FAQs about the Metering Point Operation Act and smart meters

Smart meters are to deliver secure and standardised communication in the energy grids of the future. An energy supply system which primarily delivers electricity generated from weather-affected renewable sources needs to be able to respond flexibly. To do this, it needs information about the generation and consumption situation. An energy supply which is even more market-based needs to be able to transport market signals to consumers and generators. Both tasks can be tackled by smart energy networks which use smart meters as communication units.

A smart meter consists of a digital meter and a communications unit, the “smart meter gateway”. The smart meter gateway - furnished with the mark of the Federal Office for Information Security (BSI) - permits meters to be connected to the smart grid in a way that meets data protection and data security standards.

Smart meters form the secure and standardised technical basis for a large number of applications in the fields of grid operation, electricity market, energy efficiency and the smart home. These are in particular:

• Transparent consumption
• No need to visit consumers to read their electricity meters
• Possibility of variable tariffs
• Provision of information from distributed generators and flexible demand which helps the grid
• Steering of distributed generators and flexible demand
• Combining of different forms of energy, i.e. simultaneous metering and transparency also for gas, heating and district heat
• Secure, standardised infrastructure for “smart home” applications

Fluctuating electricity generation from renewable energy sources requires a communication network which links generation, consumption and the grid. This is because, in order to integrate the renewables, the grid always needs to keep enough capacity on hand to offset the fluctuations. This is only possible if generating installations and flexible demand can use secure, standardised communication routes.

Consumers benefit in many ways. Firstly, they gain a precise picture of their consumption patterns. This motivates them to behave in a way that saves energy. Secondly, consumers can conclude electricity supply contracts which fit better with their individual electricity consumption patterns and, simply because of this, are cheaper. Tariffs with market-based incentives to shift consumption are also possible (variable tariffs). Finally, smart metering systems do away with the need for visits by meter readers, and thus save time and money.

The third internal market directives on electricity and gas (2009/72/EU and 2009/73/EU) give the Member States until 2020 to furnish 80% of consumers with smart meters. A different approach is also permitted (and has been chosen by Germany) on the basis of a cost-benefit analysis.

Most Member States (especially the UK, France, Spain, Italy, Sweden, Austria) take a positive view of the Commission’s 80% approach. They are therefore opting for the “full roll-out” – the comprehensive, nation-wide installation of smart meters. A few Member States like Belgium and the Czech Republic arrive in their analyses at a negative assessment of the introduction of smart meters. The requirements imposed on the comprehensive roll-out of smart meters vary from country to country. Germany’s technical approach, for example, is paying particular attention to the needs of the energy transition.

The cost-benefit analysis by Ernst&Young from 2013, and its update from December 2014 with variant calculations of roll-out strategies under consideration. (PDF: 45 KB, in German)

Alongside the draft, the “Metering Point Operation Act” is the main new act for rules relating to the installation and operation of smart meters. It sets out general requirements for the operation of metering points and lays down a high technical standard. It also contains rules on the installation and financing of smart meters and the data protection rules relating to the data which are harvested.

The various uses of smart meters can result in increased data traffic which provides insights into the consumption patterns of private households, and is thus sensitive in terms of data privacy. And, just like with any other form of digital communication infrastructure, there is a risk of hacker attacks.

In order to ensure a uniform, very high security level, the draft requires the compulsory use of protection profiles and technical guidelines to ensure data protection, data security and interoperability. These were drafted on behalf of the Federal Ministry for Economic Affairs and Energy by the Federal Office for Information Security (BSI) along with industry representatives, and with the close involvement of the Federal Commissioner for Data Protection and Freedom of Information, the Federal Network Agency and the PTB (National Metrology Institute). The documents, which are several hundred pages long, can be found on the BSI’s website. Only those systems meeting the highest level of data protection and data security will receive the BSI’s seal of approval.

Part 3 of the draft Metering Point Operation Act regulates exhaustively which party may receive what data for what purpose, and when the data received are to be deleted. Data transmission is only permitted for the applications required for the energy industry operations. Any additional data traffic always requires the consumer’s consent.

No. According to the draft Metering Point Operation Act, consumers with an annual consumption of up to 10,000 kilowatt-hours will retain their data “at home” purely for the purpose of illustrating their consumption. The default setting in these cases is an annual transmission of data. Only if the consumer opts for a tariff which requires more detailed metering and data transmission will further data be sent to grid operators and suppliers. The average 4-person household in Germany uses some 3,500 kilowatt-hours of electricity per year.

