Conference: Metering, Billing/CIS America
Location: San Diego, CA, USA
Presenter: Jessica Strí¶mbí¤ck
Abstract: Presented by Jessica Strí¶mbí¤ck at Metering, Billing/CIS America

Structural Market Changes within the EU
The European Electricity market is currently facing challenges and changes in regulation, which are in the process of permanently transforming the basic structure of the market.  The sector is now liberalized across the Union, Smart Metering has been mandated by the European Commission, Demand Response programs are being developed due to concerns over security of supply and resource issues as well as the 3×20 European Commission objectives.  This combination is gradually changing the entire sector, from energy resource management to consumer consumption habits. 

There are areas in which Americans can learn from the European experience, liberalization patterns and esthetic energy saving solutions for example, but in certain areas, such as Smart Metering and Demand Response, American companies may be as much a ten years ahead of their European counterparts. The combination of structural changes on the one side and superior experience plus developed products on the other, offers real opportunities to American companies. 

However, in order to take advantage of a market one must neither underestimate the current players nor miss opportunities due to a lack of knowledge.  This presentation attempts to give an overview of the successes and challenges facing the European Smart Metering and Demand Response sector, as well as the motivations behind the current market developments.

Developmental trends
Italy and Sweden’s  Smart Metering rollouts are close to completion.  It is estimated by VaasaETT that by 2020 at least 8 of the EU 15 countries will have 80% or more Smart Meters installed in households, though this number may be even higher.  Smart Metering without the Demand Response component however, will not achieve the much needed energy reductions, CO2 reductions or peak load reductions.

It is expected that commercialization of Demand Response in Europe will require an initial jump start, in the form of extensive, (though targeted as opposed to comprehensive) mandated infrastructure such as Smart Metering and in-house information. Although the new EU Commission directives aim to change this, estimated billing practices are currently a barrier to European Demand Response programs.  Changes must also be made in the regulatory framework of many countries so that utilities are not financially penalized for their Demand Response initiatives.

Europe’s Demand Response research emphasis often focuses on active Demand Response programs, which educate the customer in order to improve and inform consumption habits. 20-50% peak clipping and a 10-15% percent reduction in overall electricity consumption have now been recorded repeatedly in a wide variety of case studies and pilot programs.  The average energy consumption of the European household is often too low to justify highly automated, expensive Demand Response solutions, though these remain a possibility for commercial and industrial applications.