Home > Market Research > Mobile Networks > Smart Metering in Western Europe - 7th Edition

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Market Study
Published: July 2010
Pages: 150
Tables: For full details, please email keithw@cmsinfo.com
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Research from: Berg Insight
Sector: Mobile Networks

Smart grid is one of the latest buzzwords in the energy sector and has become a catchphrase
for politicians, academics and industry leaders alike. The vision is to exploit the latest
technology to address the immense challenge of securing the energy supply in the 21st
century. The concept of smart grids is at times put forward as a revolutionary solution to a
wide array of problems, ranging from the West’s dependency on Middle Eastern oil to global
warming. A more realistic expectation is however that smart grid technology will contribute to
improved efficiency and reliability in energy distribution and better optimisation in allocation
of resources and utilisation of assets.
Smart metering is widely regarded as the cornerstone for future smart grids. In the history of
metering technology, smart metering represents the third stage in a chain of developments
spanning more than 100 years. Manually read meters have been around since the advent of
the utility industry in the late 19th century. Over the last three decades, automated meter
reading (AMR) based on one-way or two-way communication has evolved. Smart metering
broadens the scope of AMR beyond just meter readings with additional features enabled by
two-way data communication. A smart metering solution generally delivers a range of
applications using an infrastructure comprising networked meters, communication networks
and data collection and management systems.
Smart electricity meters are being introduced all over the developed world. Europe had an
early start in the 2000s when Enel completed the first nationwide rollout of smart meters to
more than 30 million customers in Italy. Later deployments followed in the Nordic countries
and at the beginning of the 2010s, Spain, France and the UK are assuming the positions as
the most active markets. Berg Insight forecasts that the installed base of smart electricity
meters in EU23+2 will grow at a compound annual growth rate of 17.9 percent between 2009
and 2015 to reach 111.4 million units at the end of the period. Annual shipments of smart
electricy meters are anticipated to exceed 20 million units in the mid-2010s.
The adoption of smart metering in Europe is to a large extent driven by regulations. A majority
of the countries in Western Europe have adopted policies of regulation-driven introduction of
smart meters, which is also supported by EU legislation such as the 3rd Energy Package.
Sweden was first, followed by the Netherlands, Ireland, Norway, France, Italy, Spain, the UK
and Finland. In addition there are informal commitments to smart meters in Portugal and
Malta through projects launched by government-controlled national utilities. Germany on the
other hand has only implemented some weaker regularory drivers and the federal
government has declared that it has no intentions to push for a quick nationwide rollout.
Iberia will become the next focal point for smart metering in Europe. Following a build-up
phase in 2010, massive installations will take off in Spain during 2011, as the two leading
market players Endesa and Iberdrola go ahead with full-scale rollouts. Gas Natural Fenosa is
expected to follow close behind, potentially deploying smart metering solutions for both
electricity and gas customers. Furthermore EDP plans a nationwide rollout in Portugal that
can be coordinated with the mandatory deployment by its distribution network subsidiary in
Spain. Berg Insight forecasts that annual shipments of smart electricity meters in Iberia will
peak at around 6 million units per year during 2014–2015 before the market gradually slows
down in the final years before the installation deadline in 2018.
France and the UK became active markets in 2010 as ERDF and British Gas entered the initial
phases of their smart meter installation programmes. ERDF plans to start with a massive
nationwide rollout from 2012 and will need to deploy around 6 million units per year between
2014 and 2017 in order to fulfil the regulatory obligations that will take effect in 2018. The UK
market is anticipated to follow a slower more protracted trajectory towards full penetration in
2020. There is a good possibility that other players will follow the example of British Gas and
exclusively install smart or “smart-ready” electricity meters in the next few years. But since the
full technical specifications have not yet been agreed, there will probably not be any
wholesale replacement schemes in the immediate future.

