This month the Council of European Energy Regulators published its “Advice” on how smart meters can enable demand response throughout Europe.

CEER concluded that to guarantee active participation by customers, smart meters are needed. This means making metering data available more frequently, and fostering customers’ deep awareness of both consumption and injection behaviors (e.g. wind and solar energy produced by energy consumers). These are not possible with electromechanical meters…

This Advice document is a set of recommendations based on industry input to a public consultation CEER held last year. CEER is the voice of Europe’s national energy regulators, at the EU and international level. Through CEER, national regulators cooperate and exchange best practices. This agency “seeks to facilitate the creation of a single, competitive, efficient and sustainable EU internal energy market.”

Like many other organizations, including the Smart Energy Demand Coalition, CEER believes that two forces that drive development of the smart grid are:

• Active participation by customers in electricity markets.Customers must be able to react and adjust their consumption, or be able to inject electricity in response to signals.
• Time-based electricity pricing options. These are a vital signal for demand response by customers.

CEER made four recommendations to promote demand response by customers — all very consistent with some other countries and U.S. states which exemplify best practices, such as California and Texas:

1. Customer trust. Electricity retailers and other energy service providers should give customers transparent information about offers. The goal is to create customer awareness of how changes in lifestyle or occupancy influence household consumption patterns, and consequently their electricity bill. As As Siemens AG business unit eMeter’s Chief Regulatory Officer Chris King recently told Bloomberg News: “It’s impossible to get transparency without smart meters.”
2. Privacy and security. When installing smart meters, privacy and security must be guaranteed. Canada provides one possible example.
3. Offers that reflect real consumption patterns. The industry should provide time-based options, price comparison websites, on-demand access to consumption data (such as that from the U.S. Green Button), cost information and at least two channels for data access.
4. Interface with devices in the home. In order to realize the full potential of the Home Area Network interface, specific roles for energy retailers, data providers and other stakeholders must be defined. CEER also noted other prerequisites, including safe, secure, and open standards; a duty to deliver timely and accurate data; the capacity to quickly analyze large volumes of data and the ability to aggregate consumption from different customers for demand response.

CEER says its Advice can be used as a checklist to use smart meters to spur demand response. The recommendations involve these market stakeholders:

• Customers
• Micro-generators, such as customer-premise wind and solar producers
• Metering operators
• Distribution system operators (DSOs)
• Electricity retailers/suppliers
• Energy service companies (ESCOs)
• National regulatory authorities (NRAs)

A few of Europe’s electricity markets are designed differently from the U.S. in terms of the roles for DSOs and metering operators, so CEER discussed these separately in its Advice. CEER describes the roles for these two actors — but in practice, in most countries these two roles are handled by a single entity (the DSO).

Incidentally, separating the meter operator from the DSO creates numerous problems, most importantly the loss of economies of scale. New Zealand is the only state or nation which has separated these two functions and also had a significant smart meter rollout. In contrast, two smart meter success stories (Texas and the Australian state of Victoria) reversed their original policies separating the two roles. More on this in a future post…