Smart Meter Rollout in Germany: When are we going to catch up?

Spain, Italy, Sweden, the Netherlands, Estonia, Finland, Denmark – all these countries have in common that they have either already completed their smart meter rollout or at least reached over 80 percent coverage. In Germany, however, the topic of smart meters is still in its infancy. At one of the events organized by the German Energy Agency (dena) in October 2022, Bouke Stoffelsma, a board member of the metering service provider Hausheld, mentioned the goal of reaching one percent coverage by 2023. This means that the actual coverage is currently below one percent. Why the smart meter rollout is hampered throughout Germany, what successful countries do differently, and how useful smart meter data are in the first place – let’s dive deeper into the topic and take a closer look at these questions.

Nationwide rollout of smart meters is slowed down by regulatory and cultural hurdles

The German government gave a green light for a countrywide smart meter rollout at the beginning of 2020 – yet it was stopped before it even began. The Münster Higher Administrative Court interpreted the decree (or “market statement“) issued by the German Federal Office for Information Security (BSI), as “presumably unlawful” and suspended the obligation to install smart metering systems. It was not until after the German Metering Point Operation Act was amended – interestingly, just five days before the oral hearing of the main proceedings – that the smart meter rollout could be resumed for the time being.

It should be noted, though, that already in 2016, the federal government passed the so-called Act on the Digitization of the Energy Transition, creating a framework for a mandatory installation of intelligent metering systems. So why did it take the government four long years to give a green light to the smart meter rollout in the first place? This topic was addressed at dena’s latest event “Reboot for the Smart Meter Rollout – Dawn of a Digital Energy System” – among other questions.

Smart metering technology is there, but agility is missing

If Germany has fallen behind other countries in the smart meter agenda, it’s not for the lack of technology. There are secure intelligent metering systems on the German market, as well as strategies that will allow for a swift implementation of the suggested measures. Some metering service providers implement one single smart meter gateway for multiple intelligent electricity meters with an integrated wireless communication module. This enables the installation to take place on a street-by-street basis instead of carrying it out selectively for individual households.

Federal Minister for Economic Affairs and Climate Action Robert Habeck now wants to remove legal obstacles and bureaucracy as well as possible political hurdles that impede a nationwide smart meter rollout. The Metering Point Operation Act is planned to be revised to that end.

According to Robert Busch, director of the German Association of Energy Market Innovators (bne), not all blame can be assigned to politics, as Germany “doesn’t lead in agility but rather in complexity”. Dr Bernhard Rohleder, CEO of Bitkom, echoed these sentiments, saying that Germany must dare to be “more beta” as well as becoming more agile and flexible in order to become less perfectionist and also to remain open to continuously improve on already implemented products.

Dr Peter Heuell, Executive Managing Director at EMH metering GmbH, has been involved in several European smart meter rollouts. What he observed was that the rollout often took place in one fell swoop per region, with old meters being replaced with intelligent metering systems by regular technicians. Only after the replacement was completed, did the responsible grid operators examine their own systems as to whether the installed smart meters were collecting and transmitting data as expected, sending specialized technicians only to the spots where the devices did not work properly.

In Germany, however, one has to “hire a trained technician from the very beginning because he has to stay at every single spot until the whole thing works”, according to Dr Heuell. This practice is extremely inefficient for a smart meter rollout that is supposed to be fast and economically viable.

What made successful smart meter rollouts in other countries different?

Many European countries have led by example and shown that things can be done differently; not necessarily faster but with more consistency and determination. Germany’s digital industry association Bitkom analyzed the success factors in four countries (Italy, Spain, Sweden and the Netherlands) and summarized them in a 2022 paper (pdf).

What’s interesting is that even though the processes and incentives differed from country to country, all four have one factor in common: the state was not the driving force behind the smart meters’ implementation, but rather the energy providers and the grid operators themselves.

However, it’s also important that the state created a clear legal basis for a faster, more dynamic rollout – either through comparatively loose regulations from the very beginning or through subsequent regulatory amendments.