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Table of Contents

 Executive summary.........1
1 Electricity, gas and district heating distribution in Europe ..3
1.1 Energy industry players...........3
1.2 Electricity market .........5
1.3 Gas market ....10
1.4 District heating market...........13
2 Smart metering ......15
2.1 Introduction to smart grids ....15
2.2 Smart metering ..........18
2.2.1 Smart metering applications .......18
2.2.2 Smart metering infrastructure......21
2.2.3 Benefits of smart metering ..........24
2.3 Project strategies .......26
2.3.1 System design and sourcing ......26
2.3.2 Rollout and integration ....27
2.3.3 Implementation and operation ....27
2.3.4 Communicating with customers .28
2.4 Regulatory issues ......29
2.4.1 Models for the introduction of smart meters .......29
2.4.2 Standardisation initiatives ...........30
2.4.3 Individual rights issues....32
3 PLC and wireless communication technologies ...35
3.1 PLC versus wireless communication.35
3.1.1 PLC point-to-multipoint ...35
3.1.2 Wireless Mesh point-to-multipoint...........36
3.1.3 Cellular networks point-to-point ..38
4.4 System integrators.....88
5 Market analysis ......91
5.1 Market drivers and restraints .92
5.1.1 Macroeconomic factors...92
5.1.2 Regulatory environment ..94
5.1.3 Competitive environment 97
5.1.4 Industry standards...........98
5.2 Smart metering market forecast ........99
5.2.1 Geographical markets...100
5.2.2 Capital expenditure forecast .....103
5.3 Technology trends...104
5.4 Industry analysis......105
6 Market profiles: Northern Europe 109
6.1 Sweden........111
6.1.1 Electricity distribution industry structure...........111
6.1.2 Metering regulatory environment ..........112
6.1.3 Smart metering market developments..113
6.1.4 The outcome of a regulation driven rollout .......116
6.2 Denmark ......119
6.2.1 Electricity distribution industry structure...........119
6.2.2 Metering regulatory environment ..........121
6.2.3 Smart metering market developments..121
6.3 Finland .........123
6.3.1 Electricity distribution industry structure...........123
6.3.2 Metering regulatory environment ..........127
6.3.3 Smart metering market developments..127
6.4 Norway.........129
6.4.1 Electricity distribution industry structure...........129
6.4.2 Metering regulatory environment ..........130
6.4.3 Smart metering market developments..132
7 Market profiles: Western Europe .135
7.1 Austria..........136
7.1.1 Electricity and gas distribution industry structure.........136
7.1.2 Metering regulatory environment and smart metering market developments .137
7.2 France..........138
7.2.1 Electricity and gas distribution industry structure.........138
7.2.2 Metering regulatory environment and smart metering market developments .139
7.3 Germany......140
7.3.1 Electricity and gas distribution industry structure.........141
7.3.2 Metering regulatory environment ..........143
7.3.3 Smart meter market developments.......144
7.4 Ireland..........146
7.4.1 Electricity and gas distribution industry structure.........146
7.4.2 Nationwide program for deployment of smart meters ..147
7.5 The Netherlands ......149
7.5.1 Electricity and gas distribution industry structure.........149
7.5.2 Metering regulatory environment and smart meter market developments ......151
7.6 United Kingdom.......153
7.6.1 Electricity and gas distribution industry structure.........153
7.6.2 Metering regulatory environment ..........156
7.6.3 The UK government's preferred rollout model..157
7.6.4 Early smart metering projects ...157
8 Market profiles: Southern Europe159
8.1 Italy ..160
8.1.1 Electricity and gas distribution industry structure.........160
8.1.2 Metering regulatory environment ..........162
8.1.3 Smart metering market developments..163
8.2 Spain164
8.2.1 Electricity and gas distribution industry structure.........164
8.2.2 Metering regulatory environment ..........165
8.2.3 Smart metering market developments..166
8.3 Portugal .......168
8.3.1 Electricity and gas distribution industry structure.........168
8.3.2 Metering regulatory environment and smart metering market developments .169
8.4 Malta 170
8.4.1 Utility industry structure.170
8.4.2 National smart grid project........171
9 Case studies: Smart metering projects in Europe...........173
9.1 Enel..173
9.1.1 The Telegestore project in Italy.173
9.1.2 The Meters & More initiative......175
9.1.3 Endesa’s smart metering project in Spain ........176
9.2 ERDF177
9.2.1 The Linky Programme...177
