Landis+Gyr executive warns European rules fail to support AMI
December 02, 2013
Industry not structured to promote investment in full rollouts
A prime reason many European countries will not meet an EU mandate that 80% of customers be given smart meters by 2020 is regulatory uncertainty, Jon Stretch, Landis+Gyr's executive VP for Europe, the Middle East & Africa (EMEA), told us recently. Much of the European market is "broken up between distributors and generators and retailers, so with smart metering and smart grid, a lot of the investment sits in the distributor and a lot of the benefit sits in the retailer and the generator," he explained.
This regulatory structure means that the business case for AMI for much of Europe is "not a customer-centric approach. The distributors are responsible for the rollout of smart metering but are divorced from the customer relationship concerns that a supplier or retailer has," Stretch added.
One exception is the UK – the "only real example" in Europe "where the retailer or the supplier owns the meter," Stretch said. The smart metering business in the UK centers on the question, "'How do I retain and/or acquire customers by being able to offer multiple services to them?'
"In order to do that, they need smart meters. It's a real customer-centric view," he argued.
The German government's decision not to pursue the EU's 2020 metering target could strengthen Landis & Gyr's market position there, Peter Heuell, head of the firm's German operations, told us recently (SGT, Aug-16).
The markets for renewables integration, smart grid technologies and DR across Europe lack the "consistency of thought in business models and therefore regulation" needed to spur investment, Stretch said. In Europe, "what you will see in smart grid is a lot of trial and exploration that won't be backed by the level of true investment in scalable products and solutions until there's more uniformity around business models and regulation," he added.
AMI rollouts without regulatory consistency can only do so much to boost the market for DR and other smart grid features, Stretch said.
"The metering rollout will give visibility to energy consumption patterns within the customer premise but to have something like demand response in place, you really need to understand the role that each of the actors plays in the market and regulation to support that," he added.
European utilities can write individual contracts for C&I customers in their high- and medium-voltage networks but doing so at a much larger scale, with hundreds of thousands of customers, is another matter, Stretch said, citing the absence of regulations to support large-scale, residential AMI rollouts.
© 2013 Modern Markets Intelligence, Inc. IMPORTANT: This article was reproduced from the November 13, 2013 issue of Smart Grid Today with the limited permission of the owner. To view the full story on Smart Grid Today’s website, please visit http://www.smartgridtoday.com/articles/10114-landis-gyr-executive-warns-european-rules-fail-to-support-ami.