Roadmap Guidelines

Roadmap for innovative smart metering services
Guidelines by Professor Tadeusz Skoczkowski,

Warsaw University of Technology
List of Acronyms
AMI
AMR
DER
DGM
DMS
DP
EMS
EV
ICT
IEA
IT
PEV
PHEV
RESC
SCADA
WAN
Advanced Metering Infrastructure

Automated Meter Reading
Distributed Energy Resources
Distribution Grid Management
Distribution Management System
Dynamic Pricing
Energy Management System
Electric Vehicle
Information and Communication Technologies
International Energy Agency
Information Technology
Plug-in Electric Vehicles
Retail energy supply company
Supervisory Control and Data Acquisition
Wide Area Network
The sole responsibility for the content of this publication lies with the authors. It does not necessarily reflect the opinion
of the European Union. Neither the EACI nor the European Commission are responsible for any use that may be made of
the information contained therein.
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Definitions
AMI: The communications hardware and software and associated system and data management
software that creates a network between advanced meters and utility business systems and which
allows collection and distribution of information to customers and other parties such as competitive
retail providers, in addition to providing it to the utility itself.
AMR: Automated Meter Reading is a term denoting electricity meters that collect data for billing
purposes only and transmit this data one way, usually from the customer to the distribution utility.
Cyber Infrastructure: Includes electronic information and communications systems and services and
the information contained in these systems and services. Information and communications systems
and services are composed of all hardware and software that process, store, and communicate
information, or any combination of all of these elements. Processing includes the creation, access,
modification, and destruction of information. Storage includes paper, magnetic, electronic, and all
other media types. Communications include sharing and distribution of information. For example:
computer systems; control systems (e.g. SCADA); networks, such as the Internet; and cyber services
(e.g., managed security services) are part of cyber infrastructure.
Cyber Security: The protection required to ensure confidentiality, integrity and availability of the
electronic information communication systems1.
Demand-side management (DSM): Demand-side management is consumer load reduction at the
time of system peak due to utility programs that reduce consumer load during many hours of the
year. Examples include utility rebate and shared savings activities for the installation of energyefficient appliances, lighting and electrical machinery, and weatherization materials. In addition, this
category includes all other demand-side management activities, such as thermal storage, time-of-use
rates, fuel substitution, measurement and evaluation, and any other utility-administered demandside management activity designed to reduce demand and/or electricity use.
Implementation: The process of putting a roadmap into action, by carrying out projects and
initiatives that address roadmap tasks and priorities, and by monitoring progress using a tracking
system.
Interoperability: The capability of two or more networks, systems, devices, applications, or
components to exchange and readily use informationsecurely, effectively, and with little or no
inconvenience to the user.
Roadmap: A specialised type of strategic plan that outlines activities an organisation can undertake
over specified time frames to achieve stated goals and outcomes.
Roadmapping: The evolving process by which a roadmap is created, implemented, monitored and
updated as necessary.
Setting a vision: The process of analysing future scenarios and identifying objectives.
Smart grid: Electricity networks that can intelligently integrate the behaviour and actions of all users
connected to it - generators, consumers and those that do both in order to efficiently deliver
sustainable, economic and secure electricity supplies2.
Smart metering: Smart metering is designed to provide utility customers information on a real time
basis about their domestic energy consumption. This information includes data on how much gas and
electricity they are consuming, how much it is costing them and what impact their consumption is
having on greenhouse gas emissions.
1
NIST Draft Publication: NIST Framework and Roadmap for Smart Grid Interoperability Standards Release 1.0
(Draft), U.S. Department of Commerce, September 2009.
2
The European Technology Platform SmartGrids.
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Stakeholders: Relevant individuals who have an interest in seeing the roadmap developed and
implemented, such as representatives from industry, government, academia and non-governmental
organisations.
Standard: A technical specification, usually produced by a Standards Development Organization
(SDO).
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Introduction
The term roadmap is being extensively used in many areas, recently especially in politics. A definition
of a roadmap can be found anywhere. For example in the Oxford Advanced Learners Dictionary it is
described as3:
1. a map that shows the roads of an area, especially one that is designed for a person who is
driving a car,
2. a set of instructions or suggestions about how to do something or find out about something.
This report is based on a much useful definition of what constitutes a roadmap in the energy
context, and the specific elements it should comprise provided by the IEA4. Accordingly the IEA has
defined its global technology roadmap as:
a dynamic set of technical, policy, legal, financial, market and organisational requirements
identified by the stakeholders involved in its development. The effort shall lead to improved and
enhanced sharing and collaboration of all related technology-specific research, design,
development and deployment (RDD&D) information among participants. The goal is to
accelerate the overall RDD&D process in order to deliver an earlier uptake of the specific
technology into the marketplace.
Roadmapping, used for decades in technology-intensive industries, is a useful tool to help address
complicated issues strategically at the national, regional and global levels. To help turn political
statements and analytical work into concrete action, the IEA is developing a series of global
roadmaps devoted to low-carbon energy technologies5. The IEA has begun work on other
roadmaps for other low-carbon energy technologies, including Smart Grids.
There are many kinds of roadmaps. Those of the IEA provided road maps are technology specific
roadmaps, which are intended to support the development of a specific type of technology It is to be
mentioned that this road map is not a technological one. It falls rather into the category of purely
implementation road maps understood as a strategic plan that describes the steps an organisation
needs to take to achieve stated outcomes and goals. This roadmap identifies the short term and long
term plans for smart metering roll-out.
It clearly outlines links among tasks and priorities for action in the near and long term. As an effective
roadmap it also includes metrics and milestones to allow regular tracking of progress towards the
roadmaps ultimate goals.
Today there is not a final roadmap to show utilities how to develop a Smart Grid that is truly in that
utilitys unique own best interests. Rather, we believe that each utility must analyze and plan for its
Smart Grid foundation and future based on its various stakeholders interests, and the financial and
human resource limitations imposed in the current economy.
Oxford Advanced Learners Dictionary, Oxford University Press 2010

IEA, Technology Roadmaps, http://www.iea.org/subjectqueries/keyresult.asp?KEYWORD_ID=4156
5
Energy Technology Roadmaps a guide to development and implementation, IEA, Paris, 2010.
4
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Road map general rules

Key elements of a successful roadmap6
A successful roadmap contains a clear statement of the desired outcome followed by a specific
pathway for reaching it. This pathway should include the following components:
1. Goals: A clear and concise set of targets that, if achieved, will result in the desired outcome;
quantified goals.
2. Milestones: The interim performance targets for achieving the goals, pegged to specific
dates.
3. Gaps and barriers: A list of any potential gaps in knowledge, technology limitations, market
structural barriers, regulatory limitations, public acceptance or other barriers to achieving
the goals and milestones.
4. Action items: Actions that can be taken to overcome any gaps or barriers that stand in the
way of achieving the goals; typical actions include technology development and deployment,
development of regulations and standards, policy formulation, creation of financing
mechanisms and public engagement.
5. Priorities and timelines: A list of the most important actions that need to be taken in order to
achieve the goals and the time frames, taking into account interconnections among those
actions and stakeholder roles and relationships.
Energy Technology Roadmaps a guide to development and implementation, IEA, Paris, 2010.
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The logic of a roadmap is depicted in fig. 1.
GOALS
MILESTONES
GAPS AND BARRIERS
ACTION ITEMS
ACTION ITEMS
Figure 1: The logic of a roadmap.
If designed correctly, a successful roadmap should provide the ability to link any project or activity
back through this logical structure to understand how the project or activity ultimately contributes to
the achievement of the roadmap goals. Simply writing a roadmap is not enough the true measure
of success is whether or not the roadmap is implemented and achieves the organisations desired
outcome.
The most effective roadmapping initiatives rely upon sound data and analysis in combination with
expert workshops to build consensus, thereby gathering the information needed for the roadmap
while also building awareness and support throughout the process.
The whole roadmap process outline is presented in fig. 2. In this report only aspects of road map
preparation are covered i.e. planning and preparation, visioning and roadmap development.
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Figure 2: Roadmap process outline.

