The Roll-out of Smart Metering between Discording Interests and Institutional Inertia

Abstract

Smart metering is alleged to be opening up a new frontier for energy supply and consumer empowerment. These are both very important elements of the German energy transition strategy. Since the second half of the 1990s, the diffusion of smart metering has become an issue that has increasingly drawn attention at both theoretical and empirical levels. A high number of countries in the European Union introduced smart meters in homes – some on a large scale – and there have been massive investments. The diffusion of smart metering is not only significant in Europe, where the EU legislation (especially the Energy Services Directive and the 3rd Energy Package) has been an important driver, but also in the USA and in countries with high electricity demand profiles in East Asia. The most recurrently cited reasons for a large-scale roll-out are that they allow frequent or even realtime reading and billing; peak load management/shifting and improve energy efficiency (ERGEG 2009; KEMA 2012; Smart Regions 2013). In Germany – where along with the UK, France and Italy there have been high investments in smart grid technology – there has been no official commitment to the deployment of smart meters. Smart grid is an element of the energy transition strategy, but a roll-out of smart metering on a large scale is not part of this strategy. In the absence of a wide-ranging national policy, smart metering has been left to market forces and has been “relegated” to pilot projects and some commercial initiatives. In July 2013, after years of inertia, the publication of the long awaited cost-benefit analysis on behalf of the Ministry for Economy (Ernst & Young 2013) put smart metering again in focus, albeit in the middle of the