All consumers will be issued by their systems operator with a data sheet detailing what data traffic is necessary and why. Consumers can access their consumption data at all times.

It is likely that advances in technology will keep creating new threat scenarios. The smart meters need to keep pace with this so that they can continue to deliver the high standard of data protection and data security. The BSI will therefore constantly collect and evaluate information from manufacturers and users on any security loopholes, and respond by updating the technical documents.

Consumers with an annual electricity consumption exceeding 6,000 kilowatt-hours, and distributed generating installations pursuant to the Renewable Energy Sources Act and the Combined Heat and Power Act with installed capacity exceeding 7 kW – but always in compliance with price caps. Metering point operators can include other consumers if they believe this makes sense, but they must always observe extremely strict price caps.

The average annual electricity consumption of the three preceding calendar years at the respective connection point.

As is the case with the traditional electricity meters, consumers have to accept the installation of smart meters.

From 2017, a start will be made with the installation of smart meters for consumers which consume more than 10,000 kilowatt-hours (kWh) a year, and generators with installed capacity between 7 and 100 kilowatts (kW). Other consumers and producers will be required to install smart meters from 2020 at the earliest, so they can benefit from the lessons learnt by those groups that are already using smart meters.

Modern metering devices will become the compulsory basic equipment. These will be digital electricity meters with a better depiction of consumption, and which can be integrated into a smart metering system when necessary. They will also be subject to price caps. In this way, the electro-mechanical “Ferraris meters” are to be gradually replaced by modern technology.

No, smart metering systems can always be fitted on a voluntary basis. In such cases, the price of the installation and operation must be negotiated with the metering point operator.

The Act permits a priority roll-out to certain distributed generating installations, for example, so that the full market-based potential of smart meters to serve the system can be utilised at all times.

As is already the case with electricity meters, the costs are normally to be borne by the consumer or the operator of the generating plant. The new aspect is the protection the consumers/operators will enjoy: there are individual price caps which must always be kept to when the equipment is installed and operated:

At present, the costs of metering point operation and metering via electronic meters are approx. €20 p.a. for consumers. This is also the upper price limit for “modern metering devices”. For small-scale consumers, the charge for metering point operation is currently approx. €30 p.a.

These price caps are based upon the individual and macroeconomic potential benefits calculated in the cost-benefit analysis. On the consumer side, only the potential savings resulting from the increased transparency of consumption have been taken into account.

Funding via the grid charges would make it more difficult to prescribe individual price caps and reduce the resulting cost transparency. Also, funding via the grid charges would only be available for the grid operators, and would therefore impede market access for third-party metering point operators.

In this case, the grid operator can invite tenders and transfer its responsibility for smart meters and modern metering devices to another company. The Metering Point Operation Act sets out special provisions for this.

This is the party which is responsible for the installation and operation of smart meters and modern metering devices unless the consumer or plant operator has opted for a different company to serve as the metering point operator.

Normally responsible metering point operators have to pass a two-fold certification procedure: one from the relevant regulatory authority in terms of the economic situation of the company; another from the BSI in terms of the technical and organisational requirements relating to data protection and data security.

No. Every consumer or plant operator is free to select a company of its choice as its metering point operator if that company possesses the necessary certificates.

Yes, by transferring that responsibility.

Firstly, this is an “opt out” for grid operators, e.g. if they wish to concentrate on their core business of grid operation or if they cannot meet the price cap requirements. Secondly, the mechanism boosts competition to operate metering points.

Yes, if the normally responsible metering point operator fails to perform its obligations properly in terms of the roll-out of smart meters and modern metering devices.

The rules on the procedure do not establish new, sector-specific procurement law, but are based on the general rules of the Act against Restraints of Competition.

At present, electricity, gas, heating and district heat are metered and billed by separate companies. This necessitates several different meter-reading dates and invoicing procedures. The Metering Point Operation Act is to introduce a technology which combines these processes and can reduce costs for the consumer.

No, but there will be incentives to simplify metering point operation and to optimise the costs for the consumer. For example, landlords can initiate a corresponding modernisation of their properties. New gas meters must – as already stated by the Energy Industry Act – be capable of integration into smart metering systems via an interface.

No, it does not contain any rules on this. However, the smart meter gateway can serve as a secure communication infrastructure for this and as a standard solution for this area too.