As seen from fig.2 roadmaping is a long term process, usually involving many stakeholders being
represented by designated experts. A constant feedback in the form of workshops is an essential
element to obtain a consensus which in practice is a prerequisite of a successful roadmap
implementation. Also revisions of a roadmap in the implementation phase are not to be avoided.
Purpose of creation of this roadmap

Developing a successful framework for Smart Metering starts with a roadmap which establishes an
effective, cost-efficient approach toward Smart Metering implementation having in view far more
further reaching goal of Smart Grid building.
Physical and institutional complexity of the electricity system makes it unlikely that the market alone
will deliver smart grids. Government, private sector and customer and environmental advocacy
groups must work together to define electricity system needs and determine smart grid solutions.7
This roadmap aims to identify the primary tasks that must be addressed in order to reach its vision
for smart metering roll-out. It constitutes an attempt to identify needs, barriers to smart metering
deployment and then provides a guidance of what, by whom and how should be done
It is of paramount importance to remember throughout the whole process of smart metering
roadmapping that smart metering is a part of much broader term of smart grid. Building smart
metering systems in a country without placing it in the whole future smart grid process is a mistake
already made in many countries. Therefore a broader, view on smart metering from the point of view
of smart grids is considered vital and indispensible and is also discussed here.
The roadmap does not attempt to cover every aspect of smart metering and its deployment. For
example, more detailed technical issues are not addressed. Neither does the roadmap serve as a
beginners guide to smart metering. However the road map is based on a wide literature research
Smart Grid Roadmap, IEA.
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and used references and resources are cited where appropriate and can be used as useful source of
additional self study.
The roadmap should be regarded as a work in progress as it describes a fairly dynamic process of SM
development. More importantly, as the technology, market, power sector and regulatory
environment continue to evolve, additional tasks will come to light.
Finally, the objective of this roadmap is to identify actions to accelerate SM deployment across EU. In
some MS, certain actions will already have been achieved, or will be underway; but many countries,
particularly those in new MS , are only just beginning to develop SM infrastructure. Accordingly,
milestone dates should be considered as indicative of urgency, rather than as absolutes.
This roadmap outlines a set of quantitative measures and qualitative actions that define national
pathway for SM to 2010...2015..2020.
Roadmap content and structure

This report on how to prepare a roadmap for smart metering and additional services is organised into
seven sections.
In the first section some initial remarks on the essence of road maps are given.
Section two provides a short description on the way in which roadmaps should be written. The
objective of this presentation is to familiar the reader with international ways (standards) of
preparation of roadmaps. The methodology proposed by International the Energy Agency has been
chosen for this purpose.
The next two sections, Smart grid and Smart metering namely, are a review of most essential
issues concerning the two topics. It has been underlined that when designing smart metering
systems they shall be a part of a smart grid. Concept of AMI has been introduced to contrast it with
simple AMR. For the sake of brevity, only explanatory text that is essential is included. The section
can no way be regarded as clear and comprehensive material on the two extremely wide subjects.
Stress has been put to provide the sources used so that a keen reader may use them to deepen his or
her knowledge when necessary.
These two chapters can be omitted by those readers who posses substantial knowledge on smart
grids and do not need this lengthy introduction.
Section 6. discusses steps and categorises the actions and milestones to be undertaken by
stakeholders (policy makers, industry and power system actors, end-users) in the process of
preparation the roadmap. The aim of this is to help guide them in their efforts to successfully
implement the roadmap activities and achieve the global wind deployment targets. This section
contains also a proposal how to organise the process of preparation and implementation of a
roadmap for smart metering.
Last section, Recommendation, provides some general rules to be considered when one prepares
such a roadmap.
Finally, a list of most important bibliography is presented.
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Smart grid
Smart grid definitions
Smart Metering is also a key element of the Smart Grid, providing a two way link between the grid
operators at one end and customers and suitably equipped home appliances at the other. For
instance, it is possible for grid operators to remotely adjust thermostats in customers' homes to
reduce loads on the system. In turn the utility would have to offer their customers an acceptable
tariff to accept this arrangement. This also links smart metering into home automation technology8.
In general Smart Grids are power grids, with a coordinated management, based on bi-directional
communication, between
grid components,
generators,
energy storages.
consumers,
to enable an energy-efficient and cost-effective system operation that is ready for future challenges
of the energy system9.
Smart Grid can be defined as electricity networks that can intelligently integrate the actions of all
users connected to it generators, consumers and those that do both in order to efficiently deliver
sustainable, economic and secure electricity supplies10.
In the USA the term Smart Grid refers to a modernization of the electricity delivery system so it
monitors, protects and automatically optimizes the operation of its interconnected elements from
the central and distributed generator through the high-voltage network and distribution system, to
industrial users and building automation systems, to energy storage installations and to end-use
consumers and their thermostats, electric vehicles, appliances and other household devices11.
FERC identified four Smart Grid functional priorities that include12:
1. Wide-area situational awareness: Monitoring and display of power-system components and
performance across interconnections and wide geographic areas in near real-time. Goals of
situational awareness are to enable understanding and, ultimately, optimize management of
power-network components, behaviour, and performance, as well as to anticipate, prevent,
or respond to problems before disruptions can arise.
2. Demand response: Mechanisms and incentives for utilities, business and residential
customers to cut energy use during times of peak demand or when power reliability is at risk.
Demand response is necessary for optimizing the balance of power supply and demand.
3. Electric storage: Means of storing electric power, directly or indirectly. The significant bulk
electric energy storage technology available today is pumped storage hydroelectric
technology. New storage capabilitiesespecially for distributed storagewould benefit the
entire grid, from generation to end use.
4. Electric transportation: Refers, primarily, to enabling large-scale integration of plug-in electric
vehicles (PEVs). Electric transportation could significantly reduce U.S. dependence on foreign
European Smart Metering Alliance (ESMA), http://www.esma-home.eu/

National Technology Platform Smart Grids Austria.
10
The definition referred to above was adopted by the European Technology Platform for the Electricity
Networks of the Future, see Smart Grids and smart regulation help implement climate change objectives,
ERGEG FS 10-01, January 2010, 2; see also www.smartgrids.eu/?q=node/163.
11
The Energy Independence and Security Act of 2007.
12
Report to NIST on the Smart Grid Interoperability Standards Roadmap, June 17, 2009.
9
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oil, increase use of renewable sources of energy, and dramatically reduce the nations carbon
footprint.
Besides the FERC priority applications, two cross-cutting prioritiescyber security and network
communicationswere included, and two other priority applicationsadvanced metering
infrastructure and distribution grid managementwere added because they represent major areas
of near-term investment by utilities:
1. Cyber security: Measures to ensure the confidentiality, integrity and availability of the
electronic information communication systems, necessary for the management and
protection of the Smart Grids energy, information technology, and telecommunications
these infrastructures.
2. Network communications: Encompassing public and non-public networks, the Smart Grid will
require implementation and maintenance of appropriate security and access controls
tailored to the networking and communication requirements of different applications, actors
and domains.
3. Advanced metering infrastructure (AMI): Primary means for utilities to interact with meters
at customer sites. In addition to basic meter reading, AMI systems provide two-way
communications that can be used by many functions and, as authorized, by third parties to
exchange information with customer devices and systems. AMI enables customer awareness
of electricity pricing on a real-time (or near real-time) basis, and it can help utilities achieve
necessary load reductions.
4. Distribution grid management: Maximizing performance of feeders, transformers, and other
components of networked distribution systems and integrating with transmission systems
and customer operations.
The latest document from the European Regulators Group for Electricity and Gas (ERGEG) defines
smart grid in a slightly different way as: an electricity network that cost-efficiently can integrate the
behaviour and actions of all users connected to it generators, consumers and those that do both
in order to ensure a sustainable power system with low losses and high levels of quality, security of
supply and safety13. At the same time according to the ERGEG the term intelligent grid should
be distinguished from intelligent (smart) metering.
As the backbone of the power industry, the electricity grid is now the focus of assorted technological
innovations. Utilities across the world are taking solid steps towards incorporating new technologies
in many aspects of their operations and infrastructure. At the core of this transformation is the need
to make more efficient use of current assets. Figure 3 shows a typical utility pyramid in which asset
management is at the base of smart grid development. It is on this base that utilities build a
foundation for the smart grid through a careful overhaul of their IT, communication, and circuit
infrastructure.
13
ERGEG Conclusions Paper on Smart Grids, Ref: E10-EQS-38-05, 1819, 10 June 2010,
http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_CONSULT/
CLOSED%20PUBLIC%20CONSULTATIONS/ELECTRICITY/Smart%20Grids/CD/
E10-EQS-38-05_SmartGrids_Conclusions_10-Jun-2010.pdf.
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14
Fig. 3 Smart grid pyramid .
As fig. 4 shows, the metering side of the distribution system has been the focus of most recent
infrastructure investments. The earlier projects in this sector saw the introduction of automated
meter reading (AMR) systems in the distribution network. AMR lets utilities read the consumption
records, alarms, and status from customers premises remotely.
Fig. 4 The evolution of the smart grid15.
14
Farhangi H.: The Path of the Smart Grid, IEEE Power & Energy Magazine, January/February 2010.
15
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Figure 5 suggests, although AMR technology proved to be initially attractive, utility companies have
realized that AMR does not address the major issue they need to solve: demand-side management.
Due to its one-way communication system, AMRs capability is restricted to reading meter data. It
does not let utilities take corrective action based on the information received from the meters. In
other words, AMR systems do not allow the transition to the smart grid, where pervasive control at
all levels is a basic premise. Consequently, AMR technology was short-lived. Rather than investing in
AMR, utilities across the world moved towards advanced metering infrastructure (AMI). AMI
provides utilities with a two-way communication system to the meter, as well as the ability to modify
customers service-level parameters. Through AMI, utilities can meet their basic targets for load
management and revenue protection. They not only can get instantaneous information about
individual and aggregated demand, but they can also impose certain caps on consumption, as well as
enact various revenue models to control their costs.
The emergence of AMI heralded a concerted move by stakeholders to further refine the everchanging concepts around the smart grid. In fact, one of the major measurements that the utility
companies apply in choosing among AMI technologies is whether or not they will be forward
compatible with their yet-to-be-realized smart grids topologies and technologies.
Fig. 5 Smart grid return on investments (ROI)16.

