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An Overview of ICER’s Smart Metering Report

COMPETITIVENESS AND AFFORDABILITY

EXPERIENCES ON THE REGULATORY APPROACHES COMPETITIVENESS AND AFFORDABILITY TO THE IMPLEMENTATION OF SMART METERS


ICER’s rationale for its review of international case studies

T

he report by the International Confederation of Energy Regulators (ICER) on the “Experiences on the Regulatory Approaches to the Implementation of Smart

Meters� recognises that the implementation of smart meters is being actively considered in many jurisdictions across the world.

The implementation of smart on those regulatory jurisdicmeters is a complex task with tions with direct experience of many difficult decisions and the implementation of smart choices. ICER has asked its metering systems. members with experience of In this way, ICER hopes to proimplementing smart meters to vide information which will ascontribute case studies which sist the many regulators, policy explain the regulatory chalmakers and commercial organlenges they have faced, how isations who are still faced with they addressed them and their the challenge of smart meter experience of the outcome. implementation. We have also prepared an overview report Key findings which analyses the case studThe common Smart meters enable ies and draws central chalfaster automated comc o m m o n lenges identhemes from tified from munication of informathem on the the case tion to consumers on key chalstudies relate their real time energy lenges to be to: the design consumption addressed. of the regulatory framework In order to prepare for smart meterthe report a drafting ing; the rolling out of group of interested national smart meters; the organisation regulatory authorities and reof the decision making process gional regulatory associations itself; and the protection of was formed under the umconsumer interests from pobrella of ICER. The approach tential negative consequences used was the development of a of smart meter implementaportfolio of case studies based tion.


(c) ICER - Sustainable Energy Week 2011 - ICER Conference - Lord Mogg (ICER), M. Crouch (CEER), R. Cowart (RAP)

Within the spectrum of the compiled case studies it is recognised that the policy impetus and implementation considerations relative to electricity smart meters are, in the majority of cases, different from those relevant to gas smart meters. This has often resulted in either separate and distinct plans for the roll-out of the two infrastructures within a jurisdiction or the decision to implement only electricity smart meters at this time. The findings contained in the overview report are focused on the regulatory ap-

proaches to the implementation of smart meters and are generally applicable to both infrastructures, but the specific case studies contain a more detailed description of the treatment of gas and electricity smart metering.

Experience of the practical implementation of smart meters is growing and successful solutions have been found to overcome common challenges in many countries. The exchange of experience and increased cooperation at regional and international level will help countries to improve their own implementation strategies.

Photo: Energy Retailers A ssociation/PA


PICTURE Ph o : ist

to

oc k ph ot om o.c

The six markets which have been examined through case studies are: Electricity and gas: • France • Great Britain • Italy Electricity: • Canada – Ontario • Sweden • United States of America – Colorado

Smart meters enable faster automated communication PICTURE of information to consumers on their real time energy consumption, and to service providers, including gas and electricity suppliers. Smart meters can also enable the provision of new services to consumers. These advantages and opportunities mean that the implementation of smart meters is being actively considered in many jurisdictions across the world. The countries surveyed all have mature gas or electricity markets. However, there are very marked differences in the level of established competition, market structure and market size. As a result, the approaches adopted to tackle identified challenges relating to the implementation of smart meters are specific to the circumstances of each market. Nevertheless, there are marked similarities which make comparisons between the different markets a useful exercise.


Main Conclusions & Recommendations

VIP

Main findings from the experiences reflected in the case studies:

• A clear decision on which organisation is leading on smart metering policy is needed at an early stage. The government or regulator must ensure that the smart metering model is based on a sound legal and regulatory framework. • Experience resulting from pilots and full implementation is growing rapidly which may reduce the need for pilot exercises. • Experience suggests that in each market the full implementation of smart metering may take some years to complete. • An impact assessment is a useful tool to develop sound policy proposals. • In countries where smart meters have been successfully implemented, the technical framework is clearly set out together with clear roles and responsibilities for market participants.

• The level and depth of engagement of consumers in the policy making process should be established early on. • The measures required to protect consumers from the potentially negative impact of smart meter implementation should be carefully considered. The main challenges identified in the case studies are the risk that consumers will be unable to make rational choices if the time of day tariffs offered by suppliers are too complex, and that the data produced by smart meters could be misused if not properly protected. • Consideration should be given to the ability of the proposed smart meter model to accommodate future developments in technology and the market (e.g. smart grids).


International Confederation of Energy Regulators (ICER) The International Confederation of Energy Regulators (ICER) was created at the Fourth World Forum on Energy Regulation (WFER), in 2009. It is a voluntary framework for the cooperation of energy regulators from around the globe. Its aim is to improve public and policy maker awareness and understanding of energy regulation, and to play a role in addressing a wide spectrum of socio-economic, environmental and market issues. Through ICER, energy regulatory issues transcending regional and national boundaries can be addressed through dialogue and cooperation on a global scale. ICER’s membership includes over 200 regulatory authorities over six continents.

The virtual work of ICER ICER is a virtual organisation, the backbone of which is its website (www.icer-regulators.net) and its four virtual working groups (VWGs):

Photo: stockfresh.com

VWG1: Opening & Integration of Regional Markets VWG2: Technology Change VWG3: Consumers Issues VWG4: Education, Training & Best Practices


ICER Reports:

Publications

• Examples of Methodologies Utilized to Manage Competitiveness and Affordability Issues related to the Introduction of Renewable Forms of Electricity Generation and New Technologies: An Overview Report of a Compilation of Four Case Studies, April 2012, Ref. I12-C&A-11-04 • Experiences on the Regulatory Approaches to the Implementation of Smart Meters, April 2012, Ref. I12-C&A-08-01 • Role of Energy Regulators in Guaranteeing Reliability and Security of Supply - National, Regional and Global Dimensions, March 2012, Ref. I12-SoS-08-03 • Renewable Energy and Distributed Generation: International Case Studies on Technical and Economic Considerations, February 2012, Ref. I12-CC-17-03 • ICER Response to the European Commission Public Consultation on the External Dimension of the EU Energy Policy, Ref. I11-SC-05-05, 21 February 2011 • ICER Energy Efficiency Report, Ref. I10-SC-02-04, June 2010 • ICER Work Plan 2010-2012 • ICER 2010 Annual Report • World Energy Regulators’ Statement on Climate Change, 20 October 2009

ICER Factsheets:

The full report, as well as all others listed here, can be found at

http://bit.ly/ICERreports

• ICER’s Renewables and New Technologies Report, Ref. FS-12-04, August 2012 • ICER’s Security of Supply Report, Ref. FS-12-01, May 2012 • ICER’s Renewable Energy and Distributed Generation Report, Ref. FS-12-02, May 2012 • ICER’s Smart Metering Report, Ref. FS-12-03, May 2012 • Brochure on the International Confederation of Energy Regulators (ICER), Ref. FS-12-05, May 2012 • Regulatory Practices for the Promotion of Energy Efficiency, Ref. FS-11-01, April 2011

The content of this leaflet does not necessarily reflect the opinion of the individual members of ICER.


www.icer-regulators.net

Designed

by:

Factsheet Ref: FS-2012-03

Valentina CalĂ 

office@icer-regulators.net

With the support of the European Commission. This publication reflects the views only of the author(s), and

the

Commission

cannot be held responsible for any use which may be made of the information contained therein.


ICER SM VWG3