (only qualitative benefit reported) 
 Main benefits (% of total benefits) || Reduced meter reading cost (36%) Reduced commercial losses (33.6%) Avoided distribution investments (12.9%) Reduced distribution operation costs (7.7%) 
 Main costs (% of total costs) || Investments and implementation costs (57.53%) Costs for system operations and maintenance (37.78%) Financing costs (4.69%) 
 Energy savings (% of total electricity consumption) || 3.8% 
 Peak load shifting (% of total electricity consumption) || Not available 
Figure 19‑B and Figure 19‑C show the share of main
benefits and costs, respectively, associated with the smart metering roll-out.
Reduced commercial losses and meter reading costs are the main benefits
expected, whereas, typically, a significant share of the costs is related to
installation, operation, and maintenance of the meters.
Figure 19‑B Share of main benefits associated with
electricity smart metering roll-out
Figure 19‑C Share of main costs associated with
electricity smart metering roll-out

19.5.    Critical variables – sensitivity analysis

The
sensitivity analysis identified the following critical variables:
·        
Level of reduction in commercial losses – this is the main benefit
to be achieved;
·        
Communication channels used for the metering system – the number
of meters working through different communication channels
(GPRS/PLC/WiFi/WiMax);
·        
Communication channels used for the middleware system – the number
of concentrators communicating through different communication channels
(GPRS/PLC/WiMax);
·        
Discount rates used for utilities companies;
·        
Weighted Average Cost of Capital;
·        
Option to choose or not the installation of balancing meters; 
·        
The implementation pace (slow versus fast installations); and
·        
Average number of manual readings per year.

19.6.    Qualitative assessments of non-monetary impacts and new enabled
services

The following non-monetised
benefits have been identified:

 More accurate meter reading
     and billing and fewer complaints;
 Innovative tariff systems
     and improved customer service quality;
 Easiness to change suppliers
     (leading towards a more competitive market place and a more fierce
     price-battle and high quality services); 
 Increased competition among
     suppliers as they are able to offer customised contracts and value-added
     services; and
 Easier and more effective
     integration of distributed generation and provision of home automation
     services.
19.7.   
Remarks

The
cost-benefit analysis indicates that implementation of smart metering in the
electricity sector has the potential to be a profitable investment. In the gas
sector, however, there is a risk that benefits will not cover all related
implementation costs. 
The
business case for electricity is positive, if the communication infrastructure
with middleware layer (data concentrators and balancing meters) is selected.
This is confirmed by the hypothesis that states that models without middleware
bring less benefits and are actually more expensive. The business case for gas,
on the other hand, does not show positive results on average, from the country
perspective, regardless of the selected model. 
In
building the analysis, several assumptions have been made and were validated by
both the National Regulatory Authority and key stakeholders in the market. There
are two significant variables that are impacting the results of the analysis: (i)
reduction in commercial losses that was estimated to have a realistic potential
of 60% in the Romanian market; and (ii) the discount rate that was assumed at
the level of weighted average cost of capital (WACC) regulated by the National
Regulator for each of the utilities (electricity and gas distribution). 
Under
these assumptions, and an implementation plan designed to meet the target of an
80 % smart metering implementation by 2020 and full (100%) roll-out by 2022,
the results of the business case for electricity indicate a positive net
present value over the analysed period of 20 years. 

20.          
SLOVAKIA

The
Ministry of Economy together with the Regulatory Office for Network Industries
performed an economic assessment of the long-term costs and benefits of smart
metering roll-out to examine the possibility of smart metering deployment in Slovakia,
identify the benefits and costs associated with this implementation and
evaluate the economic efficiency of the roll-out. The economic evaluation
resulted in a negative net present value for a large-scale (nation-wide)
roll-out. Nevertheless, the country decided to proceed with a selective
deployment of electricity smart metering for supply points with annual
consumption of over 4 MWh, which accounts for approximately 23% of all
forecasted Low Voltage supply points in 2020. 

20.1.   
Organisation of the deployment and regulation

The metering
activity in the Slovak Republic is regulated and the distribution system
operator (DSO) is the entity responsible for smart metering implementation and
granting third-party access to metering data. The latter function will be in
the future exercised by a central hub. Table 20‑A illustrates the main
characteristics of the set-up for the smart metering deployment in Slovakia.
Table
20‑A Smart electricity metering deployment
set-up and regulation in Slovakia 
 SLOVAKIA 
 Metering activity || Regulated 
 Deployment strategy || Mandatory for selective roll-out (for CBA positively assessed) 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO (Central hub in the future) 
 Financing of the roll-out || DSO private resources and network tariffs 

20.2.    CBA local boundary conditions and scenarios

Based
on the number of supply points as on 31 December 2011 and their average
annual increase, the forecast for the total number of Low Voltage supply points
for 31 December 2020 is 2625000.
The
economic assessment of the smart metering implementation in Slovakia
anticipates a roll-out period between 2013 and 2020. The project includes
supply points with annual consumption of over 4 MWh, which accounts for
approximately 23% of all forecast Low Voltage supply points in 2020. The target
number of supply points installed with smart meters in 2020 is 603750,
accounting for the supply of approximately 53% of the total annual Low Voltage
electricity consumption.
The
economic evaluation envisages two scenarios for smart metering deployment in
parallel to preserving the current situation i.e. a ‘progressive’ and a ‘linear’
scenario. The ‘progressive’ scenario assumes 70% of smart meters to be
installed during the first four years and the target of 100% to be achieved by
2020.

20.3.    Electricity smart metering deployment rate

The linear scenario assumes even implementation of smart meters
over the roll-out period (2013-2020), as depicted in Figure 20‑A.
Figure
20‑A Electricity smart metering roll-out plan
in Slovakia
Table 20‑B illustrates the local
conditions and the main parameters considered for the economic assessment of long-term
costs and benefits (cost-benefit analysis – CBA) associated to smart metering
roll-out in Slovakia. 
Table
20‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Slovakia
 CBA BOUNDARY CONDITIONS 
 Scenarios || ‘Progressive’ and ‘Linear’ scenario Preferred scenario: ‘Linear’ scenario 
 Number of metering points in the Country || 2.625 mn.[30] 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Reported by the Member State: ·         Partly compliance with the recommended smart metering functionalities (e) and (j) -  functionality (j) not mandatory; to be made obligatory under national law (Act on RES support) ·         Compliance with the rest of the functionalities 
 Implementation speed  || 2013-2020 
 Penetration rate by 2020 || 23% considered in the CBA 
 Discount rate || 6.04% 
 Smart metering lifetime || 15 
 CBA Horizon || 20 
 Communication technology || For direct communication between the meter and the DMS (with no middleware): GSM/GPRS/ETHN For indirect communication (with middleware): PLC, RF, and/or WAN 