The current "rush" can result in a lack of structure around strategy and planning for smart grid
improvements. As utilities embrace smart grid technologies, many are tempted to develop a vision
and strategies in a hurried, reactionary fashion rather than taking a rigorous, structured approach to
determine what technologies will deliver the most value to the utility and its customer base17.
It is therefore so important to start any activities in smart grid or smart metering from preparation of
a reliable roadmap receiving support, at least on consensus basis, from all main stakeholders.
Smart grid benefits

Smart Grid benefits can be categorized into five types18:
16
Lieber B., Welch M.: A Smart Strategy for a Smart Grid, http://mthink.com/utilities/utilities/smart-strategyfor-smart-grid
18
Report to NIST on the Smart Grid Interoperability Standards Roadmap June 17, 2009.
17
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1. Power reliability and power quality. The Smart Grid provides a reliable power supply with
fewer and briefer outages, cleaner power, and self-healing power systems, through the use
of digital information, automated control, and autonomous systems.
2. Safety and cyber security benefits. The Smart Grid continuously monitors itself to detect
unsafe or insecure situations that could detract from its high reliability and safe operation.
Higher cyber security is built in to all systems and operations including physical plant
monitoring, cyber security, and privacy protection of all users and customers.
3. Energy efficiency benefits. The Smart Grid is more efficient, providing reduced total energy
use, reduced peak demand, reduced energy losses, and the ability to induce end-user use
reduction instead of new generation in power system operations.
4. Environmental and conservation benefits. The Smart Grid is green. It helps reduce
greenhouse gases (GHG) and other pollutants by reducing generation from inefficient energy
sources, supports renewable energy sources, and enables the replacement of gasolinepowered vehicles with plug-in electric vehicles.
5. Direct financial benefits. The Smart Grid offers direct economic benefits. Operations costs
are reduced or avoided. Customers have pricing choices and access to energy information.
Entrepreneurs accelerate technology introduction into the generation, distribution, storage,
and coordination of energy.
In the USA the Energy Independence and Security Act (EISA) of 2007 states that support for creation
of a Smart Grid is the national policy. Distinguishing characteristics of the Smart Grid cited in the act
include19:
Increased use of digital information and controls technology to improve reliability, security,
and efficiency of the electric grid;
Dynamic optimization of grid operations and resources, with full cyber security;
Deployment and integration of distributed resources and generation, including renewable
resources;
Development and incorporation of demand response, demand-side resources, and energyefficiency resources;
Deployment of smart technologies for metering, communications concerning grid
operations and status, and distribution automation;
Integration of smart appliances and consumer devices;
Deployment and integration of advanced electricity storage and peak-shaving technologies,
including plug-in electric and hybrid electric vehicles, and thermal-storage air conditioning;
Provision to consumers of timely information and control options; and
Development of standards for communication and interoperability of appliances and
equipment connected to the electric grid, including the infrastructure serving the grid.
Anticipated Smart Grid benefits are as follows20:
Improves power reliability and quality.
Optimizes facility utilization and averts construction of back-up (peak load) power plants.
Enhances capacity and efficiency of existing electric power networks.
Improves resilience to disruption.
Enables predictive maintenance and self-healing responses to system disturbances.
Facilitates expanded deployment of renewable energy sources.
Accommodates distributed power sources.
Automates maintenance and operation.
19
Energy Independence and Security Act of 2007 [Public Law No: 110-140] Title XIII, Sec. 1301.
20
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Reduces greenhouse gas emissions by enabling electric vehicles and new power sources.
Reduces oil consumption by reducing the need for inefficient generation during peak usage
periods.
Improves cyber security.
Enables transition to plug-in electric vehicles and new energy storage options.
Increases consumer choice.
The benefits from the Smart Grid can also be categorized by the three primary stakeholder groups21:
1. Consumers. Consumers can balance their energy consumption with the real time supply of
energy. Variable pricing will provide consumer incentives to install their own infrastructure
that supports the Smart Grid. Smart grid information infrastructure will support additional
services not available today.
2. Utilities. Utilities can provide more reliable energy, particularly during challenging emergency
conditions, while managing their costs more effectively through efficiency and information.
3. Society. Society benefits from more reliable power for governmental services, businesses,
and consumers sensitive to power outage. Renewable energy, increased efficiencies, and
PHEV support will reduce environmental costs, including carbon footprint.
Driving forces for smart grid

There are many aspects to successful Smart Grid development, some of which involve administrative
as well as operational components of an electric power utility, and must include a variety of
components:
IT involvement as well as operations, engineering and administrative management of

customer information systems (CIS) and geographic information systems (GIS) as well as
control center and dispatching operation outage management systems (OMS) and document
management systems (DMS).
Electrical substation automation as well as true power grid automation.
Third party services as well as in-house commitment of individual end-users.
Smart metering at all levels.
The major driving forces to alter the current power grid can be divided into four, general categories:
1. Increase reliability, efficiency and safety of the power grid while increasing the use of
renewable energy sources (prevent outages; lower CO2; reduce energy bills).
2. Enable decentralized power generation so homes can be both energy client and supplier
(provide consumers with interactive tools to manage energy usage).
3. Include flexibility for clients to choose power generation suppliers (this enables distributed
generation, solar, wind, biomass).
4. Create new, clean energy jobs related to renewables, plug-in electric vehicles, etc.
It is considered that the roadmap to a smarter grid has four waypoints:
1. Advanced metering and monitoring.
2. Transmission system that can efficiently move power from one location to another.
3. Power grid that incorporates large- and small-scale distributed generation with energy
storage that is manageable by power providers.
4. Secure and reliable communications infrastructure that operates in tandem with the future
electrical power grid.
21
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These waypoints are not laid out in a straight line such that we have to go from one to the other
along our path to the smart grid. In fact, different organizations and industries engage to manage the
complexity involved in designing this second-generation power grid (Gen2PG). Thus, not every city,
town or province or state will achieve a smart grid at the same time. Rather, the revolutionary result
of the smart grid will be achieved through evolutionary means. In order to maintain our standard of
living and the quality of service we have come to expect, this architectural change of the power grid
must evolve. At the present time, we are approaching the first waypoint above in the next two to
three years. Achievement of the full smart grid grand challenge is a decade away, as long as the
courses are maintained and funded.
Four priority applications were recommended by FERC in its policy statement22:
Wide-area situational awareness: Monitoring and display of power-system components and
performance across interconnections and wide geographic areas in near real-time. Goals of
situational awareness are to enable understanding and, ultimately, optimize management of
power-network components, behaviour, and performance, as well as to anticipate, prevent,
or respond to problems before disruptions can arise.
Demand response: Mechanisms and incentives for utilities, business and residential
customers to cut energy use during times of peak demand or when power reliability is at risk.
Demand response is necessary for optimizing the balance of power supply and demand.
Electric storage: Means of storing electric power, directly or indirectly. The significant bulk
electric energy storage technology available today is pumped storage hydroelectric
technology. New storage capabilitiesespecially for distributed storagewould benefit the
entire grid, from generation to end use.
Electric transportation: Refers, primarily, to enabling large-scale integration of plug-in
electric vehicles (PEVs). Electric transportation could significantly reduce U.S. dependence on
foreign oil, increase use of renewable sources of energy, and dramatically reduce the
nations carbon footprint.
Besides the FERC priority applications, two cross-cutting prioritiescyber security and network
communicationswere included, and two other priority applicationsadvanced metering
infrastructure and distribution grid managementwere added because they represent major areas
of near-term investment by utilities:
Cyber security: Measures to ensure the confidentiality, integrity and availability of the
electronic information communication systems, necessary for the management and
protection of the Smart Grids energy, information technology, and telecommunications
these infrastructures.
Network communications: Encompassing public and non-public networks, the Smart Grid
will require implementation and maintenance of appropriate security and access controls
tailored to the networking and communication requirements of different applications, actors
and domains.
Advanced metering infrastructure (AMI): Primary means for utilities to interact with meters
at customer sites. In addition to basic meter reading, AMI systems provide two-way
communications that can be used by many functions and, as authorized, by third parties to
exchange information with customer devices and systems. AMI enables customer awareness
of electricity pricing on a real-time (or near real-time) basis, and it can help utilities achieve
necessary load reductions.
Distribution grid management: Maximizing performance of feeders, transformers, and other
components of networked distribution systems and integrating with transmission systems
and customer operations.
22
Federal Energy Regulatory Commission, Smart Grid Policy, 128 FERC 61,060 [Docket No. PL09-4-000] July
16, 2009
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The Smart Grid Conceptual Model23