9.2.2 System development and full-scale pilot ..........179
9.2.3 Smart home pilot projects .........180
9.3 Iberdrola ......180
9.3.1 The PRIME project ........180
9.3.2 Smart metering projects in Spain and the US ..182
9.4 British Gas ...182
9.4.1 Smart meter rollout to 1 million British homes by 2012183
9.4.2 System architecture.......183
9.5 EDP..184
9.5.1 The InovGrid Project .....184
9.5.2 The Évora Inovcity smart grid demonstration project...185
9.6 Fortum .........186
9.6.1 Smart meter rollout in Sweden..186
9.6.2 Smart meter rollout in Finland...188
9.7 Helsingin Energia ....188
9.8 Smart metering projects in Central Eastern Europe ...........189
Glossary .........191
Index
List of Figures
Figure 1.1: Top 25 energy companies, by turnover (EU23+2 2009) .....4
Figure 1.2: Electricity generation and consumption data (EU27 2009) .5
Figure 1.3: Electricity market statistics (EU23+2 2009) .7
Figure 1.4: Top 25 electricity DSOs (EU27+2 2010)......9
Figure 1.5: Gas market statistics (EU23+2 2009) ........11
Figure 1.6: Top 25 gas DSOs (EU27+2 2010) .12
Figure 1.7: District heating market statistics (EU23+2 2007)...13
Figure 2.1: Smart metering infrastructure.........21
Figure 2.2: Examples of smart electricity meters..........22
Figure 2.3: OPEN Meter project partners .........32
Figure 3.1: PLC point-to-multipoint communication infrastructure.......36
Figure 3.2: Wireless Mesh point-to-multipoint communication infrastructure..37
Figure 3.3: Cellular point-to-point communication infrastructure.........38
Figure 3.4: Selected members of the ZigBee Alliance by industry ......48
Figure 4.1: Energy meter vendor company data (World/Europe, FY2009)......56
Figure 4.2: Landis+Gyr smart metering product portfolio (Europe 2009) .......57
Figure 4.3: Itron smart metering product portfolio (Europe 2010) .......61
Figure 4.4: Echelon NES VAR partners 74
Figure 4.5: Examples of system integrators active in smart metering..89
Figure 5.1: Household power consumption and retail prices (EU23+2 2009) 93
Figure 5.2: Final year for deployment of smart electricity meters by country ..95
Figure 5.3: Smart meter shipments and penetration rate (EU23+2 2009–2015).........99
Figure 5.4: Smart meter shipments by region (EU23+2 2009–2015) 101
Figure 5.5: Smart metering capital expenditure forecast (EU23+2 2009–2015) .......102
Figure 5.6: Estimated capital cost for some smart metering projects in Europe .......103
Figure 5.7: Smart electricity meter supplier market shares (EU27+2 Q2-2010)........107
Figure 6.1: Smart meter contracts by country (Northern Europe 2010).........109
Figure 6.2: SM-contracts in the Nordic region by meter supplier and contractor (2010) ......110
Figure 6.3: Top 10 electricity DSOs (Sweden, 2010)..112
Figure 6.4: SM contracts awarded by top 10 DSOs in Sweden.........114
Figure 6.5: SM vendor selection of medium sized DSOs in Sweden (2009) .115
Figure 6.6: Features of smart meters in Sweden........116
Figure 6.7: Communication technologies of smart meters in Sweden ..........117
Figure 6.8: Share of meter values collected on time for Swedish DSOs (October 2009) ......118
Figure 6.9: Top 10 electricity DSOs (Denmark, 2010)120
Figure 6.10: Major SM projects in Denmark (June 2010).......122
Figure 6.11: Top 10 electricity DSOs (Finland, 2010).124
Figure 6.12: Top 50 smart metering contracts in Finland (June 2010) ..........125
Figure 6.13: Top 10 electricity DSOs (Norway, 2010) 130
Figure 6.14: Major SM projects in Norway (June 2010) .........133
Figure 7.1: Major smart electricity metering projects in Western Europe (June 2010) ..........135
Figure 7.2: Top 10 electricity and gas DSOs (Austria, 2010) .137
Figure 7.3: Top 50 electricity DSOs (Germany, 2010)142
Figure 7.4: Major smart electricity metering projects in Germany (2010) ......145
Figure 7.5: Electricity and gas DSOs (Netherlands, 2010).....150
Figure 7.6: Electricity DSOs (UK, 2010)..........154
Figure 7.7: Gas DSOs (UK, 2009).......155
Figure 7.8: Electricity and gas retailer market shares (UK, 2009) ......155
Figure 8.1: Major smart electricity metering projects in Southern Europe (June 2010).........159
Figure 8.2: Top 20 electricity and gas DSOs (Italy, 2010) ......161
Figure 8.3: Major electricity and gas DSOs (Spain, 2010) .....165
Figure 8.4: Top 5 DSOs (Portugal, 2010) .......169
Figure 9.1: Telegestore annual operational data (Italy, 2009)174
Figure 9.2: Conceptual system architechture for ERDF’s smart metering system ....178

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