20.4.   
CBA outcome

Table 20‑C illustrates
the main outcome of the economic assessment of long-term costs and benefits
carried out in Slovakia associated with the electricity smart metering roll-out.
Table
20‑C CBA Outcome in Slovakia
 CBA outcome || NEGATIVE (for a large-scale roll-out) 
 Total Investment || € mn. 69 
 Total Benefit || € mn. 71 
 Cost/metering point (EC calculation) || € 114 
 Benefit/metering point (EC calculation) || € 118 
 Consumers' benefit (% of total benefits) || 69% 
 Main benefits (% of total benefits) || Cost reduction due to load shifting (26%) Reduction of balancing cost (23%) Reduction of electricity consumption (16%) 
 Main costs (% of total costs) || Procurement of smart meters (69%) Installation of smart meters (17%) Procurement of IT (7%) 
 Energy savings (% of total electricity consumption) ||         1 % 
 Peak load shifting (% of total electricity consumption) ||   2%   
Figure 20‑B and Figure 20‑C show the share of main
benefits and costs, respectively, associated with the smart metering systems
roll-out.
Figure
20‑B Share of main benefits associated with
electricity smart metering roll-out
 
Figure 20‑C Share of main costs associated with
electricity smart metering roll-out

20.5.    Sensitivity analysis

The
CBA communicated to the Commission services does not include performance of a
sensitivity analysis.

20.6.   
Remarks

The
current focus at national level is on smart metering implementation for supply
points with an annual electricity consumption of more than 4 MWh which
accounts for approximately 53% of electricity consumption in the Low Voltage network.
The
national authorities plan to continuously monitored the smart metering
implementation with an emphasis on the economic efficiency achieved by the
smart meters already deployed. The effectiveness of the proposed scenario will
be reviewed on the basis of data obtained on the actual costs and benefits of
smart metering deployment after the first two years.

21.          
SLOVENIA

Currently
there is no binding legislation in Slovenia regarding the introduction of smart
metering systems. However, the existing legal framework does not exclude the possibility
of voluntary roll-out of smart meters by distribution network operators (DSOs).

The
Energy Agency of the Republic of Slovenia issued a document in July 2011 on ‘Guidelines
for the introduction of advanced metering in Slovenia’ intended to identify
policy attention points to be clarified before proceeding with a nation-wide
smart metering roll-out. The Slovenian authorities are considering smart
metering systems as an enabling technology for realising energy savings though
successful consumer engagement strategies and adequate incentive mechanisms put
in place. The economic evaluation of long-term costs and benefits associated
with smart metering systems is expected to cover electricity and gas markets
and should also consider the integration of other measurement systems such as
water and district heating systems. Furthermore, the cost-benefit analysis (CBA)
shall address economic aspects of smart metering roll-out in more detail than
the analysis performed in 2008, by EIMV (Milan Vidmar Electric Power Research
Institute), which covered 890000 measuring points in Slovenia. 

21.1.    Organisation of the deployment and regulation

Under
the current legal framework, the electricity distribution system operator is
responsible for the installation, calibration and maintenance of the meters as
well as for the invoicing and granting third-party access to metering data, as
shown in Table 21‑A. There is at least one
meter reading per year for domestic and small business customers (customers
with less than 41 kW of contracted power). Since January 1st 2008
all industrial customers and other customers with a contracted power of more
than 41 kW are equipped with AMR-systems, measuring the daily load profiles of
the customers in 15-minute intervals. 
Table
21‑A Smart electricity metering deployment
set-up and regulation in  Slovenia 
 SLOVENIA 
 Metering activity || Not available 
 Deployment strategy || Not available 
 Responsible party -implementation and ownership || Not available 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || Not available 

21.2.   
CBA local boundary conditions and scenarios

The table below presents some information, as given by the
national authorities, on parameters being considered for the economic
assessment of long-term costs and benefits associated with the smart metering
roll-out in Slovenia. 
Table
21‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Slovenia
 CBA BOUNDARY CONDITIONS 
 Scenarios || Official CBA is not available yet. 
 Number of metering points in the Country || Not available 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Reported by the Member State: ·         No compliance with functionality (b) and (j) of the recommended functionalities ·         Compliance with the rest of the functionalities 
 Implementation speed  || Not available 
 Penetration rate by 2020 || Not available 
 Discount rate || Not available 
 Smart metering lifetime || Not available 
 CBA Horizon || Not available 
 Communication technology || PLC and GSM 

21.3.    CBA outcome

There
were no data available at the moment of writing this Staff Working Document, to
fill in the fields related to the main outcome of the
national economic assessment of long-term costs and benefits associated with
the electricity smart metering roll-out in Slovenia.
Table
21‑C CBA outcome for electricity smart
metering roll-out in Slovenia
 CBA OUTCOME || No CBA performed 
 Total Investment || Not available 
 Total Benefit || Not available 
 Cost per metering point || Not available 
 Benefit per metering point || Not available 
 Consumers' benefit (% of total benefits) || Not available 
 Main benefits (% of total benefits) || Not available 
 Main costs (% of total costs) || Not available 
 Energy savings (% of total electricity consumption) || Not available 
 Peak load transfer (% of total electricity consumption) || Not available 

21.4.   
Remarks

There
is neither a mandate issued for smart metering roll-out in electricity, nor an
official cost-benefit analysis available yet. 

22.          
SPAIN

Spain
has not conducted an economic assessment of long-term costs and benefits for an
electricity smart metering roll-out. However, the country has decided to
proceed with a full roll-out in the case of electricity in compliance with a
Royal Decree 1634/2006 stating that by July 1st 2007 the Spanish
regulator had to elaborate a replacement plan for all Spanish domestic meters
with contracted power lower than 15 kW. The roll-out covers 100% of 27.8
million meters and is intended to run from 2011 till 2018. 
A
number of factors, such as late approval of the replacement plan, technological
uncertainties in terms of system communication, alleged supply problems of
certified meters and negotiations with the regulators about the level of cost
acceptance, hampered the achievement of the initial target of 30 % by 2010. The
latest developments are related to the introduction of the first set of smart
meters in large scale pilot projects deployed by Endesa, Iberdrola, Gas Natural
Fenosa, E.ON and Hidrocantábrico (EDP group).