The Smart Grid Conceptual Model is a set of views (diagrams) and descriptions that are the basis for
discussing the characteristics, uses, behaviour, interfaces, requirements and standards of the Smart
Grid. This does not represent the final architecture of the Smart Grid; rather it is a tool for describing,
discussing, and developing that architecture. The conceptual model provides a context for analysis of
interoperation and standards, both for the rest of this document, and for the development of the
architectures of the Smart Grid. The top level of the conceptual model, in fact a whole, very general
model of smart grid, can be schematically depicted as presented in fig. 6.
Fig.6 Smart Grid Conceptual Model Top Level24.

The domains of the Smart Grid are listed briefly in tab. 1.
23
24
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Table 1 Domains in the Smart Grid Conceptual Model
A good look into the model and relations among its domains gives us fig.7 which shows the so called
Wide Area Situational Awareness (WASA) representing the monitoring of the power system across
wide geographic areas.
Fig. 7 Wide-Area Situational Awareness (WASA) Use Cases: Actors and Logical Interfaces25.
25
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As seen AMI is only a part of the whole concept of the smart grid. However from the point of interest
of smart metering AMI is the most essential part and therefore deserves a thorough reconsideration.
Advanced Metering Infrastructure26

Advanced Metering Infrastructure (AMI) is defined as the communications hardware and software
and associated system and data management software that creates a network between advanced
meters and utility business systems and which allows collection and distribution of information to
customers and other parties such as competitive retail providers, in addition to providing it to the
utility itself27.
For the sake of being more illustrative one can describe AMI as:
1. The hardware and software residing in, on, or closest to the customer premise for which the
utility or its legal proxies are primarily responsible for proper operation.
2. The hardware and software owned and operated by the utility or its legal proxies which has
as its primary purpose the facilitation of Advanced Metering.
AMI systems are the primary means for utilities to interact with their meters at customer sites.
However, in addition to basic meter reading, AMI systems provide two-way communications that can
be used by many functions and, as authorized, by third parties to exchange information with
customer devices and systems.
AMI systems consist of the hardware, software and associated system and data management
applications that create a communications network between end systems at customer premises
(including meters, gateways, and other equipment) and diverse business and operational systems of
utilities and third parties. AMI systems provide the technology to allow the exchange of information
between customer end systems and those other utility and third party systems.
Purpose / Value Proposition28

Advanced Metering Infrastructure systems promise to provide advanced energy monitoring and
recording, sophisticated tariff/rate program data collection, and load management command and
control capabilities.
Additionally, these powerful mechanisms will enable consumers to better manage their energy
usage, allowing the grid to be run more efficiently from both cost and energy delivery perspectives.
These advanced capabilities will also allow utilities to provision and configure advanced meters in the
field, offering new rate programs, as well as energy monitoring and control.29
Advanced Metering Infrastructure systems offer a tremendous amount of potential, yet they
introduce the requirements for industry proven, strong, robust, scalable, and open standards-based
Cyber Security solutions.30
26
The AMI-SEC Task Force references the definition of Advanced Metering Infrastructure which is in
alignment with the United States Federal Energy Regulatory Commission. From the FERC Survey on Demand
Response, Time-Base Rate Programs/Tariffs and Advanced Metering Infrastructure Glossary.
28
AMI-SEC Task Force Roadmap
29
Source: Advanced Metering Security Threat Model, available at:
http://www.ucaiug.org/UtilityAMI/AMISEC/Shared%20Documents/Forms/AllItems.aspx?RootFolder=%2fUtility
AMI%2fAMISEC%2fShared%20Documents%2fWorking%20Documents%2f2008%20Deliverables%2f1%20%20System%20Security%20Requirements%20(Risk%20Assessment)%2fThreat%20Identification&FolderCTID=&
View={2CDA7930-CA93-44F3-AC4D-9F98E89AEC38}
30
Source: See reference No. 4 (above)
27
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Functionalities of AMI
External clients use AMI system to interact with devices at customer site
A third party vendor wants to identify what customer equipment (e.g. air conditioning, pool pumps,
compressors, etc) is running and how much power each piece of equipment is drawing during a
particular time of day. The vendor may also want to control or program specific equipment (e.g. turn
on/off, adjust thermostat). The third party vendor makes an on-demand status and/or control
request of the customer equipment. The monitoring or status request is received by the Customer
EMS, the requestor and destination is authenticated and then the request is transmitted to the
specific customer site. The customer equipment receives the request and provides a response back
to the Customer EMS and the Customer EMS transmits the information back to the third party. If the
on-demand request is a control request, the customer equipment will adjust operations as requested
and provide an acknowledgement of receipt and processing through the Customer EMS back to the
third party.
The third-party monitoring and control capabilities described in this use case may provide customers
with increased options for programs and services that might not normally be provided by the utility
and also may offset some of the AMI costs. These proposed services will enable customers to more
easily participate in utility and non-utility demand reduction programs, by allowing third parties to
help them monitor and control their equipment.
Demand Response Management system manages demand through direct load control
A major benefit of the Advanced Metering Infrastructure (AMI) is that it supports customer
awareness of their instantaneous kWhr electricity pricing and it can support the utilities in the
achievement of its load reduction needs. As we see increased electricity demand on the grid, it may
result in energy shortages, therefore triggering the need for utilities to reduce energy consumption in
support of grid stability. The AMI will help facilitate load reduction at the customers site by
communicating instantaneous kWhr pricing and voluntary load reduction program events to the
customer and to various enabling devices at the customers site. Voluntary load reduction events
may be scheduled with a large amount of advanced notice (24 hrs) or near real-time. For the utility to
receive the desired customer response, we must provide them timely pricing, event and usage
information.
Related to this scenario is the measurement of the response to financial incentives, energy price
adjustments and other voluntary demand response programs. The customer responses will be used
to determine how and/or if they have responded to a pricing event, if the utility needs to launch
other demand response events to achieve the needed demand reduction and help the utility
determine how to structure future voluntary load reduction programs, to ensure the utility receives
the best customer response.
Building automation software/system optimization using electric storage
Energy storage, distributed generation, renewables, and demand response are used as mechanisms
to optimize building loads in response to both dynamic pricing (DP) signals and system operational
needs. The DP system provides the DP schedule through mechanisms such as email, pager, bulletin
board, or direct transfer. The DP operator for the customer must enter the schedule into the building
automation software (BAS) and perform the necessary optimization activities to implement the DP
goals. The building operator may choose to adjust how their equipment responds to pricing and
operational signals. Note that EMS or Energy Management System is often used interchangeably
with BAS.
For example, a large industrial customer that can curtail large loads during peak hours will get a
different rate than a small commercial customer with less ability to modify its load. The ESP and/or
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Grid operator sends signals (e.g. price / reliability) to the customers it serves, using the AMI system
and receives information from the customer
The customers Building Automation System (BAS) optimizes its loads and distributed energy
resources (DER), based on the pricing and reliability signals it receives, the load requirements and
constraints, and any DER requirements, capabilities, and constraints. The BAS understands the nature
and opportunity for altering consumption based on economic and comfort drivers, and, the physical
dynamics of the specific customer premises. The BAS then issues (or updates existing) schedules and
other control mechanisms for loads and for DER generation. These control actions may be
automatically implemented or may be reviewed and changed by the customer.
The BAS system uses the site-optimized algorithms to forecast its load and DER generation. It also
determines what additional ancillary services it could offer, such as increased DER generation or
emergency load reduction, and calculates what bid prices to offer these ancillary services at. The BAS
then submits these energy schedules and ancillary services bids to the ESP (or Scheduling
Coordinator, depending upon market structure), as input to the RTO/ISO market operations.
Outage detection and restoration using AMI
The AMI system should provide capabilities to detect and map outages to the customer portion of
the power grid. It should provide interfaces to interact with the DA system to enable automated,
remote restoration [or to confirm restoration occurred].
AMI System has to have access to a model of the connectivity of the system (or to provide it to an
external system) to be able to detect and map outages:
Power outage occurs, due to single customer problem, back hoe fade small number of
customers, transformer outage, phase outage, feeder outage, substation outage,
transmission outage, cross-system outage.
Detection begins via last gasp messages, DA (distribution automation) monitoring, customer
report, polling (status system), triggered polling, control monitoring. There can be different
durations and situations, including: momentary, short term outages, outages > 1 hour, false
positives, critical customer, customer with backup power
Mapping of extent occurs through Hole detection who isnt responding to AMI? Power
levels feeder line drops from 5 to 1 MW, root cause analysis where did it start?.
Responsibility determined, although the outage may be large enough that AMI provides no
immediately useful [too much] data for restoration. May bring it back in at end as part of
restoration verification.
Restoration begins with different situations, including prioritization, sub-outage restoration,
and verification of restoration
Actors
Table 2 provides a summary of the key actors and which domains they participate in.
The Advanced Metering Infrastructure (AMI) is characterized by interactions between the actors that
must traverse between the Customer Domain and the Operations Domain, although these same
Actors may interact over other infrastructures. Information is exchanged between devices of varied
complexity, ownership, and access rights.
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Table 2. Actors in AMI systems31.
31
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Communications Diagram
The complexity of AMI System communication is shown in fig. 8.
Page 23/86
Fig. 8 AMI System application summary communication diagram32.

