Smart metering for households: cost and benefits for Netherlands

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Information about Smart metering for households: cost and benefits for Netherlands

Published on May 22, 2007

Author: Vetruve


Smart Metering for Households: Cost and Benefits for the Netherlands Hans-Paul Siderius SenterNovem, The Netherlands 1

Overview of presentation • Policy background: Energy Services Directive article 13 • SenterNovem study on costs and benefits smart metering: Standardization – Cost Benefit analysis – Market Consultation – • Conclusion and discussion, including: Some developments in the Dutch energy market – relevant for metering. IEE project ESMA. –

Policy background • Energy Services Directive (2006/32/EC), article 13(1): • Member States shall ensure that, in so far it is • technically possible, • financially reasonable and • proportionate in relation to the potential energy savings • final customers … are provided with competitively priced • individual meters that accurately reflect the final customer’s • actual energy consumption and that provide information on • actual time of use.

Goal and set-up of SenterNovem study Cost benefit analysis of large scale introduction of smart metering for residential customers in the Netherlands. • 3 parts: • Study on standardisation smart metering (by NEN) • Cost benefit analysis of large scale introduction smart metering (by KEMA) • Consultation market players (by SenterNovem)

What is a smart meter? woning display display trim consumption loggen logging 1234 1234 1234 1234 verwerken calculation 5678 5678 measurement 5678 5678 aansturen control switch on/off modem modem Electricity Gas

Specifications smart meter • Counter (kWh) • Logging consumption and return delivery (PV!) per period • Outages • Internal clock • 2 way communications Automatic meter reading (standard format) – Switch on – switch off possibility on distance – • Standard output for data

Standardisation: conclusions • Standardisation is essential, but NOT the only condition for large scale introduction of smart metering • Good support by market players • Incentive necessary from government as regulator: Definition of functionality smart meters (market will introduce standardisation)

Cost benefit analys: base case and target case Base case Nulsituatie handmatige handheld handheld verwerking handmatige processing processing verwerking Database: standaard conventional meter -netoperator meter -supplier Target case woning display display kWh,m3, € kWh, m3, € netoperator Interface, Interface, smart gateway Database measuring measuring supplier meter protocol protocol …

Cost benefit analysis: result + 1,2 billion EUR Efficientere storingsafhandeling door slimme meter E Snellere storingsmelding door slimme meter E Effectievere aanpak wanbetalers door slimme meter G Effectievere aanpak wanbetalers door slimme meter E Snellere detectie van fraude E-meters (stroomdiefstal) Verschuiving elektriciteitsverbruik door vraagresponse Makkelijker switchen leidt tot meer concurrentie en prijsdaling G Makkelijker switchen leidt tot meer concurrentie en prijsdaling E Maandelijkse facturering energieverbruik door leverancier Efficiënt verloop switchproces door betere meterstanden G Efficiënt verloop switchproces door betere meterstanden E Vermindering klachten G via call center Vermindering klachten E via call center Besparing kosten jaarlijkse bepaling meterstanden Besparing kosten fysiek meteropnemen E+G Zuiniger gedrag bewoners t.a.v. gasverbruik Zuiniger gedrag bewoners t.a.v. elektriciteitsverbruik Inrichting infra t.b.v. terugkoppeling meetdata naar verbruikers Inrichten datacentra voor meetdata Inrichten data-infrastructuur via ADSL of kabel Inrichten data-infrastructuur via GSM/GPRS -60 -50 -40 -30 -20 -10 0 100 200 300 400 500 600 700 800 900 100 Inrichten data-infrastructuur via Power Line Communications (PLC) 0 0 0 0 0 0 0 Aanschaf en installatie slimme gasmeters MEURO

Cost benefit analysis: + 1,2 billion EUR most important costs MEUR Purchase and installation smart meters (E+G) 798 Monthly billing energy consumption by supplier 437 Organization the data-infrastructure via PLC/internet/GSM 354 most important benefits MEUR Easier switching more price-competition reduction E+G price 1.353 Less complaining via call center 927

Cost benefit analysis: Who pays, who benefits 4.500 4.000 costs 3.500 benefits 3.000 2.500 MEUR 2.000 1.500 1.000 500 0 s ld t r s r or en lie to e r o ce t ni ra ra eh pp m pa u pe pe rn us su od m ve to o ho pr co gy et ne go ln gy er g rin ca en er en e lo et m

Cost benefit analysis: Sensitivity analysis Transition time (10 years) NPV (in M€) 20 years 1.000 5 years 1.400 Meter (100% gas + electricity) Only 100% electricity meters 400 5% electricity - and gas meters 50 Reduction energy price (E -0,0025; G -0,0050) E -0,0010 EUR/kWh; G -0,0020 EUR/m3 414 E -0,0040 EUR/kWh; G -0,0080 EUR/m3 2.037 Data infrastructure (40%PLC, 40% internet, 20%GSM) 100% PLC 1.500 100% internet 1.600 100% GSM 0

Cost benefit analysis: conclusions • Net present value is positive, but: social cost/benefit analysis is not equal to a cost/ benefit analysis performed by an individual company Split incentives Benefit for each individual household small • Discussion about benefits for households Expected reduction of energy prices? Expected energy savings by feedback?

Market consultation: conclusions • Market favourable on large scale introduction of smart metering ESD can be an impulse – Definition of minimum requirements smart meters – • Shared starting points Energy company needs accurate data and on time – Energy company prefers independency of net operator – • Conflicting starting points Open meter market – Closed meter market –

Conclusions and discussion • Smart metering for households has a positive cost-benefit balance. • The market is favourable of large scale introduction. • Discussion on: Metering market – Feedback benefits for households –

Development of meter market in NL (1) • Smart metering as ‘standard infrastructure’ Standardisation of reading smart meters – Net operator responsible for hardware – Supplier responsible for data – Regulation of process of transition – • Energy supplier – market Services (e.g. feedback) based on smart meter – data should be market driven Possibility for add-on modules to smart meter – Supplier determines priority –

Development of meter market in NL (2) • Agreement on large scale implementation of smart meters in households is prepared by ministry of Economic Affairs and sector (expected 1 September 2006): Transition time – Responsibilities in transition period – Priorities –

ESMA: European Smart Meter Alliance • IEE Save project on smart metering: • SenterNovem responsible for study on energy savings realised by different forms of feedback to consumers, especially: Long term development of savings – Savings related to different forms of feedback – • Interest in field trials with smart metering and feedback to obtain data!

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