A recent decision of the Constitutional Court to end the compensation scheme for solar panel owners turned the public opinion against digital meters. This is a setback for the Belgian energy transition, says Bernard Oosterlynck, business consultant utilities at Trilations: “The digital meter is an important enabler of the energy transition”.

Recent headlines [1] look alarming: 1 in 3 Flemish households refuse to have a smart metering system installed. That is problematic, and not just because the Flemish government aims for an 80% penetration rate of digital meters by the end of 2024 [2]“The issue,” stresses Bernard Oosterlynck, business consultant utilities at Trilations, “is that digital meters are an important tool to realize the energy transition. The share of renewable energy is growing and while that is good news for the climate, the intermittent character of solar and wind power poses a challenge to grid stability. Smart grid management solutions aimed at keeping the grid stable, like peak shaving, load shifting or demand response mechanisms,  all require digital meters.”

On top of that, these digital meters don’t only benefit grid operators, Oosterlynck explains, “Every player in the energy field benefits!”

HOW DOES THE MAGIC WORK?

Since July 2019, Fluvius has installed about half a million [3] digital electricity and gas meters (of a projected 4.3 million by the end of 2024 and a complete roll-out by the end of 2029). They were placed in newly built or thoroughly renovated buildings or in households selected for the conversion program [4]. The digital meter has an electronic display from which end users can read measurement information, and two communication ports, P1 and S1 [5]. “End users need to activate these communication ports via the Fluvius website,” says Bernard Oosterlynck.

Interpreted data pass through the P1 port. They allow the distribution grid operator (DGO) to remotely read out metering info and use it in the market process, while they offer end consumers valuable insights in their electricity consumption (and production, for consumers with local green generation), especially in combination with one of the energy apps or tools on maakjemeterslim. Raw or uninterpreted data (about voltage and current) pass through the S1 port. They allow household energy management systems to detect which electric appliances are running.

These ‘smart’ systems can also identify the ideal running time – in terms of grid balance and price incentives – of household appliances and may program them accordingly.

DYNAMIC PRICING IS KEY

So how do different players in the energy field benefit from the installation of digital meters? Bernard Oosterlynck: “The benefits for DGO’s are obvious. They can remotely activate and deactivate digital meters and the budget meter functionality, and collect a massive amount of real time information, which serves as input for pro-active grid management. This includes a better fraud detection and a better handling of outages and grid capacity problems.” On January 1st 2022 (which can be delayed until July 1st 2022), a distribution grid capacity tariff will be put in place for all net users, largely based on their peak consumption (80%), rather than their total consumption (20%). “The tariff will raise consciousness among consumers – especially those with local generation – about grid capacity and the need for self-consumption,” explains Oosterlynck. “The possibility to charge distribution costs based on actual offtake volumes instead of net offtake volumes, will decrease investment costs for the distribution grid operator.”

But what about the benefits for consumers?

Digital meters offer valuable insights in household energy usage. Consumers will be able to choose for receiving final bills on a monthly basis, which will make consumers more aware of their periodic energy use.  With dynamic pricing in place, Digital meters can help consumers save even more energy and money.

To conclude, energy suppliers will be able to draw up electricity contracts with dynamic prices to reflect the price at either the intraday or the day ahead market, where prices can vary by the hour. On average, smart meters can provide savings of €230 for gas and €270 for electricity per metering point for consumers, suppliers and DGO’s combined [6].

TIME TO RAMP UP THE ROLL-OUT

By the end of 2020, Flanders was still striving for a 10% penetration rate of digital meters [7]. The roll-out in Brussels and Wallonia is going slower. Due to the pandemic, Belgium is running behind schedule to achieve its goal of 80% digital meter penetration by the end of 2024.

Leading examples in Europe6 are Sweden, Italy, Finland, and Spain. They all completed the digital meter roll-out by 2018 latest. Countries like Austria, The Netherlands and France aimed for a large-scale roll-out (80% or higher coverage) by the end of 2020. “In comparison, the Belgian goal may seem unambitious,” Bernard Oosterlynck says. “However, Poland and Germany have set deadlines as far in the future as 2028 and 2032. Germany is struggling with the vast amount of meters to replace (50 million or 20% of the European total) and the high number of grid operators (880) in its liberalized power market.”

Currently, Belgium camps somewhere in the middle of the European ranking.

We need to ramp up, as the installation of digital meters is an important step in the transition towards a sustainable energy system. Distribution grid capacity tariffs and electricity contracts with dynamic prices for residential customers – both of which are underway – will make the benefits of the digital meter more apparent.

With dynamic pricing in place, end users will notice that tools and services to manage their energy consumption (made possible by the digital meter) have a positive impact on their energy bill. Turning the digital meter into a positive story for everybody seems to be a challenging but critical step on the road to a more sustainable energy system.

SOURCES

[1]  De Standaard, ‘Een op drie weigert digitale meter’ door Wim Winckelmans, 11/3/2021

[2]  Vlaanderen, De digitale energiemeter

[3]  World Energy, Fluvius Initiates 4.3 Million Smart Meter Rollout in Belgium

[4]  Selected households are either prosumers (solar panel owners) or budget meter owners. Installation in Flanders is mandatory, though prosumers recently obtained the right to refuse a digital meter until the end of 2025. Households that are not currently selected for the conversion program can already request a digital meter, but will have to pay for the installation themselves. For all others, the costs will be settled through the distribution network tariffs.

[5]  De Tijd, Digitale meter alleen geen garantie om te besparen op uw energiefactuur

[6]  Publications Office of the EU, Benchmarking smart metering deployment in the EU-28

[7]  As a reference, global penetration rate by the end of 2019 was 14%.

This article is written by our Energy & Utilities expert Bernard Oosterlynck

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