The principle gap in this area is the substantial overlap without uniformity between metering models
in use33. Current protocols support primarily unidirectional relationships between the AMI head end
and the meter. Other applications both within and external to customer premises seek to interact
with the meter in near real-time on an as needed basis.
The primary goal of standards activities, should therefore, be the coercion of at least a subset of
these models into cleanly nested complexity levels with common semantics for each shared subset.
The next highest priority is determining how to infuse a common set of cross-cutting requirements
into these standards to facilitate exchange of confidential and authentic information across
standards. Currently each AMI standard has its own distinct set of cyber security protocols and
capabilities making sharing of information exceedingly complex and limited by the least common
denominator.
Coordination and future-proofing AMI Systems

Since AMI systems are going to become widespread, they will inevitably want to be used for more
than meter reading or other purely metering functions. They could be used for monitoring DER at the
customer site, for DA monitoring and possibly control, for access by third parties to gateways into the
customer HAN, etc.
Need to ensure AMI communications systems use open standards capable of interfacing to DER and
distribution automation equipment.
32
33
For example ANSI C12.19, IEC 61850, IEC 61968, SEP 1, SEP2, COSEM/DLMS.
Page 24/86
Risks in AMI34
The worst AMI system attack scenario is where an attacker maliciously, and quite easily, uses a cyber
attack (i.e., injects a computer worm into the network) to programmatically turn off power to every
meter in the grid simultaneously. The result of which would melt down the transmission and
distribution grid networks, take years and billions of dollars to repair and create catastrophic impacts
on business and society. In addition to this doomsday scenario, attackers can cause mistrust at all
levels of the AMI system, including the distribution utility back office35, systems, meter, home area
networks and even our corporate information technology systems. This is, simply put, not
acceptable and the probability of this happening can be *reduced | lessened+ through strong security
systems engineering practices.36
34

See also head-end systems and/or office a somewhat emerging term describing the major ingress/egress
point for AMI telemetry into a utilitys *central+ operations facilities.
36
Source: See reference No. 4 (above)
35
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Smart metering
Smart Metering definitions
There is no single definition of smart metering, however all smart-meter systems comprise an
electronic box and a communications link. At its most basic, a smart meter measures electronically
how much energy is used, and can communicate this information to another device which, in turn,
allows the customer to view how much energy they are using and how much it is costing them.
In terms of guiding principles, any smart metering system introduced should be based on37:
improvement of customer service and retail market functioning for all customers, and not
just for a limited number;
offering the right balance between functionalities and cost;
being as open as possible to downstream innovation in the home beyond the meter.
Smart or advanced electricity metering, using a fixed network communications path, has been with
us since pioneering installations in the US Midwest in the mid-1980s38.
Definition proposed by the European Smart Metering Alliance (ESMA) runs as follows39:
Smart metering is designed to provide utility customers information on a real time basis about
their domestic energy consumption. This information includes data on how much gas and
electricity they are consuming, how much it is costing them and what impact their consumption
is having on greenhouse gas emissions.
This definition focuses on objectives of Smart Metering not referencing to technology.
It is common that many refer to Wikipedia to find the definition there40:
A smart meter generally refers to a type of advanced meter (usually an electrical meter) that
identifies consumption in more detail than a conventional meter; and optionally, but generally,
communicates that information via some network back to the local utility for monitoring and
billing purposes (telemetering).
This definitions underlines technological aspects of smart metering.
Some use also the term Automated Metering Reading (AMR). It refers to technologies to optimize
the process of entering meter index values at some time into the database of a utility41.
Where the saving in the manual reading process compensate the cost of the infrastructure required
for AMR is questionable. It is agreed that this infrastructure should be used to run more services than
just automated meter reading. Some use the following expression to illustrate the relationship
between AMI and SM:
AMI = Smart Meter + Smart Customer + Smart Utility
AMI refers to the set of services enabled by smart meters (SM is one of these services). These
services are used either by the utility or by the customer.
Smart metering refers to a whole range of new functionalities which have been made available by
the introduction of electronic utility meters, low cost communications and enterprise software.
37
Building a European Smart Metering Framework suitable for all Retail Electricity Customers, EURELECTRICs
Position Paper, 2008,.
38
http://mthink.com/utilities/utilities/utilities-tags/ami/amr
39
European Smart Metering Alliance (ESMA)
40
http://en.wikipedia.org/wiki/Smart_meter
41
http://www.smart-energy.info/smart-metering/
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Smart metering allows utilities to remotely read and manage meters, communicate with final
customers and provide final customers with accurate and detailed energy usage information.
Smart metering is often synonymous with electricity metering but this does not need to be so and is
not the case in the ESD42, which covers all energy streams. In fact smart metering embraces the
following :
Electric energy metering.
Heat and cooling smart metering.
Gas smart metering.
Water smart metering.
Multi-utility smart metering.
Smart Metering and the Smart Grid

Progress in ICT as well as reductions of communication costs allow for new ways to modernize the
operation of the power grid. Furthermore, in the upcoming decade, huge investments are needed in
the power sector. This is due to the increasing energy demand, ageing of generation facilities and
transmission and distribution infrastructure, and the increasing share of renewable energy sources
(RES) and distributed generation (DG). In response to these developments, the electricity distribution
grids are developing into so-called smart grids. Smart metering is a key feature of these smart grids.
It is therefore important to understand the philosophy of these smart grids and then to learn how
these relate to smart metering services.
To support the development and deployment of a Smart Grid, many electric utilities are looking to
make their Advanced Metering Infrastructure (AMI) and Smart Meter investments now as a
precursor or enabler to additional Smart Grid, energy management, and consumer participation
initiatives43.
One of the critical issues facing these electric utilities and their regulators is the need to ensure that
technologies or solutions that are selected by utilities will be interoperable and comply with the yetto-be-established national standards. Further, many utilities want to ensure that the system they
select will allow for evolution and growth as Smart Grid standards evolve. To manage change in a
dynamically growing Smart Grid, it is essential to be able to upgrade firmware, such as meters, in the
field without replacing the equipment or rolling a truck to manually upgrade the meter firmware.
Remote image download capability, common practice today in many embedded computing devices,
will permit certain characteristics of the meter to be substantially altered on an as needed basis.
Transmission and distribution power system information models used currently must be modified as
needed to meet these requirements of smart grids.
Smart metering system is shown in fig. 9.
42
Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 on energy end-use
efficiency and energy services and repealing Council Directive 93/76/EEC 2006/32/EC.
43
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Fig. 9 Smart metering system44.
Benefits of smart metering