22.1.    Organisation of the deployment and regulation

The metering
activity in Spain is regulated and the distribution system operator (DSO) is
the responsible party for implementation and also for granting third-party
access to metering data. The choice for the customer to either accept a rented
meter by the DSO at a regulated monthly fee or install his own meter is a legal
right in Spain.
Table
22‑A Smart electricity metering deployment
set-up and regulation in Spain 
 SPAIN 
 Metering activity || Regulated 
 Deployment strategy || Mandatory 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || Network tariffs + smart metering rental fees 

22.2.    CBA local boundary conditions and scenarios

Table 22‑B illustrates the local
conditions and main parameters used or considered for the assessment of smart
metering roll-out in Spain. 
Table 22‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Spain
 CBA BOUNDARY CONDITIONS 
 Scenarios || Not available (there is no cost-benefit analysis (CBA)) 
 Number of metering points in the Country || 27.77 mn. 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || ·         No compliance with functionality (b) of the recommended functionalities ·         Compliance with the rest of the functionalities 
 Implementation speed  || 2011-2018 
 Penetration rate by 2020 || 100% 
 Discount rate || Not available 
 Smart metering lifetime || 15 years 
 CBA Horizon || Not available 
 Communication technology || PLC 

22.3.    Smart metering deployment rate

Figure 22‑A illustrates the electricity
smart metering deployment rate throughout the roll-out period. 
Figure 22‑A Smart electricity metering roll-out in
Spain

22.4.    CBA outcome

Table 22‑C CBA outcome for electricity smart
metering roll-out in Spain
 CBA OUTCOME || No CBA performed 
 Total Investment || Not available 
 Total Benefit || Not available 
 Cost/metering point (EC calculation) || Not available 
 Benefit/metering point (EC calculation) || Not available 
 Consumers' benefit (% of total benefits) || Not available 
 Main benefits (% of total benefits) || Not available 
 Main costs (% of total costs) || Not available 
 Energy savings (% of total electricity consumption) || Not available 
 Peak load shifting (% of total electricity consumption) || Not available 

22.5.   
Remarks

No cost-benefit analysis available.


23.          
SWEDEN

Sweden
has performed a full-scale deployment of electricity smart meters during the
last years due to mandated monthly invoicing (entered in force on 1st
July 2009), which encouraged widespread deployment of automatic meter reading
technology. Currently, the requirements are hourly metering of the consumption
for larger customers with a fuse description larger than 63 A (commercial and
industrial customers), and monthly metering of the consumption for smaller
customers (households) with a fuse description smaller than 63 A. The
Government proposal to the Parliament (Prop. 2011/12:98) suggested that all
customers should have the possibility of hourly metering of electricity
consumption without extra costs. This will incentivise customers to change
their behavioural patterns and reduce their consumption, but will also open a
market for new services and products tailored to the consumers’ needs. 

23.1.   
Organisation of the deployment and regulation

The metering
activity in Sweden is regulated and the distribution system operator (DSO) has the
responsibility of smart meter installation and granting third-party access to
metering data, as indicated in Table 23‑A. The deployment strategy is
voluntary; however the requirement for monthly invoicing led to widespread
deployment of remotely read meters.  
Table 23‑A Smart electricity metering deployment
set-up and regulation in Sweden
 SWEDEN 
 Metering activity || Regulated 
 Deployment strategy || Voluntary 
 Responsible party -implementation and ownership || DSO 
 Responsible for third-party access to metering data || DSO 
 Financing of the roll-out || DSO resources + Network tariffs 

23.2.    CBA local boundary conditions and scenarios

Table 23‑B illustrates the local
conditions and main parameters used for the economic assessment of smart
metering roll-out in Sweden. 
Table 23‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Sweden
 CBA BOUNDARY CONDITIONS 
 Scenarios || Not available 
 Number of metering points in the Country || 5.2 mn. 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || ·         Partly compliance with the recommended functionalities (b), (g) and (h) – Hourly meter readings for household customers ·         Compliance with the rest of the functionalities 
 Implementation speed  || 2003-2009 
 Penetration rate by 2020 || 100% 
 Discount rate || Not available 
 Smart metering lifetime || 10 years 
 CBA Horizon || Not available 
 Communication technology || From smart meter to data concentrator: Mix of GPRS, PLC and/or Radio (46%) PLC only (37%) Radio only (17%) GPRS (1%) From data concentrator to the Distribution Management System: GPRS (86%) IP (fiber, etc.) – 33% Other (17%) Radio (9%) PLC (8%) 

23.3.    Smart electricity deployment rate

 The electricity smart metering roll-out has already been completed
in July 2009.

23.4.    CBA outcome

Table 23‑C illustrates the main
outcome of the economic assessment of long-term costs and benefits carried out
in Sweden, as communicated by the Member State to the Commission services.
Table
23‑C CBA outcome for electricity smart
metering roll-out in Sweden
 CBA OUTCOME || POSITIVE 
 Total Investment || € 1500 mn 
 Total Benefit || € 1677 mn 
 Cost/metering point (EC calculation) || €288 
 Benefit/metering point (EC calculation) || €323 
 Consumers' benefit (% of total benefits) || 19.7% 
 Main benefits (% of total benefits) || Not available 
 Main costs (% of total costs) || Not available 
 Energy savings (% of total electricity consumption) ||             1-3% 
 Peak load shifting (% of total electricity consumption) || Not available 

23.5.   
Remarks

There is no detailed cost-benefit
analysis available.

24.          
UK

The
United Kingdom has carried out separate cost benefit analyses (CBAs) for the
roll-out of smart metering systems in Great Britain and Northern Ireland. In Great
Britain energy suppliers will be responsible for the provision and installation
of smart meters and are required under conditions in their licences to take all
reasonable steps to complete the roll-out by the end of 2020, both for
electricity and gas. 
The
sections below illustrate a summary of the economic assessment carried out in the
UK Great Britain and UK Northern Ireland.

24.1.   
UK – GB

The
figures in the current report are based on the economic assessment of the long-term
costs and benefits performed by the national authorities in line with the
provisions of the Third Energy Package, and submitted to the Commission
services. 
The
respective CBA has considered a joint electricity and gas roll-out. The analysis
yielded a positive result and indicated a strong focus on energy savings, and
empowerment of the consumers to better understand their energy consumption and
deliver carbon savings. The economic evaluation (latest update in January 2013)
includes: changes in fossil fuel and carbon prices, carbon emission factors,
energy consumption growth, and air quality improvement benefit. It uses 2013 as
a base year for all present value calculations and also considers the
consultation response to the second version of Smart Meter Equipment Technical
Specifications (SMETS). The updated impact assessment of 2013 includes a
separate analysis for the domestic and non-domestic sectors for both
electricity and gas smart metering deployment.

