© istockphoto / Gregor Bister

Making smart progress on the energy transition

Digitisation is helping to make our energy system fit for the future. The Federal Ministry for Economic Affairs and Energy wants to encourage this with new legislation.

Autumn is here. The onset of cooler temperatures makes it more obvious that electricity from sources like wind and the sun is dependent on the weather. When it is cloudy, there is no solar power generation, but this is made up for by the windy days delivering higher amounts of wind energy. This represents a massive challenge for the electricity grids: they need to reconcile the fluctuating supply of electricity from renewable energy with consumer demand. At the same time, they increasingly need to transport electricity in two directions, as more and more solar panels on house roofs and more and more wind turbines are feeding "distributed" power into the grid.

Smart metering systems are to help equip the energy system for the needs of the energy transition. In order to ensure that they are used in a secure and cost-effective manner, the Federal Ministry for Economic Affairs and Energy published a draft "Act to Digitise the Energy Transition" on 21 September and gave the Länder and associations the chance to comment on this draft.

Moving towards a digital energy system

Smart metering systems are to deliver secure and standardised communication in the energy grids of the future. They are better equipped to integrate power from renewable energy into the electricity market and help to reconcile supply and demand. They consist of a digital meter and a communications unit, the "smart meter gateway", which can link meters to the smart grid.

Consumers benefit from smart metering systems in a variety of ways. Firstly, digital meters make it possible to see precisely how much electricity is being used in the home, and thus help people to be more aware of how they are using energy and to conserve electricity. Secondly, consumers can conclude electricity supply contracts which fit better with their individual electricity consumption and are cheaper. Variable tariffs are also possible. These deliver economic incentives to consume electricity when it is cheap. Also, smart metering systems do away with the need for visits by meter readers, and thus save time and money.

Gradual installation with price ceilings from 2017

According to the draft, the installation of smart metering systems is to begin from 2017, step by step. The plan is to start with large-scale users with an annual electricity consumption exceeding 10,000 kilowatt-hours (kWh), and generators with an installed capacity of between 7 and 100 kilowatts (kW). By way of comparison: an average four-person household in Germany consumes 4,400 kWh a year.

The installation and operating costs are normally to be borne by the consumer or the operator of the generating plant - as is already the case with conventional electricity meters. The new aspect is the protection the consumers/operators will enjoy: there are individual price ceilings which must always be kept to when the equipment is installed. These have been calculated to reflect the potential individual and macroeconomic benefits. The Federal Ministry for Economic Affairs and Energy has determined what these are in a careful cost-benefit analysis. Smart meters should only be installed if the likely benefits outweigh the costs. In the case of consumers, for example, this will depend on the degree to which their electricity costs can probably be reduced.

In addition to the consumer groups described in the draft, the operators of the metering points which are responsible for installing and operating electricity meters can include further consumers if they feel that this makes sense. But once again, they have to observe extremely strict price ceilings.

By launching the scheme to install smart metering systems, the "Act to Digitise the Energy Transition" would kill several birds with one stone. This is because - unrelated to Germany’s energy transition - the European Commission has instructed all EU Member States to try to equip 80% of their households with smart meters. The Act meets this requirement.

Strict rules on data protection and security

No matter who is using the smart meter, its use significantly increases the volume of data transferred. Rather than the level of consumption being checked once a year, it is measured much more frequently - even every quarter of an hour. For this reason, the draft "Act to Digitise the Energy Transition" contains strict rules governing the protection and security of consumer data.

The draft stipulates that all smart meters in use in Germany should in future comply with the protection profiles and technical guidelines drawn up by the Federal Office for Information Security (BSI). BSI certification is required if a smart meter is to become a smart metering system. For example, the equipment must contain firewall mechanisms, and connections may only be established in the upstream direction, and not the other way round. Measures like these are intended to prevent hackers from accessing the system.
Who will get a smart metering system and when, and what are the data protection rules? You can find answers to FAQs here.