«Ref: C14-RMF-68-03 19 March 2015 Council of European Energy Regulators asbl Cours Saint-Michel 30a, Box F – 1040 Brussels, Belgium Arrondissement ...»
With the development of smart meters, a category of market participant that is likely to have more prominence will be third parties. By a “third party”, we mean a party that does not already have a contract with the customer or a party that does not already have authorisation by law, for example, for carrying out regulatory duties in relation to the customer. So third parties might be potential suppliers (not the customer’s current one), aggregators or energy service companies (ESCOs).
CEER’s final advice on the future role of DSO is planned for 2015.
ESCOs are parties which offer customers alternative routes to engaging with energy markets and can empower customers to make better choices, and include e.g. switching websites, energy brokers and energy efficiency advice providers. This can result in customers saving money. In order to offer such services, ESCOs need access to data. In most European countries, ESCOs (where they exist) must have a bilateral contract with the DSO/metering operator in order to get access to information on customer meter data. For aggregators, who can help consumers participate in demand side response, the situation is much the same.
Depending on the national data models, NRAs might be involved in data management as well as standardisation and its implementation. There might also be other bodies that operate and monitor data management.
Depending on MSs’ data management models, there can be stakeholders others than those already mentioned involved in a data management model, such as the national data hub.
This data hub might be owned/operated by one, or a combination, of the stakeholders above and facilitates the storage and exchange of customer meter data. The hub might also be operated by an independent company such as the transmission system operator (TSO), an information and communication technology (ICT) operator or other17.
Furthermore, the TSOs or parties responsible for balancing might be a stakeholder as well.
These parties are not explicitly highlighted in this document since the scope here is focused on residential customers and small businesses, and a balance responsible party is not directly relevant from the customer’s point of view. The figure below presents the interrelations between the stakeholders above.
By way of example, in Denmark and Norway the data hub is operated by the TSO; in Great Britain it is an ICT company; and in Italy it is another type of stakeholder (Acquirente Unico, Italy’s single buyer for electricity).
“NRA” is without arrows since its relation to data management differs between countries.
This section briefly presents the different functionalities of traditional meters, smart meters and the opportunities and risks related to data management.
Traditional (not smart) electricity and gas meters have very limited functionalities. They are designed to measure the total amount of energy used by a customer and are typically calibrated in billing units – kilowatt hours in the case of electricity meters and cubic meters/hundreds of cubic feet in the case of gas meters.
Periodic meter readings are required to establish the billing cycles and energy used during a cycle. Given that actual readings can only be taken manually for traditional meters – directly at the meter – estimates are widely used for billing purposes with actual readings used to reconcile bills within a certain period. One specific type of meter is a prepayment meter.
Prepayment meters function like a “pay as you go” mobile phone, whereby you pay for your usage upfront and have to top-up with credit. Given their limited functionality, the data management issues associated with traditional meters are also limited.
There are a number of features that identify a smart meter.
A joint contribution from DG ENER and DG INFSO (now DG CONNECT)19 towards the EU's Digital Agenda in October 20117 outlined the key features of smart meters as:
providing readings from the meter to the customer and to equipment that they may have installed;
updating those readings frequently enough to allow the customer meter data to be used to achieve energy savings/cost savings;
allowing remote reading of meter registers by the meter operator;
providing two-way communication between the meter and external networks for maintenance and control of the meter;
allowing readings to be taken frequently enough to allow the customer meter data to be used for network planning;
supporting advanced tariff systems;
allowing remote ON/OFF control of the supply and/or flow or power limitation;
providing Secure Data Communications;
fraud prevention and detection; and providing Import/Export & Reactive Metering.
The increased functionalities of smart meters greatly increase customer data management issues, including: the impact on privacy of greater accessibility to customer meter data (i.e.
who controls the data) and who can access it; the cost of accessing customer meter data;
the usability of available customer meter data (i.e. the level of complexity involved); and the ability of customers to engage with it. At the same time, the deployment of smart meters and, consequently, the increasing opportunity of meter readings should not lead to data overuse A joint contribution of DG ENER and DG INFSO towards the Digital Agenda, Action 73: Set of common functional requirements of the SMART METER, October 2011
and undue costs. This assessment should take into account the purposes of data management (for example, data used to save energy or for billing) and the feasibility of new approaches from a technical point of view.
3.3 Opportunities and risks of data management arrangements There are a range of aspects of metering arrangements that are affected by data management. We have identified nine key areas, a number of which are interrelated. The opportunities and risks posed by data management include how those may change with the introduction of smart meters and/or smart grids. We consider these for each of the identified nine areas.
3.3.1 Customer experience
The customer is the key stakeholder in relation to customer data management. The way in which customer meter data is managed can have a significant impact on what customers consume and produce, what customers pay and the level of service they receive. More generally, it can also impact on their trust in the metering arrangements and their desire to have a smart meter.
Efficient provision of customer meter data provides scope for fast, reliable and cost-effective supplier switching. If this process provides a positive customer experience, then more customers would engage in this process; which in turn would facilitate greater competition.