24.2.    Organisation of the deployment and regulation

The metering
activity in the UK-GB is competitive and the supplier is the owner and
responsible party for the smart metering installation. Gas and electricity suppliers
are required to take all reasonable steps to complete the roll-out of smart
metering systems to their domestic and smaller non-domestic customers by 31
December 2020. The role of the responsible party granting access to metering
data is given to a central hub – the Data and Communications Company (DCC). DCC
will be reportedly providing a suitable communications platform over which data
can be securely transmitted.
Table 24‑A summarises the
characteristics of the metering deployment set-up in the UK-GB. 
Table
24‑A Smart electricity metering deployment set-up and regulation
in UK-GB
 UK-GB 
 Metering activity || Competitive 
 Deployment strategy || Mandatory 
 Responsible party -implementation and ownership || Supplier 
 Responsible for third-party access to metering data || Central Hub 
 Financing of the roll-out || Funded by suppliers 

24.3.    CBA local boundary conditions and scenarios

The
baseline case scenario assumes no Government intervention on domestic smart metering;
however, it includes the following:

 Cost of continued
     installation of basic meters;
 Benefits from better billing;
 5% of the predicted consumer
     electricity savings from smart metering are assumed to occur in the counterfactual
     world as a result of Carbon Emission Reduction Target (CERT) and other
     delivery of clip-on displays; and.
 Costs and benefits for
     limited roll-out of smart/advanced meters where positive business case
     exists (for the non-domestic sector). 

In liberalised
and competitive supply markets such as in Great Britain’s, suppliers or other
meter owners are reluctant to install their own smart meters without a
commercial and technical interoperability agreement. Without such an agreement
meter owners would face a large risk of losing a major part of the value of any
smart meter installed. This is because there is a significant chance that
consumers will switch to a different energy supplier who will not want or be
able to use the technology installed earlier and will, therefore, not be
willing to pay to cover the full costs – making the smart meter redundant. This
supports the idea that no smart meters have been rolled out to domestic
customers in the baseline scenario, despite the available technology. Nevertheless,
recognising that some level of smart meters may be rolled out in the domestic
sector, the counterfactual scenario assumes 20% of the population receiving a
smart meter, with 30% of the overall benefits from the full roll-out being
realised.     
Table 24‑B illustrates the local
conditions and relevant parameters used for the economic assessment. All the
data presented below refer to smart metering roll-out for both electricity and
gas in the domestic and non-domestic sector.
Table
24‑B CBA boundary conditions and scenarios for smart electricity
metering roll-out in UK-GB
 CBA BOUNDARY CONDITIONS 
 Scenarios || Counterfactual scenario; Central scenario 
 Number of metering points in the Country || 59.6 million electricity and gas to be replaced – 32.94 million for electricity and 26.63 million for gas, by 2030 (total number of metering points by 2030 = 63.8 million) 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Full compliance reported with all recommended functionalities Functional requirements set in SMETS[31] 
 Implementation speed  || 2012-2020 
 Penetration rate by 2020 || 97% assumed in CBA for modelling purposes; 100% by 2030 
 Discount rate || 3.5% 
 Smart metering lifetime || 15 years 
 CBA Horizon || 18 years (2012-2030) 
 Communication technology || The Data and Communications Company (DCC) signed the first generation of communications contracts in September 2013. A range of technologies will be used including cellular and long range radio. 

24.4.   
Smart metering deployment rate

Figure 24‑A illustrates the smart
metering deployment rate throughout the roll-out period. 
Figure
24‑A Smart metering roll-out in UK-GB
(reference: CBA)
Note: The figure reflects
the roll-out timeline as of September 2012 considered in the respective CBA.

24.5.   
CBA outcome

Table 24‑C presents the main outcome
of the economic assessment of long-term costs and benefits carried out in the
UK-GB and associated with electricity and gas smart metering roll-out.
Table 24‑C CBA outcome for smart metering roll-out
in UK-GB
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn 9295 
 Total Benefit || € mn 21749 
 Cost per metering point || €161 
 Benefit per metering point || €377 
 Consumers' benefit (% of total benefits) || 28% (domestic sector) and 60% (non-domestic sector) 
 Main benefits (% of total benefits) || Domestic sector (electricity + gas): Supplier cost savings (54%) Energy savings (28%) Carbon savings (7%) Non-domestic sector (electricity + gas): Energy savings (60%) Carbon savings (19%) Supplier cost savings (15%) 
 Main costs (% of total costs) || Domestic sector (electricity + gas): Smart meters CAPEX+OPEX (43%) Communication costs CAPEX+OPEX (23%) Installation costs (15%) Non-domestic sector (electricity + gas): Smart meters CAPEX+OPEX (49%) Communication costs CAPEX+OPEX (31%) Installation costs (16%) 
 Energy savings (% of total electricity consumption) ||  2.2%[32]; gas 1.8% 
 Peak load shifting (% of total electricity consumption) || 0.5% - 1% (as a percentage of total consumption) 1.3% - 2.9%  (as a percentage of peak consumption) 
The figures
below illustrate the main three benefits of joint electricity and gas smart
metering roll-out, referring to the domestic sector only. 
Figure 24‑B Share of main benefits associated with
electricity and gas smart metering roll-out (household only)
The
cost figures are risk-adjusted, i.e. they have been adjusted for optimism bias.
The main costs associated with electricity and gas smart metering roll-out, are
the capital and expenditure costs of the smart meters and the communication
technology, as shown in Figure 24‑C.
Figure
24‑C Share of main benefits associated with
electricity and gas smart metering roll-out (households only)

24.6.    Critical variables – sensitivity analysis

A
sensitivity analysis has been applied to the following benefits:

 Energy savings (relative to
     consumers’ behavioural response to information); 
 Call centre savings;
 Reduced theft;
 Avoided site visits;
 Avoided investments due to
     ToU tariffs (distribution/transmission level/generation);
 Reduction in customer
     minutes lost;
 Operational savings from
     fault fixing;
 Avoided investigations on
     voltage complaints;
 Reduced outage notification
     calls; and
 Short run marginal costs
     savings due to time-of-use (ToU) tariffs, etc.

To
this end, three scenarios have been considered: ‘low’, ‘high’ and ‘central’
scenario and the benefits reported are for the ‘central’ scenario. However, the
net present value remains positive in all three scenarios.

