In July, Sweden became the first European nation to achieve 100% smart meter rollout — putting that country at the forefront of demand response potential. This regulation-driven rollout now requires monthly meter readings.

Meanwhile, Sweden also is making progress toward its ambitious goal of installing 30 terawatt hours (TWh) of wind energy capacity by 2020…

By Alicia Carrasco, eMeter Director for EMEA Regulatory Affairs

To balance this shift toward more intermittent renewable energy, Sweden’s energy market regulation agency (Energy Market Inspectorate) claims that widely geographically distributed new wind plants across the country will be the best solution. This should help Sweden better integrate and manage wind power production, while also taking advantage of demand response through smart metering.

Swedish households are already equipped for price-based demand response. The smart meters installed across Sweden can gather data hourly, and appropriate communication technology exists. Therefore, implementing price-based demand response in Sweden is now a matter of waiting for enabling regulations.

In order to realize the full benefits of demand response (and also manage micro-generation and private energy production), meters must record and transmit data more frequently. Earlier this year Minister of Enterprise and Energy Maud Olofsson announced that the Swedish government is considering changing how often electricity companies record usage and read meters. According to Olofsson, unlike today’s electric bills (which are based on a monthly average price), hourly readings would help Swedish consumers better understand how energy demand causes prices to fluctuate.

Consumer engagement software (such as eMeter’s Energy Engage) would maximize the potential of Sweden’s installed smart meters and empower consumers there to help flatten demand peaks. This strategy also would help Sweden respond to energy supply issues caused by shortages of water storage capacity currently used to offset wind intermittency. (In Sweden, more than half of all electricity comes from hydro generation. When it rains or snows less, costlier fossil fuel-burning generators must be ramped up to meet demand — posing operating cost risks for electric retailers.)

Consumer flexibility is one reason why Swedish electric retailers favor demand response. A new study by the School of Sustainable Development of Society and Technology at Malardalen University (Vasteras, Sweden) indicated that demand response is successful with Swedish consumers.

This study compared data from 100 Swedish households, divided by heating method: electric-direct heating, electric boiler, heat pump, combined systems, and non-electric. It also examined hourly data from distributor system operators. (In Sweden, the agency that reads the meter is separate from the company that produces and sells the power.) The research found that consumers with electric heating who also had access to hourly data did take action to substantially lower their electricity bills. The study also projected that more frequent data collection should reduce fossil fuel consumption.

Sweden’s Energy Market Inspectorate currently is preparing proposals on how to move toward hourly meter reading. New requirements, recommendations, and a timeline are expected by late 2010.

Clearly, hourly meter reading is going to happen in Sweden: regulators support it, retailers would benefit from reduced risk of price uncertainty, and consumers would save energy and money.

Therefore, Swedish electric retailers probably should start preparing now for hourly meter reading and demand response — especially regarding IT systems. In addition, dynamic pricing mechanisms such as time-of-use rates will play an important role in realizing the full scope of demand response benefits in Sweden.