Dynamics in measurement services: How can the actors reposition themselves?


Raising efficiency in measuring services is of increasing importance. A variety of new products and enhanced services, the growing complexity of market and contract conditions, and the opening of the German market for measuring (German EnWG and MessZV) have created a dynamic development in the market. Measuring service providers have now been lawfully declared as independent market actors. Moreover, the demand for electronic meters (smart meters) and automated meter reading comes to the fore and in consequence conventional measuring is put to the test. Energy providers, manufacturers and service providers are encouraged to evaluate their (billing) processes and the use of technology in measurement services and to adjust them to current developments.

Following the creation of a legal framework with the amendment of §21b of the Energy Act (EnWG, Energiewirtschaftsgesetz) and the measuring entry ordinance (MessZV, Messzugangsverordnung) by the end of 2008, the market for measurement services has accelerated. The conditions for measurement services – linked with the operation of measuring points – will change. The main factors are the increasing use of smart metering and the associated shorter periods of billing. Furthermore, distribution companies that combine energy supply, measuring services and operation of measuring points are entering the market.

Now, the way into the measuring business of the local energy suppliers is paved for third party suppliers. The number of sub-metering service providers in the DVGW list of entrants in the German gas market had doubled in April 2009 compared to the previous year with nearly 42 companies, for example. Competitive pressure is increasing, as was recently demonstrated by the provider of "yellow energy" in the German market. In addition to the revised framework conditions in the EnWG and IEKP, the related regulations, such as the network tariff and network use regulation, also affect the market and force the energy supply companies to rethink their strategies.

Based on these developments, the German study “Der Markt für Messdienstleistungen (Strom, Gas)” [Market for measuring services (electricity, gas)] examines the market for measuring services in Germany and the factors influencing the electricity and gas markets. The study describes trends, opportunities and risks for metering service providers and operators, energy suppliers, manufacturers and customers. Beyond that, the multi-client study supports current and potential market participants with options of business strategies within the market.

Based on extensive desk research and 75 structured interviews with market players, the field of measurement services in the electricity and gas market is thoroughly analyzed to provide a secure basis for decisions on strategic and operational positioning in this competitive market.

The content ties in with results of the studies "The market for measuring points and measuring services: counting and measuring in Germany from 2008" and "Smart metering (2nd edition) – Germany prior to the rollout?"

Strategies in the market for measurement services

A large proportion of the surveyed energy suppliers and network operators indicate that currently no measuring service provider has taken over measuring and counting in their area. However, in almost all cases service providers submitted applications for the takeover lately.

Within the survey the energy suppliers were asked to assess the relevance of various strategies on the market for measurement services. From the perspective of the energy suppliers a market appearance towards end customers is relevant or very relevant for more than 60 percent (Figure 1).

Energy suppliers

Figure 1: Evaluation of possible strategies in the market for measurement services by energy suppliers (Source: trend:research)

The strategies "Integration of measuring points and measuring services" and "Offering measurement services for the implementation of smart metering" are also designated by a majority of respondents as relevant or very relevant. This assessment confirms that the issues of implementation of smart metering and interfacing of measuring and operation of measuring points are seriously taken into consideration in the German energy industry.

Development towards the coupling process of counting and measuring

According to respondents, a direct commissioning of a metering service provider is especially interesting for customers in the industry (65 percent of answers) and large commercial customers (just under 60 percent of answers). For area and object operators this value is at 55 percent. Only 20 percent of the respondents believe that households have an increased interest in this offering. This is explained by the fact that these customers can achieve only small savings by changing the measuring service provider.

Due to the existing process know-how in billing of measuring service, a direct addressing of potential users is easy to realize. Important criteria for a bid to potential customers are cost effectiveness and access to end customers.

An external offer of measuring services to customers can usefully be coupled with measuring and operation of the measuring point. In the case of electronic read-out these processes have to be linked with each other anyway under the MessZV regulation, which means that the role of measurement services coincides with the measuring operator.

Some interview partners also stated that these processes are linked to each other anyway and that this is common practice in this sector – a separation would lead to the loss of expertise. According to trend:research this assessment applies particularly to electronic measuring. This assumption can be justified by the combination of the performance check of these systems with a read-out of the meter readings. Once smart metering is used extensively or nationwide, the operation of measuring points and measuring services cannot be separated in the sector of private customers anymore.