24.7.    Qualitative assessments of non-monetary impacts and new enabled
services

In
addition to the quantifiable benefits of smart metering systems deployment, the
UK-GB CBA considers also the following non-monetary impacts:  

 Enabling a smarter grid;
 Increase of energy market
     competition; and
 Future products (more
     opportunities to the home energy management sector, healthcare system
     savings, etc.);
24.8.   
Data privacy and security

The
frequency of meter readings and the level of data detail to be extracted is
likely to vary with the mode of operation (pre-payment or credit) and the type
of tariff the customer has chosen. When offering innovative tariff schemes, the
suppliers might seek access to more detailed consumption information. In this
case, energy consumption data will be personal data for the purposes of Data
Protection Act 1998, regardless whether the data come from conventional,
pre-payment or smart meter. In this sense, the rule ‘privacy by design’ ensures
that privacy issues are considered and embedded into the design of the system
from the start. Furthermore, in the UK-GB the consumers will have the possibility
to choose how their data are used and by whom, except where they are required
to fulfil regulated duties.

24.9.    Remarks

UK-GB
is progressing towards the implementation of smart metering in both the
electricity and gas sectors. The economic assessment indicates particular focus
on the consumer side – empowering the consumer to better understand and manage
its energy consumption. The privacy and security of metering data available to
third-parties is addressed with the provision of the Data Protection Act of
1998. 
The
process of smart metering deployment will continue with monitoring and
information collection in order to: 
·        
Inform
the on-going development of the approach to consumer engagement;
·        
Monitor
the capability and readiness of industry participants for the start of mass
roll-out;
·        
Track
progress towards completion; and
·        
Manage
the full range of costs and benefits attributable to smart metering.
The
monitoring and evaluation results will be published by the Government as
follows:
·        
An
annual progress report will draw together data and information gathered from
suppliers and other sources, and include an update on progress, plans, costs
and benefits; 
·        
Quarterly
updates on key metrics; and
·        
Evaluation
reports, including the results of an early assessment of emerging impacts, which
is currently being developed and which will report in 2013.

24.10.                       
UK-NI

Northern
Ireland energy market conditions differ in a number of ways from those in Great
Britain. The overall number of meters in Northern Ireland is a relatively small
proportion (1.5%) of the total UK metering points, to which the Member State
obligations for a roll out apply. It is for this reason that Northern Ireland
data are not reflected in the body of the Commission Report and in the
respective Staff Working Document analysing the CBA data from Member States.  
However,
Northern Ireland has completed a region specific economic assessment of long-term
costs and benefits associated with smart metering implementation, to take
account of specific regional energy market conditions which differ from those
in the GB. 
The
economic evaluation of July 2011 resulted in a marginally positive net present
value for the ‘electricity metering only’ option. The CBA analysis determined
that gas metering is not currently cost effective in Northern Ireland. This
situation will be reviewed in 2015 as the number of gas consumers increases.
For completeness and to evidence the different approaches with respect to smart
metering roll out between UK-GB and UK-NI, the key outputs from the Northern
Ireland CBA is presented within this Staff Working Document.
On
the basis of the marginally positive net present value for electricity,
Northern Ireland proposes to undertake a public consultation during 2014 to
determine a region-specific smart metering strategy for the domestic
electricity sector in Northern Ireland. 
Nevertheless,
the aim of a roll-out in Northern Ireland is to provide all electricity
consumers with smart meters by 2020 in a cost effective way which optimises
benefits to consumers.

24.11.                       
Organisation of the deployment and regulation

The Northern
Ireland metering activity is regulated, and it has been determined that the
smart metering deployment strategy will be mandatory, as indicated in Table 24‑D. The
responsible parties for implementation, ownership and access to metering data
have yet to be decided, although the distribution system operator (DSO) is
considered a viable option. It is likely that the roll-out of smart meters will
be financed through network tariffs, a final decision on this issue will be
determined through further consultation. 
Table 24‑D  Smart electricity metering deployment
set-up and regulation in UK-NI
 UK-NI 
 Metering activity || Regulated 
 Deployment strategy || Mandatory 
 Responsible party -implementation and ownership || To be determined 
 Responsible for third-party access to metering data || To be determined 
 Financing of the roll-out || To be determined 

24.12.                       
CBA local boundary conditions and scenarios

The
following deployment scenarios are explored in the economic evaluation of long-term
costs and benefits associated with smart metering roll-out in Northern Ireland:

 Only electricity smart
     metering with PLC as a communication technology (reference scenario);
 Joint economic effect of
     deploying electricity and gas smart meters together in a  single programme
     with PLC as a communication technology; 
 Joint deployment of smart
     meters in electricity, gas and water sectors with PLC as a communication
     technology; 
 Only electricity smart
     metering with broadband as a communication technology; 
 Joint economic effect of
     deploying electricity and gas smart meters together in a  single programme
     with broadband as a communication technology; and 
 Develop a composite utility
     effect of jointly deploying smart meters in electricity, gas and water
     sectors with broadband as a communication technology.

All
scenarios produce positive net present value (with the fourth scenario
exploiting the highest benefit) over the appraisal period considered, except
for the third scenario where a negative net present value is communicated. The
table below illustrates the local conditions and relevant parameters used for
the economic assessment. All the data presented below refer to the reference
scenario, characterised with: deployment of smart electricity metering only
using PLC from meters to data concentrators and 3G wireless communications for
data transmission from concentrators to back-office systems.  
Table
24‑E  CBA boundary conditions and scenarios for
smart electricity metering roll-out in UK-NI
 CBA BOUNDARY CONDITIONS 
 Scenarios || Six scenarios (see above) considered in the CBA in addition to the ‘Business as Usual’ scenario (Counterfactual scenario) Preferred scenario: ‘Reference scenario’ 
 Number of metering points in the Country || 860000 
 Common minimum functionalities (as proposed in EC Recommendation 2012/148/EU)  || Full compliance reported with all recommended functionalities 
 Implementation speed  || 2014-2020 (to be confirmed) 
 Penetration rate by 2020 || > 80% (to be confirmed) 
 Discount rate || 3.5% 
 Smart metering lifetime || 15 years 
 CBA Horizon || 25 years 
 Communication technology || To be determined (most probably PLC/Broadband) 

24.13.                       
Smart metering deployment rate

No
decision has been taken on the roll-out implementation plan, however, it is
assumed to be completed in a five years period. The aforementioned consultation
is scheduled to commence late 2013.

