Smart Grid

November 08, 2012

The Future of Smart Metering in Europe Now in German Hands

2013 will prove to be an interesting year for a lot of reasons, but what some may not have expected is that according to the conclusions recently posed by a Berg Insight research report, next year is going to be the time that Germany decides the future of smart metering in Europe.

The Berg Insight report shows that the smart metering solutions market is going to be strong throughout much of Europe until about 2017. The installed base of smart meters throughout Europe is expected to grow at a rate of 20.5 percent, reaching 154.7 million smart meters installed by 2017. The overall market penetration rate for smart meters is expected to reach 56 percent by 2017 across the so-called "EU27+2" area, up from just 18 percent in 2011. It's further expected that, by 2020, there will be smart meters in seven out of every 10 homes in the EU.

Hinging on these expansion figures at least somewhat is one of the biggest market forces in Europe, Germany. Germany remains the only major country that hasn't committed to a smart metering rollout. Germany had originally planned to let the market make the decision, but currently doesn’t believe the market seems terribly interested in such technology. Thus, Germany is looking into a nationwide rollout backed by regulations for 2013, when the results of a business case detailing the economic impact of smart metering in Germany will be formally released. This business case is expected to spell out whether the massive investment in smart grid technology—around 15-20 billion Euros ($19.1 to $25.5 billion in U.S. dollars)—will provide return sufficient in energy savings and grid optimization to outweigh the major expense.

If Germany goes in on smart metering, it will open the floodgates on a massive market complete with opportunities for new products to come into play down the line. If Germany passes, then the market for smart metering will essentially close around 2020 which leaves the third generation of smart metering that is set to roll out in 2030.

Without Germany in play, European makers of smart metering technologies are left to operate in a market with growth potential but a very clear shelf life. However, they have a potential to see some major upside, not to mention what may well come into play with German firms joining in the market. Germany's entry--or refusal to do so--into the market poses a lot of questions for smart metering systems as a whole, and likely has a lot of firms sweating until that business case is finally brought out.

Edited by Jamie Epstein