The vision of the Smart Metering includes dramatic increases in energy efficiency and cost savings to
both utilities and consumers, with the resultant environmental benefits that come from smart energy
use.
The most common benefits listed in literature are:
44
The end of estimated bills. The benefit of more frequent bills based on real consumption and
without waiting for a meter reader, will certainly appeal to most consumers imagination. It
will also tackle some of the serious debts which arise when estimated bills grossly
underestimate actual consumption. On the other hand, accurate bills mean that energy costs
can also rise strongly in certain periods of the year, which could be hard to bear for the most
disadvantaged in society.
The provision of historical data on bills to show how energy consumption compares with the
same billing period of the previous year. Involve consumer in energy management by
promoting energy efficiency and conservation, participation in Demand Response projects.
Enables new functions e.g. increase accuracy of measurements, reduce time usage and
billing, reduce bill complaints, better detection of fraud, simplified meter disconnection.
The possibility to become more aware of household energy consumption and the ability to
better manage energy consumption, resulting in savings on energy bills.
The ability to switch the supply contract between debit and credit without requiring manual
intervention or the installation of prepayment meters.
The ability to switch more easily between energy suppliers.
ESMA European Smart Metering Alliance, August 2009, http://esma-home.eu
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The ability to adapt energy consumption patterns to take advantage of time of use tariffs and
hence lower costs.
Defers investment in generation and infrastructure.
The ability to install micro generation measures without new metering arrangements.
New energy companies functions e.g. Asset management, Load Profile & Forecasting, CRM
(variable pricing), Utility Company Reasons for MDM, Mergers and Acquisitions unifying layer
for multiple metering systems, Implement Demand Response Competitive Service, Unifying
Platform for Market Participants.
Requirements e.g. higher resolution data, reduced latency of meter data, better methods to
disseminate consumption information, shortened data acquisition sampling intervals.
The possibility for prepaid or post paid schemes and easier credit, either by phone or internet
for pay as you go meters45.
Smart metering functionalities

Meter reading services provide the basic meter reading capabilities for generating customer bills.
Different types of metering services are usually provided, depending upon the type of customer
(residential, smaller commercial, larger commercial, smaller industrial, larger industrial) and upon the
applicable customer tariff. One can distinguish46:
Periodic Meter Reading.
On-demand Meter Reading.
Net metering for DER and PEV.
Feed-In Tariff Metering for DER and PEV.
Bill - Paycheck Matching.
In terms of functionality, in a residential or small business context a basic smart metering system is
one which allows for47:
1. The measurement of electricity consumption and supply characteristics (over representative
periods to legal metrology requirements);
2. The storage of measured data for multiple time periods;
3. Ready access to this data for consumers and authorized third parties, according to the
market model (independent of time and place see 4 & 5 below), regular remote transfer of
consumption and other metering data to DSO, the supplier and/or his agent from the meter
for the purposes of accurate billing (also in case of changing supplier or moving in/out)
without requiring access to the premises;
4. Accommodation of additional user functionality within the customers premises beyond the
meter (i.e. Local communication capability);
5. Allow for remote control of connections without entering the building (temporary limitation,
interruption and restoration of power);
6. It measures, and records information as to the continuity and quality of the supply and
provides this and other data to the DSO for purposes of system operation, planning, and loss
assessment.
45
Smart Metering Guide Energy Saving and the Customer.

47
Position Paper, 2008,
46
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7. It permits remote control of the available capacity (e.g. Temporary limitation, interruption
and restoration) for purposes of contract management or of specific consumer circuits or
equipment for the purposes of agreed load management.
8. In cases where micro-generation is installed in domestic homes, the meter design takes into
account the implications this may have on the system and on the market.
Ideally, functions 1 to 5 should be provided in any smart metering package. Functions 6 to 8,
although desirable, may be viewed as non-essential add-ons.
Features of Smart Metering can be provided as48:
Automatic processing, transfer, management and utilisation of metering data.
Automatic management of meters.
Two-way data communication with meters.
Provides meaningful and timely consumption information to the relevant parties and their
systems, including the energy consumer.
Supports services that improve the energy efficiency of the energy consumption and the
energy system (generation, transmission, distribution and especially end-use).
In addition, there are several goals that should be central to any effort to develop the Smart Grid
information infrastructure, including smart metering. These goals include:
Functional requirements are met.
Low cost of implementation.
Low cost of maintenance.
Adaptable.
Interoperable.
Protocol independent.
Scalable.
Broad industry support.
There are a number of design issues which need to be considered before embarking on any smart
metering rollout. These design issues, in EURELECTRICs view, have the potential to significantly
affect the success of smart metering for customers, suppliers and distributors49. These are as follows:
1. Interoperability (if and how the meter can openly communicate with other devices);
2. Standardisation (what should or could be standardised and what should be left to
innovation);
3. Future Proofing (how can smart metering systems be designed so that there is in-built
flexibility for possible future changes in technology or application);
4. Certification (what measures can be taken to reduce intellectual property costs and increase
device warranties and other guarantees thereby ultimately reducing costs for customers)?
Two of the terms require special clarification, namely the future proofing and certification.
The term future proofing addresses the issue of technological development and imposes that a
smart metering system has to be built in a way which allows for future supply and demand-side
applications without the need for large new investments in the metering systems themselves.
48
ESMA
Position Paper, 2008.
49
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Certification refers to further way of reducing risk for customers and meter owners is for meter
manufacturers to provide certification of smart meters and related equipment. Although cost-benefit
analyses currently being conducted in Member States typically use an average lifespan of 10 to 15
years, this has not in many cases been certified by in metrological requirements or by metering
manufacturers. Other legal issues relating to metrological requirements concern respect for
ownership of consumption data as well as provision against tampering.
Driving forces for smart metering

The development of smart metering systems would not be possible without the changes seen in
electronic communications over the last 5 years50. However, technological advancement is just the
catalyst; the four main drivers for the introduction of smart metering have been
1. the need for efficient and reliable processes and systems resulting from the liberalisation of
retail electricity markets,
2. the opportunity to improve operation of the distribution network,
3. the recent political drive toward greater energy efficiency51,
4. the facilitation of the introduction of dynamic grid operation, i.e. smart grids. A final, albeit
indirect, driver concerns
5. the ability of smart metering to allow for lower-cost multi-utility meter reading.
Identification of barriers
The Smart Grid has many of the following attributes, some of which constitute barriers to smart
metering development:
Takes a long time to complete.