24.14.                       
CBA outcome

All
scenarios produce positive net present value except the one with water meters
where the net present value is negative. In the reference scenario, the
benefits outweigh the costs by 11%. Results also demonstrate that the version
of the reference scenario with a broadband, instead PLC, produces the highest net
present value of all scenarios. The broadband option for communication is of
lower cost than PLC while yielding the same benefits and avoiding additional
costs for concentrators, GPRS modems and on-going GPRS data transfer costs. This
is due to the possibility of exploiting already developed internet
infrastructure in NI, with almost all households having an internet connection,
directly or indirectly.  
Scenarios
of joint roll-out of electricity and gas smart meters are still positive,
albeit with lower cost benefit ratios, reflecting the fact that the expected
benefits for gas smart meters probably do not outweigh the costs. This also
indicates that the business case of gas smart metering roll-out only is not
positive.   
The
only scenario with negative net present value is the one of rolling-out water
smart meters jointly with electricity and gas meters. 
The
table below illustrates the main outcome of the economic assessment of long-term
costs and benefits carried out in the UK-NI.
Table 24‑F CBA outcome for electricity smart
metering roll-out in UK-NI
 CBA OUTCOME || POSITIVE 
 Total Investment || € mn. 336 
 Total Benefit || € mn. 346 
 Cost per metering point (EC calculation) || €489 
 Benefit per metering point (EC calculation) || €502 
 Consumers' benefit (% of total benefits) || 50% (domestic sector) 
 Main benefits (% of total benefits) || Consumption reduction (39%) Reduced meter reading cost (19%) Energy savings due to adoption of Time of Use tariffs (17%) 
 Main costs (% of total costs) || Procurement and installation cost (52%) Cost of IHD (10%) Introduction of new systems – e.g. IT systems for data management, settlement and storage (8%) 
 Energy savings (% of total electricity consumption) || 3% (domestic sector) 
 Peak load shifting (% of total electricity consumption) || 5% 
As
shown in the figure below (Figure 24‑D), about 40% of the
anticipated gains originate from the consumption reduction due to customer
behavioural change (assuming installation of IHD), almost 20% is attributed to
meter reading savings, and additional 17% comes from savings related to ToU
tariffs. 
Figure 24‑E demonstrates, especially
for the reference scenario that the overwhelming majority of costs relate to
meters displays, communication components, with 52 % attributed to procurement
and installation of electricity smart meters. New systems and processes (e.g.
new IT system for data management, settlement and storage) attributed to the
smart metering roll-out account for 8% of the total benefits. 
Figure 24‑D Share of main benefits associated with
electricity smart metering roll-out
Figure 24‑E Share of main costs associated with
electricity smart metering roll-out

24.15.                       
Critical variables – Sensitivity analysis

The
outcome of the national electricity smart metering deployment appears to be
particularly sensitive to the following parameters: 

 Energy savings due to
     introduction of IHD: 1-5%;
 Capital costs for meters and
     IHD;
 Customer response to ToU
     tariffs; and
 Weighted Average Cost of
     Capital (WACC ): ±1.5%
24.16.                       
Qualitative assessments of non-monetary impacts
and new enabled services

The
cost benefit analysis notes that there are several intangible benefits coming
from the introduction of smart metering in the country relevant to the more
generic concept of smart grids, such as: enhanced management of distributed and
micro-generation, demand response benefits, easier accommodation of energy
storage applications and electric vehicles, etc.

24.17.                       
Remarks

The
economic assessment of long-term costs and benefits due to electricity smart
metering roll-out in Northern Ireland returned a marginally positive net
present value, but turns negative when gas smart metering option is included in
the mix. This reflects the respective additional costs of including gas and/or
water smart metering that deliver little or (in the case of water) no added
benefit.
The
overall impact on customers in the reference scenario ranges from a positive
benefit with added carbon benefits to a negative one. With gas included, the
best case is positive with embedded carbon benefit and negative with financing
costs factored in. Finally, if water is incorporated (multi utility), the
effect is negative in both cases.
Therefore,
the reference scenario (inclusion of electricity smart meters only) could be
justified particularly when considering broader innovation benefits likely to
be realised by the network operator. The latter are linked to the smart grid
capability and potential home management benefits that are difficult to
evaluate at this stage due to evolution of new technologies (transport, home
services, renewable take up and demand response) and consequent network
development.   

ABBREVIATIONS AND ACRONYMS

AEEG             Autorità
per l’Energia Elettrica e il Gas (IT)
AMI                Automated
(or Advanced) Metering Infrastructure
AMR               Automated
Meter Reading
BPL                 Broadband
over Power Lines
CAPEX           Capital
Expenditures
CBA                Cost-Benefit
Analysis
CHP                Combined
Heat and Power
CO2                 Carbon
Dioxide
DC                  Data
Concentrator      
DLC                Distribution
Line Carrier
DMS               Data
Management System
DSL                Digital
Subscriber Line
DSO                Distribution
System Operator
EC                   European
Commission
EU                   European
Union
GPRS              General
Packet Radio Service 
GSM               Global
System for Mobile Communications
ICT                  Information
and Communication Technologies
IP                    Internet
Protocol
IHD                 In Home
Display
kWh                kilowatt-hour
LTE                 Long
Term Evolution (communication standard)
NPV                Net
Present Value
OFGEM          Office of the
Gas and Electricity Markets (UK)
OPEX             Operational
Expenditures
PLC                 Power-Line
Carrier; Power Line Communications
R&D               Research
and Development
RES                 Renewable
Energy Sources
SM                  Smart
Meter
ToU                 Time-of-Use
TSO                 Transmission
System Operator
UMTS             Universal
Mobile Telecommunications System
WiMax            Worldwide
Interoperability for Microwave Access (wireless communication standard)

COUNTRY CODES

AT                   Austria
BE                   Belgium
BG                  Bulgaria
CY                  Cyprus
CZ                   The
Czech Republic
DE                   Germany
DK                  Denmark
EE                   Estonia
EL                   Greece
ES                   Spain
FI                    Finland,
Suomi
FR                   France
HR                  Croatia
HU                  Hungary
IE                    Ireland
IT                    Italy
LT                   Lithuania
LU                   Luxemburg
LV                   Latvia
MT                  Malta
NL                   Netherlands,
The
PL                   Poland
PT                    Portugal
RO                  Romania
SE                   Sweden
SI                    Slovenia
SK                   Slovakia
UK                  United
Kingdom