At the same time, the greater availability of customer meter data can have a negative impact on the customer’s experience if the arrangements become too complex and therefore difficult for the average customer to engage with. Ultimately, customers could make the wrong decisions, thereby undermining their confidence.
Smart meters provide better (more accurate and sophisticated) customer data, facilitating billing arrangements and supplier switching. However, for the same reason the risk of complexity is greater with smart meters.
Consumers’ concerns over data privacy have increased with the arrival of smart meters. The relevant bodies need to put in place the appropriate measures to increase customer trust in the arrangements for data management so that customers freely consider the benefits associated with smart meters.
3.3.2 Vulnerable customers
Vulnerable customers are a specific subset of customers. Most MSs have specific arrangements in place aimed at protecting the interests of vulnerable customers. These measures are most often concerned with debt and disconnection. How customer meter data is managed is important for the identification and protection of vulnerable customers. For example, accuracy of customer meter data is important, particularly when attempting to contact a customer regarding a debt20. Data may enable customers, and this includes vulnerable customers, to take actions to reduce their energy bills and generally to use The THINK report on active demand management recognised the importance of ensuring additional assistance for vulnerable customers in relation to data protection.
energy more efficiently. However, vulnerable customers are less likely to engage with and/or are less able to take advantage of the benefits arising from the available customer meter data.
The challenges for adequately and effectively engaging vulnerable customers exist with or without smart meters. Smart meters can benefit vulnerable consumers, for example by providing better information on energy consumption that helps them to budget better. But smart metering also presents new risks for vulnerable consumers; for example, smart meters may create the potential for remote disconnections which is a new form of risk for vulnerable customers without adequate consumer protection rules.
3.3.3 Customer empowerment
A key objective of the roll-out of smart meters is to enhance the position of customers in making their decisions. The Mission and Work Programme of the Smart Grids Task Force 21 states that: “Consumer empowerment includes capabilities of supplier’s customers to have sufficient and timely information on their actual energy consumption/production, to learn and act upon their energy savings through energy usage optimisation and more energy efficient technologies, to have access to competitive offers for energy services to develop energy efficient consumption practices and to allow them to become energy providers”. But of course, this is not the only tool which contributes to customer empowerment; equally important are transparency and standardised data management for examples.
The form of customer data management is therefore central to customer empowerment. The greater the level of transparency over customer meter data, the more empowered customers will be to better manage their energy needs. This includes making a decision to adjust consumption and injection (by prosumers) or to switch supplier. It may also mean making a decision to share customer meter data with third parties.
The introduction of smart meters will make more customer meter data available in a timely manner, providing customers with better control over their energy consumption and the ability to adjust their behaviour so as to reduce their energy bills. Therefore, smart meters increase the potential opportunities for customer empowerment. The main risk is that customers remain apathetic about the opportunities available to manage their consumption and benefits from injection. They may be unwilling to take any additional actions, including an unwillingness to share their data with other parties, which would reduce any benefits of having customer meter data. It is recognised that it is the customer’s right to determine how other parties use their customer meter data, including who they share it with.
Customer apathy is a risk with or without smart meters. The key point is that the customer will miss out on the greater opportunities presented by smart meters. One factor that may help address this is the possibilities that smart meters enable for automation; i.e. some actions could be taken automatically to help manage energy and therefore to empower and protect the interests of customers.
The Smart Grids Task Force (SGTF) was set up by the European Commission (EC) at the end of 2009 and is made up of stakeholder representatives from industry, regulators, consumer groups and the European Commission (EC). The mission of the Task Force is to advise the Commission on policy and regulatory directions at European level and to coordinate the first steps towards the implementation of Smart Grids under the provision of the 3rd Energy Package.
One key issue is the cost of accessing customer meter data. Cost is an issue for third parties who may be able to use customer meter data to generate benefits for customers. In this regard, the Energy Efficiency Directive (Article 11) states that “Member States shall ensure that final customers receive all their bills and billing information for energy consumption free of charge and that final customers also have access to their consumption data in an appropriate way and free of charge”.
However, in the case of multi-apartment and multi-purpose buildings with a central heating/cooling source or supply from a district heating “the distribution of costs of billing information for the individual consumption of heating and cooling in multi-apartment and multi-purpose buildings pursuant to Article 9(3) shall be carried out on a non-profit basis.
Costs resulting from the assignment of this task to a third party, such as a service provider or the local energy supplier, covering the measuring, allocation and accounting for actual individual consumption in such buildings may be passed onto the final customers to the extent that such costs are reasonable.” Other parties, including third parties, may also be authorised by the consumer to access data and provide them with additional value-added services. We consider it a posibility that these parties might have to pay for the costs of accessing and gathering this data. However, unreasonable costs associated with accessing and securing customer meter data can act as a barrier to the use and sharing of data by customers. This may discourage parties, such as third parties, who could use that data to provide additional services and benefits. Therefore, it is important that any costs for third parties are reasonable.