Involves iterative process.
Includes deploying one component after another.
Requires planning on a system-wide basis.
Lacks quick solutions.
Needs a systematic approach from the onset.
Demands flexibility and adaptability to changing technology over time.
EUROELECTRIC recognizes the following three barriers52:

1. The first barrier concerns the fact that DSOs and/or meter owners will face considerable
financial and technical risks in any large scale roll-out of this new technology. On the financial
side, there is a disjuncture as the market operators that invest in the metering infrastructure
(i.e. in most cases DSOs) do not reap all or most of the benefits. In order for a DSO to invest
in smart metering, it must be able to recover the net costs from the beneficiary (ies). Such a
50
Position Paper, 2008,.
51
In recent years, the energy efficiency driver has been the main driver in Sweden (increased meter readings
to promote energy awareness), in Victoria state in Australia (i.e. to reduce summer peaking plant use) and in
Ontario state in Canada (as part of a larger energy conservation programme). At European level, guidance on
the employment of metering for energy efficiency purposes is provided in Article 13 of the Directive on energy
end-use efficiency and energy services.
52
Position Paper, 2008.
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situation would require distribution or meter charge rebalancing. In addition to the net cost
of the systems and meters, risks relating to technological changes must be outlined upfront.
2. The second barrier concerns those countries where there is no business case for smart
metering i.e. costs outweigh benefits. In Member states where electricity consumption is low
(i.e. meter cost as a proportion of electricity expenditure) and where the population is
dispersed (i.e. high per meter costs of communication), the business case for smart metering
may not exist. In addition, a high net cost would be less acceptable again for member states
with lower-than-average income levels.
3. The third issue relates to how smart metering is deployed by DSOs. A geographical rollout of
smart metering is often preferable to an ad-hoc approach as many of the benefits of smart
metering are network-related. For instance, if meters are replaced on a customer-bycustomer basis, then the meter owner faces higher per unit procurement and installation
costs. In addition, some of the system benefits of a geographical roll-out would be lost.
Therefore, smart meters should be rolled-out at least on a clustered basis rather than on
demand.
The principle gap in the area of standardisation is the substantial overlap without uniformity
between metering models in use53. Current protocols support primarily unidirectional relationships
between the AMI head end and the meter. Other applications both within and external to customer
premises seek to interact with the meter in near real-time on an as needed basis.
Improving energy efficiency has been listed as one of principal drives for smart metering. However,
implementation of smart metering systems that reduce energy consumption is not simple for a
number of reasons. The main reasons are:
Although trials seeking to establish the energy saving benefits of smart metering have yielded
promising results, the trials have been carried out in different ways so that firm conclusions
cannot be drawn. It is also clear that final customer reaction depends on the way that the
information is presented to them and the proposition they are offered by the Energy Retailer.
Smart metering has given best results in combination with other methods and not alone.
Smart metering systems provide a number of benefits beyond customer information and
different parties receive these benefits. This creates the need to share the costs of
implementing smart metering in proportion to the benefits received. This becomes more of a
challenge as energy markets are broken up and more parties are involved.
Article 13 of the ESD54 offers a wide range of interpretations, where some of the key
parameters (especially estimated potential savings ) needed to make these judgements are
not available or accepted by all parties. This lack of certainty leads to a cautious
interpretation of the Directive that may fail to deliver the full energy saving benefits of smart
metering.
Smart metering is a recent development and there is only limited experience with it.
Consequently, there is a high degree of perceived risk in its implementation.55
Costs, energy savings and data security as controversies: The introduction of smart metering rarely
happens without controversies. The most controversial issues are related to the costs of the
investment, followed by concerns about actual energy savings and questions related to data security
and privacy. A major obstacle for the introduction of smart metering in the MS is the financing of the
investments and the question of allocation of the costs between those actors that benefit from the
introduction of smart meters.
53
For example the following standards are used: ANSI C12.19, IEC 61850, IEC 61968, SEP 1, SEP2,
COSEM/DLMS.
54
55
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Identification of stake holders and their role

A rough division of stake holders of smart metering is presented in table 3.
Table 3. Actors in the domains in the Smart Grid Conceptual Model56
Domain
Actors in the domain
Customers
The end users of electricity.
May also generate, store, and manage the use of energy. Traditionally,
three customer types are discussed, each with its own domain: home,
commercial/building, and industrial.
Markets
The operators and participants in electricity markets
Service Providers
The organizations providing services to electrical customers and utilities
Operations
The managers of the movement of electricity
Bulk Generation
The generators of electricity in bulk quantities.
May also store energy for later distribution.
Transmission
The carriers of bulk electricity over long distances.
May also store and generate electricity.
Distribution
The distributors of electricity to and from customers.
May also store and generate electricity.
List of Stakeholders of SmartGrids ETP57

The structure of the SmartGrids ETP Forum is an executive group of 12 individuals representing the
various groups of stakeholders: TSO, electrical systems manufacturers, DSO, ICT service providers,
regulation metering manufacturers, centralized generation, customer interaction and metering,
renewable generation, industrial R&D, End-users, academic and governmental R&D58.
56
57
SmartGrids ETP, http://www.smartgrids.eu/
58
Chairman: Ronnie Belmans K.U.LEUVEN-ELIA
1. TSO's will be represented by the new ENTSO-E and in particular by its secretary -general, Konstantin
Staschus.
2. DSO: will be represented by the new group of DSO's being formed and by its leader, Livio Gallo, ENELDistribuzione.
3. Regulators: will be represented in a first instance by CEER/ERGEG, later by ACER. Tahir Kapetanovic.
4. Generation: will be represented by Eurelectric, and in particular by Hans Ten Berge. Gunnar Lorenz will act as
Sherpa.
5. Renewables: will be represented by the EUREC organization , and Mr.Greg Arrowsmith.
6. Users: IFIEC. Peter Claes, secretary general has agreed
7. Electrotechnology equipment manufacturers: will be represented by T&D Europe Chair Bertrand Hugoo, and
his sherpa Mikel Zaldunbide, ORMAZABAL
8. Customer Demand and Metering will link to the ETP WG3 and to the "ICT for Energy Efficiency" groups
through their chair, Maher Chebbo, SAP.
9. Telecommunications will be represented by European Utilities Telecom Council and its chair, Miguel Angel
Sanchez Fornie, IBERDROLA.
10. Metering manufacturers and systems will be represented by the recently created European Smart Metering
Interest Group and its chair, Andreas Umbach and , John Harris acting as his sherpa.
11. Research and development within the electricity companies: will be represented by Yves Bamberger,
Executive Vice-President, Head of Corporate EDF R&D.
12. Research institutes, governmental organizations, university institutes, education: Duncan Botting, Executive
Chairman and Interim CEO at Scottish European Green Energy Centre.
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Main stakeholders in smart grid activities as identified by SmartGrids ETP are presented in fig. 10.
Fig. 10 Main stakeholders in smart grid activities59.
Policy Issues
In considering appropriate policy recommendations for full deployment of smart grid technology, it is
important to first set the context within which recommendations are being made. The first context is
the historical one, namely analyzing the lessons that have been learned for restructuring to date, in
order to ensure that we do not repeat the mistakes made in the past decade or two while
reconfiguring the nations power sector. The second context is dealing with the reality that the
electricity industry structure in a country today, while diverse, is fundamentally bipolar, divided
between jurisdictions and regions that have moved toward competitive markets and those that still
retain the vertically integrated monopoly model. Given that divide, it is difficult to offer a single set of
broad policy recommendations with universal applicability. This section examines smart grid policy in
both the monopoly and competitive supplier contexts, including the upsides and downsides to
each model. For reasons that will be clear in the discussion that follows, the policy recommendations
are largely made in the context of long-range objectives, while recognizing that they may play out
differently from one jurisdiction to another60.
Deriving from the first experiences in implementing the ESD61, it is recommended that policy-makers
and regulators define some guidelines about feedback for customers. Besides minimum harmonised
technical standards that are currently being developed, there is a need to identify which feedback
should be sent in which frequency and which level of detail to the final customer. From everything
59
SmartGrids ETP, http://www.smartgrids.eu/

Brown A., Salter R.: Smart grids issues in state law and regulation, 2010.
61
60
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that is known from recent research, final customers can only benefit from intelligent metering
systems when they receive adequate feedback about their consumer behaviour62.
We must understand the affect of policy and regulatory choices on technology choices.
For example, a regulatory decision that merely permits resale of electricity can enable a new (or
extended) business for charging Plug-in Electric Vehicles that follows the model for gasoline sale with
customers paying cash or using credit/debit cards to pay for charging, while using Automated
Demand Response and grid safety signals to ensure the continued reliability of the electricity
distribution infrastructure.
A further set of regulations and policy changes would be needed to support identity-based chargeback for energy use and supply to the home utility, but requires augmentation of the users
expectations and a great deal of additional complexity to allow identification, billing, clearing, and
related issues.
Policy makers and regulators should carefully consider the complexity and costs of the induced
technology changes, and whether changes are critical to Smart Grid evolution. For example, a
generative approach might take the minimal changes and allow the development of unregulated
business models, while a more complex chargeback scheme may require deep and rigid
technologiesjust because we can execute a technological solution does not necessarily mean that
we should.
1. Development of Architecture Governance and Policy Integration Processes. This task should
also include consistent approaches to energy industry business models where they are
critical to the development of Smart Grid components and equipment such as revenue
meters, and consumer owned equipment.
2. Consideration of changes in regulation to enable new business models and complex
technologies. Minor differences in regulation may require major investment in technology to
satisfy requirements. The standard cost-benefit analyses made by regulators need to address
broader economic and stakeholder issues.
Ownership of meters: In general the energy supplier or distributor is the owner of the electricity
meters in the MS. With the exception of Germany where the Ministry of Economic Affairs aims to (re)structure and liberalise the meter market for small energy users, there are no plans to change the
structure of ownership in the future in any MS.
Legal surroundings around smart metering

In Art.13 (1) the ESD63 stipulates that individual meters shall always be provided when an existing
meter is replaced (unless this is technically impossible or not cost-effective)64. Art. 13 ESD does not
make an explicit link to smart meters.
Moreover in Art.13 (2) the ESD says that billing shall be based on actual energy consumption and
be performed frequently enough to enable customers to regulate their own energy consumption.
Art. 13 ESD does not directly refer to smart metering. In most MS the transposition of Art. 13 did at
least trigger some discussions about the introduction of new metering technologies; these
discussions have been reinforced by the explicit provisions in the third legislative package. As can be
seen from the following tables, smart metering policies are at least under discussion in almost all
MS.
62
CA ESD, Executive Summary Report, 2010, http://www.esd-ca.eu/Reports/Executive-Summary-Reports.