LIST OF
TABLES

Table 1‑A Smart metering deployment set-up and regulation
in Austria. 4
Table 1‑B CBA boundary conditions and scenarios in
Austria. 5
Table 1‑C Main results of CBA due to electricity smart
metering roll-out in Austria. 6
Table 2‑A Smart metering deployment set-up and regulation
in Belgium - Flanders. 9
Table 2‑B CBA boundary conditions and scenarios in
Belgium - Flanders. 10
Table 2‑C CBA outcome in Belgium - Flanders. 11
Table 2‑D CBA boundary conditions and scenarios in
Belgium – Region de Bruxelles Capitale. 13
Table 2‑E CBA outcome (advanced scenario) in Belgium –
Region de Bruxelles Capitale. 14
Table 2‑F CBA boundary conditions and scenarios in
Belgium – Wallonia. 17
Table 2‑G CBA outcome in Belgium – Wallonia. 18
Table 3‑A Smart metering deployment set-up and regulation
in Czech Republic. 20
Table 3‑B CBA boundary conditions and scenarios in Czech
Republic. 21
Table 3‑C CBA outcome in Czech Republic. 22
Table 4‑A Smart electricity metering deployment set-up
and regulation in Denmark. 26
Table 4‑B CBA boundary conditions in Denmark. 27
Table 4‑C CBA outcome in Denmark. 28
Table 5‑A Smart electricity metering deployment set-up
and regulation in Estonia. 30
Table 5‑B CBA boundary conditions in Estonia. 30
Table 5‑C CBA outcome in Estonia. 31
Table 6‑A Smart electricity metering deployment set-up
and regulation in Finland. 33
Table 6‑B CBA boundary conditions and scenarios in
Finland. 33
Table 6‑C CBA outcome in Finland. 34
Table 7‑A Smart electricity metering deployment set-up
and regulation in France. 37
Table 7‑B CBA boundary conditions and scenarios in France. 38
Table 7‑C CBA outcome in France. 39
Table 8‑A Smart electricity metering deployment set-up
and regulation in Germany. 41
Table 8‑B CBA boundary conditions in Germany. 42
Table 8‑C CBA outcome in Germany. 44
Table 9‑A Smart electricity metering deployment set-up
and regulation in Greece. 47
Table 9‑B CBA boundary conditions in Greece. 48
Table 9‑C CBA outcome in Greece. 49
Table 10‑A Smart electricity metering deployment set-up
and regulation in  Ireland. 52
Table 10‑B Smart electricity metering roll-out options in
Ireland. 53
Table 10‑C CBA boundary conditions and scenarios for
smart electricity metering roll-out in Ireland  53
Table 10‑D CBA outcome for electricity smart metering
roll-out in Ireland. 54
Table 11‑A Smart electricity metering deployment set-up
and regulation in Italy. 57
Table 11‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Italy  57
Table 11‑C CBA outcome for electricity smart metering
roll-out in Italy. 58
Table 12‑A Smart metering deployment set-up and
regulation in Latvia. 61
Table 12‑B CBA boundary conditions and scenarios in
Latvia. 61
Table 12‑C CBA outcome in Latvia. 62
Table 13‑A Smart metering deployment set-up and
regulation in Lithuania. 65
Table 13‑B CBA boundary conditions and scenarios in
Lithuania. 66
Table 13‑C CBA outcome in Lithuania. 66
Table 14‑A  Smart electricity metering deployment set-up
and regulation in Luxembourg. 69
Table 14‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Luxembourg  69
Table 14‑C CBA outcome for electricity smart metering
roll-out in Luxembourg. 70
Table 15‑A Smart electricity metering deployment set-up
and regulation in Malta. 72
Table 15‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Malta  72
Table 15‑C Key data for electricity smart metering
roll-out in Malta. 73
Table 16‑A Smart electricity metering deployment set-up
and regulation in Netherlands. 75
Table 16‑B  CBA boundary conditions and scenarios for
smart metering roll-out in Netherlands. 76
Table 16‑C  CBA outcome for electricity smart metering
roll-out in Netherlands. 77
Table 17‑A  Smart electricity metering deployment set-up
and regulation in Poland. 81
Table 17‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Poland  81
Table 17‑C CBA outcome for electricity smart metering
roll-out in Poland. 82
Table 18‑A  Contracted power diffusion in Portugal 85
Table 18‑B  Smart electricity metering deployment set-up
and regulation in Portugal 86
Table 18‑C CBA boundary conditions and scenarios for
smart electricity metering roll-out in Portugal 86
Table 18‑D CBA outcome for electricity smart metering
roll-out in Portugal 87
Table 19‑A  Smart electricity metering deployment set-up
and regulation in Romania. 89
Table 19‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Romania  90
Table 19‑C  CBA outcome for electricity smart metering
roll-out in Romania. 91
Table 20‑A Smart electricity metering deployment set-up
and regulation in Slovakia. 94
Table 20‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Slovakia  95
Table 20‑C CBA Outcome in Slovakia. 96
Table 21‑A Smart electricity metering deployment set-up
and regulation in  Slovenia. 98
Table 21‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Slovenia  99
Table 21‑C CBA outcome for electricity smart metering
roll-out in Slovenia. 99
Table 22‑A Smart electricity metering deployment set-up
and regulation in Spain. 101
Table 22‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Spain  101
Table 22‑C CBA outcome for electricity smart metering
roll-out in Spain. 102
Table 23‑A Smart electricity metering deployment set-up
and regulation in Sweden. 104
Table 23‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in Sweden  104
Table 23‑C CBA outcome for electricity smart metering
roll-out in Sweden. 105
Table 24‑A Smart electricity metering deployment set-up
and regulation in UK-GB.. 107
Table 24‑B CBA boundary conditions and scenarios for
smart electricity metering roll-out in UK-GB   108
Table 24‑C CBA outcome for smart metering roll-out in
UK-GB.. 109
Table 24‑D  Smart electricity metering deployment set-up
and regulation in UK-NI. 113
Table 24‑E  CBA boundary conditions and scenarios for
smart electricity metering roll-out in UK-NI  114
Table 24‑F CBA outcome for electricity smart metering
roll-out in UK-NI. 115

