In 2009, an EU directive by Parliament and Council mandated a large-scale roll-out of smart electricity meters in a decade. Under the directive, such systems are to be installed in 80% of households. The expectation is that with smart meters, the electricity grid can be managed more effectively. Household appliances could be remote controlled to operate when demand is low, thus stabilising the grid.

Yet in Germany, a model market because of the Energiewende (energy transition), which urgently requires more demand-side management to balance fluctuating renewables, the installation of smart meters has been met with strong opposition. The possible result is a massive delay in the implementation of the plan.

To date, Germany has had rather loose regulations on smart grids. In 2014, detailed rules for their roll-out have to be presented. In July 2013, a cost-benefit analysis conducted by the consultancy Ernst & Young and commissioned by the German Ministry of Economics already dampened the expectations for Germany to become a leader in this field. The study recommended that the country abandon the 80% of households installation target. At the same time, it proposed a number of measures to speed up the installation of smart meters, which are currently only mandatory for large consumers, in new buildings and for bigger renewable energy producers.

Ernst & Young proposed the installation of a simple version of smart meters in every household once the old mechanical metering system has to be replaced after a maximum of 16 years. Secondly, more advanced systems would be required for consumers of over 6,000 kilowatt hour (kWh) per year, renewable energy producers with a capacity over 250 watts, electric car chargers and heat pumps. By 2029, 50 million smart meters would be installed. The total cost would be in the range of 10 billion.

Even if this plan is implemented, Germany would be late in comparison to the European front-runners. All Swedish consumers were equipped with smart meters years ago. In Italy, around 90% of the households have a smart meter installed. In France and Spain, implementation is expected to be completed in 2018. Ireland and the UK plan to finish installations in 2019 and the Netherlands in 2020, according to Ernst & Young. In Austria, however, the obligatory installation of smart meters was stopped this summer, following opposition by consumer and data protection organisations.

Germany could follow Austria's example. Ernst &amp...

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