SMART meters should result in more effective use of electricity and lower bills, but not many people are aware of these benefits. Moreover, the whole technology may become useless if the state regulator does not change its approach to setting the prices, analyst warns.
Smart or intelligent meters are electronic devices that record the consumption of electric energy in certain time intervals and communicate that information to consumers and the distributor. This data can be used for monitoring and billing purposes. Operators of distribution networks have already started the process of exchanging the old meters for new ones, with the plan to finish the replacement of relevant devices by 2020.
“By the end of 2015, more than 30,000 devices were installed at customers connected to distribution network,” Norbert Deák, spokesperson for Slovak Electricity Transmission System (SEPS), told The Slovak Spectator.
Though they are an interesting innovation, which will be important especially in relation to growing decentralisation of electricity production, there is one obstacle for its installation in households and small and medium-sized companies: the regulation of electricity prices, according to Martin Vlachynský, analyst with the Institute of Economic and Social Studies (INESS) think tank.
The installation of intelligent meters is part of a regulation, introduced in 2013 as part of the government energy plan. It obliges electricity distribution network operators to install smart meters on any household with an annual electricity consumption of 4 MWh or more and companies. By adopting the regulation, Slovakia fulfils its commitments within EU legislation that it has transposed. The plan is to achieve 80-percent market penetration of smart meters by 2020.
According to Economy Ministry’s estimates, this currently concerns some 400,000 distribution points where smart meters will be installed by 2020. The installation schedule was divided into three phases.
The first one, which ended on December 31, 2015, concerned the first-category customers with annual electricity consumption amounting to at least 15 MWh and maximal reserved capacity of more than 30 kW, such as small and medium-sized enterprises, restaurants and schools.
The second phase concerns customers with annual consumption of at least 4 MWh and maximal reserved capacity of more than 30 kW, including small and medium-sized enterprises, restaurants, schools, plus electricity producers and owners of charging stations for electric cars. This phase should end on December 31, 2016.
The last, third phase will concern the customers with annual consumption of 4 MWh and more and maximal reserved capacity of less than 30 kW, like bigger family houses and shared residential premises. This phase should be completed by December 31, 2020.
Západoslovenská Distribučná (ZSD) company says it changes the smart meters according to the schedule. It will install some 22,000 meters during the years 2015 and 2016, said the company’s head Andrej Juris. The plan is to install more than 190,000 meters by 2020.
Also Stredoslovenská Energetika – Distribúcia (SSE-D) says it follows the plan, as it installed nearly 7,000 smart meters last year. By 2020 it plans to install them at about 110,000 delivery points, said company’s spokesperson Jana Bolibruchová.
The Východoslovenská Distribučná (VSDS) has already installed 10,500 meters last year, and another 26,500 during this year. By 2020 they plan to install together 100,000 smart meters, according to Andrea Danihelová, VSDS spokesperson.
Except for the three big regional distributors, there are also several small distribution firms, but it is not clear how many of the devices have been installed by them, Deák said.
Some problems pending
Though the current tempo of installing smart metres is good, it is impeded by low awareness of customers. There is no clear list of benefits the devices bring to customers or other related subjects.
Moreover, also nation-wide awareness is missing, according to Deák.
“Only distribution companies communicate with the customers, by providing them information shortly before the installation of smart meters,” Deák said.
Also information in media is rather infrequent, he added.
Juris also admits that when installing smart meters, it sometimes happens that customers need more detailed information about the devices, as well as consulting.
Moreover, the problem is that the installation of smart meters will not affect average families for now as their annual consumption is about 2.2 MWh. Bolibruchová admits that for households with lower electricity consumption the final savings are very low, especially compared with the costs for operating the smart meters.
Meters to help save costs
Since it is a new technology, it is necessary to identify the possibilities it brings to customers, as well as barriers to its further development, Deák said.
Energy distributors agree that the smart meters will allow better monitoring of produced and consumed electricity, as well as collection of information for operating the distribution network. They may also help reveal illegal electricity consumption, Juris said.
Moreover, based on collected information customers can use the electricity more effectively and reduce costs, according to Bolibruchová.
“The potential drop in consumption depends on each customer,” she said, adding that they have to decide on their own how and when they will use electricity and whether they will invest into technologies that should secure effective use of smart meters.
Juris adds that based on data from smart meters, electricity traders may prepare special packages for customers that will help them monitor their electricity consumption.
As for obstacles, Slovakia lacks dynamic tariffs and a more liberal framework for electricity distributors to respond to the potential smart meters have, Deák says.
Moreover, the current regulation system does not allow suppliers to create innovative packages of services with, for example, floating tariffs, Vlachynský adds.
“The point of smart meters is in using the price fluctuations during the day,” Vlachynský told The Slovak Spectator, “without this they are only for decoration.”