TABLE OF FIGURES

Figure 1‑A Smart metering roll-out plan in Austria. 6
Figure 1‑B Share of main benefits associated with
electricity smart metering roll-out in Austria. 7
Figure 1‑C Share of main costs associated with
electricity smart metering roll-out in Austria. 8
Figure 2‑A Share of main benefits from electricity smart
metering roll-out in Belgium – Flanders  12
Figure 2‑B Share of main costs from electricity smart
metering roll-out in Belgium – Flanders. 12
Figure 2‑C Share of main benefits from electricity smart
metering roll-out – Region de Bruxelles Capitale  15
Figure 2‑D Share of main costs from electricity smart
metering roll-out in Belgium – Region de Bruxelles Capitale  16
Figure 2‑E Share of main benefits from electricity smart
metering roll-out 19
Figure 2‑F Share of main costs from electricity smart
metering roll-out 19
Figure 3‑A Share of main benefits associated with
electricity smart metering roll-out 23
Figure 3‑B Share of main costs from electricity smart
metering roll-out 23
Figure 4‑A Share of main benefits associated with
electricity smart metering roll-out 29
Figure 4‑B Share of main costs associated with
electricity smart metering roll-out 29
Figure 5‑A Electricity smart metering roll-out plan in
Estonia. 31
Figure 6‑A Electricity smart metering roll-out plan in
Finland. 34
Figure 7‑A Electricity smart metering roll-out plan in
France. 38
Figure 8‑A Electricity smart metering roll-out plan in
Germany. 43
Figure 8‑B Share of main benefits associated with
electricity smart metering roll-out 45
Figure 8‑C Share of main costs associated with
electricity smart metering roll-out 45
Figure 9‑A Electricity smart metering roll-out plan in
Greece. 49
Figure 9‑B Share of main benefits associated with
electricity smart metering roll-out 50
Figure 9‑C Share of main costs associated with
electricity smart metering roll-out 50
Figure 10‑A Electricity smart metering roll-out plan in
Ireland. 54
Figure 12‑A Share of main benefits from electricity smart
metering roll-out 63
Figure 12‑B Share of main costs from electricity smart
metering roll-out 64
Figure 13‑A Share of main benefits associated with smart
metering roll-out 67
Figure 13‑B Share of main costs from electricity smart
metering roll-out 68
Figure 15‑A Electricity smart metering roll-out plan in
Malta. 73
Figure 16‑A Share of main benefits associated with
electricity smart metering roll-out 78
Figure 16‑B Share of main costs associated with
electricity and gas smart metering roll-out 79
Figure 17‑A Electricity smart metering roll-out plan in
Poland. 82
Figure 17‑B Share of main benefits associated with
electricity smart metering roll-out 84
Figure 17‑C Share of main costs associated with
electricity smart metering roll-out 84
Figure 18‑A Share of main benefits associated with
electricity smart metering roll-out 88
Figure 18‑B Share of main costs associated with
electricity smart metering roll-out 88
Figure 19‑A Electricity smart metering roll-out plan in
Romania. 91
Figure 19‑B Share of main benefits associated with
electricity smart metering roll-out 92
Figure 19‑C Share of main costs associated with
electricity smart metering roll-out 92
Figure 20‑A Electricity smart metering roll-out plan in
Slovakia. 95
Figure 20‑B Share of main benefits associated with
electricity smart metering roll-out 97
Figure 20‑C Share of main costs associated with
electricity smart metering roll-out 97
Figure 22‑A Smart electricity metering roll-out in Spain. 102
Figure 24‑A Smart metering roll-out in UK-GB (reference:
CBA) 109
Figure 24‑B Share of main benefits associated with
electricity and gas smart metering roll-out (household only) 110
Figure 24‑C Share of main benefits associated with
electricity and gas smart metering roll-out (households only) 111
Figure 24‑D Share of main benefits associated with
electricity smart metering roll-out 117
Figure 24‑E Share of main costs associated with
electricity smart metering roll-out 117
[1]        Note
– the cost-benefit-analysis for the smart metering roll-out in Hungary was
notified to the Commission services in
December 2013; the respective data are not included in this Staff
Working Document.
[2]        Fonctionnalités
potentielles des compteurs intelligents pour le marché de la distribution de
l'énergie bruxellois, 2011,
Capgemini Consulting and Brugel; http://www.brugel.be/fr/secteur-de-l-energie/smart-metering---le-compteur-intelligent-en-region-bruxelloise/fonctionnalites-potentielles-des-compteurs-intelligents-pour-le-marche-de-distribution-de-l-energie-bruxellois---etude-realisee-pour-le-compte-de-brugel.

[3]        Page
22, "Fonctionnalités potentielles des compteurs intelligents pour le
marché de distribution de l'énergie bruxellois",
version résumée, Mai 2011, Capgemini, 2011
[4]        First
table, page 154, and table page 137, "Potentiele functionaliteiten van
Intelligente Tellers in de Brusselse (energie)
distributie markt", Capgemini Consulting, 2011.
[5]        Regulatory
Asset Base, as assessed by the competent regulatory authority and on the basis
of which a fair remuneration
is allowed to the DSO through an increase in the network tariff.
[6]        For
the purposes of the CBA analysis only.
[7]        CAPEX+OPEX
of the Blanket scenario (not discounted values).
[8]        Benefits
of Basic scenario (represent investments saved due to discontinuation of Basic
scenario)  and external benefits of the Blanket scenario € 81 mn (not
discounted values).
[9]        Benefits
referring to the smart metering systems only.
[10]       External
benefits of the blanket scenario. 
[11]       The
critical value for this is 12.5% of electricity consumption savings in the
household and commercial sector ('MO' as referred in the CBA).
[12]       DK
– a ministerial order on the smart metering roll out framework was signed the
03/12/2013, and issued with effect by
10/12/2013.
[13]       LINKY
web site information  - http://www.erdfdistribution.fr/EN_Linky. 
[14]       30
minutes reading interval in line with the rate for system adjustments reported
in the CBA of the Linky project. 
[15]       BSI
– the Federal Office for Information Security.
[16]       Meters
with display but without external communication.
[17]       No
formal end date. Smart metering systems have to be installed continuously in
additional mandatory cases such as new
buildings & renovations, connecting new decentralised generation plants,
electric charging stations, heat pumps etc.
[18]       The
CBA document reports though registration and collection of 30 min. profiles
(linked to functionality (b) of the 2012/148/EU Recommendation).
[19]       Peak/off-peak
price ratios equal to 1.7. 
[20]       Instantaneous
power.
[21]       Cost-benefit
analysis of the roll-out of smart electricity metering grid in Lithuania, Ernst
& Young, 2012.
[22]       Related
to households and commercial users under 30 kW.
[23]       There
is no direct charge to the consumer and savings resulting from the reduction in
non-technical losses and reduced
need for manual meter reading are expected to cover the cost of meters and
installation over a period significantly lower than the lifetime of the meters.
[24]       ‘Administrative
off’ means: no information on the electricity consumption data has been exchanged
with the DSO or any third party; the consumer
himself can still though have access to his metering data (via the consumer
port).
[25]       DSO
is responsible party for making the data available. However, the supplier has
also access to metering data since it is the responsible party for collecting
and validating the metering data.  
[26]       Legislation
is based on 100% meters offered by DSO’s by 2020, the actual penetration rate
depends on the acceptation rate.
[27]       For
gas and electricity.
[28]       idem.
[29]       http://www.inovcity.pt/en/Pages/inovgrid.aspx.

[30]       Number
of metering points at low voltage level.
[31]       Smart
Metering Equipment Technical Specifications (SMETS) document describes, amongst
other, the minimum functional requirements for
electricity and gas smart meters.
[32]       As
weighted average electricity savings across different groups of the metering
population.