For example, Sweden’s government passed a resolution mandating a switch from yearly to monthly readings of electricity meters; there were, however, no restrictions or guidelines regarding the technical implementation. To save the cost of manual readings on a monthly basis, the electricity suppliers opted for remote reading via smart meter gateway. The Italian energy supplier ENEL Distribuzione was equally motivated by the cost-saving factor in meter reading when it initiated the smart meter rollout in its country.

In stark contrast to German perfectionism stands the example of the Netherlands, where the nationwide rollout took place with smart meters that had a reduced range of functions. Admittedly, this only happened after some regulations were amended as a response to protests against the perceived violation of personal data rights. This experience echoes the sentiments expressed by bne’s Robert Busch that it must be made possible to “continuously improve already implemented products”.

Smart meter data: what’s the use for grid operators?

“[Intelligent] metering systems are the backbone of the energy system”, said one of the slides from Hausheld’s Bouke Stoffelsma at dena’s “Reboot for the Smart Meter Rollout – Dawn of a Digital Energy System”

Topics such as grid transparency, load balancing and load flow control have in fact never been more important than today, when more and more electricity is produced by renewable energy sources, while, at the same time, more electricity is consumed due to the trend towards e-mobility.

The Estonian distribution system operator Elektrilevi demonstrates how these issues can be tackled through intelligent processing of the data gathered via a smart meter gateway. Together with the grid management service provider Enefit Connect OÜ, they created a digital twin of their grid in envelio’s Intelligent Grid Platform. The digital twin not only significantly increases the level of transparency about the current state of the grid, but also provides a considerably more accurate basis for grid simulations and all processes related to strategic grid planning.

The RES project Estonia, supported by the German Federal Ministry for Economic Affairs and Climate Action as part of the Renewable Energy Solutions Programme of the German Energy Solutions Initiative, aims to make the distribution grid future-proof for new power generation systems as well as new loads. In combination with topological and structural grid information, smart meter data represents the necessary foundation for the creation of a digital twin of Elektrilevi’s distribution grid.

Conclusion

In October 2022, Robert Habeck announced a reboot for the smart meter rollout in Germany. Many industry experts welcome this news, but time is running out to achieve the energy transition goals until 2030. Experts note the sluggish and sometimes rigid approach of the federal government, the perfectionist mentality and organizational shortcomings as reasons why Germany has not even started the smart meter rollout, while some countries have already transitioned to phase 2 (installation of the second generation intelligent metering systems).

Feel free to share your thoughts: What other hurdles do you see on the way to the nationwide smart meter rollout? If you are a grid operator, we would also like to know your opinion on what advantages – or disadvantages – you see in the implementation of smart meters.

German Energy Agency (dena)

The German Energy Agency (dena) is a centre of excellence for the applied energy transition and climate protection. dena studies the challenges of building a climate-neutral society and supports the German government in achieving its energy and climate policy objectives. Since its foundation in 2000, dena has worked to develop and implement solutions and bring together national and international partners from politics, industry, the scientific community and all parts of society. dena is a project enterprise and a public company owned by the German federal government. dena’s shareholders are the Federal Republic of Germany and the KfW Group.
www.dena.de/en

German Energy Solutions Initiative

With the aim of positioning German technologies and know-how worldwide, the German Energy Solutions Initiative of the Federal Ministry of Economics and Climate Action (BMWK) supports suppliers of climate-friendly energy solutions in opening up foreign markets. The focus lies on renewable energies, energy efficiency, smart grids and storage, as well as technologies such as power-to-gas and fuel cells. Aimed in particular at small and medium-sized enterprises, the German Energy Solutions Initiative supports participants through measures to prepare market entry as well as to prospect, develop and secure new markets.
www.german-energy-solutions.de/en

Renewable Energy Solutions Programme (RES Programme)

With the RES programme, the Energy Export Initiative of the Federal Ministry of Economics and Climate Action (BMWK) helps German companies in the renewable energy and energy efficiency sectors enter new markets. Within the framework of the programme, reference plants are installed and marketed with the support of the German Energy Agency (dena). Information and training activities help ensure a sustainable market entry and demonstrate the quality of climate-friendly technologies made in Germany.
https://www.german-energy-solutions.de/GES/Redaktion/EN/Basepages/Services/dena-res.html