64
CA ESD, WG 4.2 Report: Metering & Billing, confidential.
63
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Article 13 ESD is open to different interpretations regarding feedback to the final customer. A strong
interpretation demands smart meters and monthly bills; a loose interpretation requires only
individual meters and periodic bills (without specific details on how frequent billing shall be
provided). A common understanding about interpretation of Article 13 should be coordinated with
the implementation of the recently adopted Directive on the internal electricity market
(2009/72/EC), the work currently being done by the Smart Metering Coordination Group of different
standardisation bodies (CEN, CENELEC, ETSI) and in the course of the revision of other Directives (e.g.
2004/22/EC on measuring instruments)65.
Article 13 ESD has only limited causal influence on changes in metering & billing policies: In general,
both the transposition of Article 13 and the discussion about smart metering policies is well under
way in the MS. As of September 2009, 8 MS have not transposed Article 13 and in 6 MS smart
metering policies are not included in the transposition of Article 13 into national legislation. Most of
the participants in the CA ESD meetings argued that changes in metering and billing in their MS were
due to factors other than the ESD. That is to say that the causal influence of Article 13 ESD to the
practice of metering and billing in the MS is weak66.
Smart metering is also addresses in Annex A of the recently amended Directive on common rules for
the internal electricity market (Member States shall ensure the implementation of intelligent
metering systems (...). Where roll-out of smart meters is assessed positively, at least 80% of
consumers shall be equipped with intelligent metering systems by 2020).
The measures on consumer protection in Directive 2009/72/EC and 2009/73/EC (Art. 3 and Annex
1(1) lit i) are to ensure that consumers are properly informed of actual electricity/gas consumption
and costs frequently enough to enable them to regulate their own electricity/gas consumption
without additional costs to the consumer for that service.
In the related interpretative notes on retail markets the Commission services note that receiving
information on a monthly basis would be sufficient to allow a consumer to regulate his consumption
and that the introduction of appropriate smart meters would greatly assist the fulfilment of this
obligation67. . Additionally, the Commission argues that Member States should have regard to
appropriate pilot programmes and existing empirical results.
Regulatory issues68
Intelligent metering systems and intelligent networks in the third package
The next stage in the implementation of intelligent grids, or intelligent metering systems, in Member
States is defined by the provisions of the third liberalisation package, which consists of directives and
regulations pertaining to the European market in electricity and natural gas. The directives set forth
similar, though not identical, obligations to introduce such systems in both sectors. With this
reservation, subsequent discussion is based on the provisions of the new Electricity Directive with
reference to equivalent provisions in the new Gas Directive. Apart from direct reference to intelligent
metering systems and intelligent grids, one should also notice the natural correlation between the
development of such systems and the unbundling of distribution and transmission system operators.
According to the ERGEG, unbundling should encourage network operators to respond actively to the
climate change challenge and pursue the deployment of smart grids.
65

67
European Commission (2010). Retail Markets - Interpretative Note on Directive 2009/72/EC Concerning
Common Rules for the Internal Market in Electricity and Directive 2009/73/EC Concerning Common Rules for the
Internal Market in Natural Gas, Commission Staff Working Paper, Brussels.
66
68
Swora M.: Intelligent Grid: Unfinished Regulation in the Third EU Energy Package.
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Unbundling may also affect future EU legislation, which may stipulate the establishment of separate
types of grid operator activity that will consist of the management of metering information
(functional separation of metering) or even in creating separate legal entities responsible for
transparent data management (independent data operators). Unbundling in this area of activity may
be justified by the promotion of competition, transparency as well as by additional elements, that is
better protection of privacy of final users. So far, EU bodies have not proposed such plans or
proposals, but that does not imply that they might not appear in the future. Pursuant to Article 3(11)
of Directive 2009/72 (electricity) and the equivalent Article 3(8) of Directive 2009/73 (gas), Member
States (or regulators if given that task), shall strongly recommend that electricity undertakings
optimize the use of electricity, for example by providing energy management services, developing
innovative pricing formulas, or introducing intelligent metering systems or smart grids, where
appropriate. Directive 2009/72 provides an open catalogue of optimisation measures but it should
be understood that Member States, in their decision-making, shall be guided by current technology
status and economic capacity. Introduction of electricity (or natural gas) supply management can, for
example, consist of participation in voluntary electricity consumption reduction schemes. Within the
framework of such schemes, against an appropriate fee, the transmission system operator may limit
the quantity of energy supplied at peak times (when the price of energy is at its highest) to the end
user who has decided to join the scheme. Innovative price formulas (such as time of use, real-time
pricing or critical peak pricing) are predominantly based on the application of different prices of
electricity at peak time, when electricity is most expensive, versus off-peak. Under Directive 2009/72,
Member States are not absolutely obliged to introduce smart grids the introduction of intelligent
metering systems is the minimum requirement. However, the assumption of electricity consumption
optimisation made by the EU legislator may lead to the conclusion that deep implementation
should be equivalent to the introduction of intelligence throughout the entire grid, including the
implementation of intelligent metering systems with end users. This is the direction of provisions set
forth in Annex 1 to Directive 2009/72, which represents an extension of Article 3(7) in this Directive
(Article 3(3) in the Gas Directive), and introduces an obligation to ensure a high level of customer
protection by Member States. The provisions state that those measures have to apply at least to
household users. In the authors opinion, this means that the implementation of specific measures
targeted at households is an absolute prerequisite for compliance with the requirement of high
levels of protection for the consumer, but it seems desirable to apply those measures to other user
groups as well to the extent that it is possible. While particular legal systems introduce specific,
consumer friendly arrangements, it would not seem rational to separate the area of household end
user rights from industry user rights (e.g. a simple and short procedure for switching electricity or gas
supplier). Provisions included in the Annex, regulating detailed customer protection measures,
require access to energy consumption and measurement data (by consent and free of charge) by the
customers of electricity supply undertaking to each registered energy undertaking that supplies
electricity (Annex 1 to Directive 2009/72/EC, point 1, letter (h); Annex 1 to Directive 2009/73/EC).
This obligation was imposed on the entity entrusted with the management of such data. Since the EU
legislator decided to use a separate category of an entity entrusted with data management, it can
be concluded that it need not be identical with the electricity undertaking defined in Article 2(35) of
Directive 2009/72. It would appear that it will be up to each Member State, considering factors such
as the importance of competition, free access to information and safety, to decide who should be
declared as the entity entrusted with data management. Member States are obliged to specify the
format of data and the procedure governing data disclosure to suppliers and consumers. Under the
new Electricity Directive, no additional service costs should be imposed on consumers. This seems to
imply that the EU legislator prohibits the possibility of applying dedicated charges related to the
services referred to above but it probably cannot be interpreted to mean that this prevents energy
undertakings from shifting to end users a certain part of the costs incurred by system deployment (eg
intelligent meter purchase). Final users are entitled to receive relevant information on the actual use
and cost of electricity with such frequency that they may regulate their energy consumption. Such
information should be provided at specific time intervals, depending on the capacity of the users
metering equipment and the profile of the energy product in question. As mentioned above,
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consumers cannot be charged with any additional service cost (Annex 1 to Directive 2009/72, point 1
letter (i); Annex 1 to Directive 2009/73). One might wonder what the phrase frequently enough
means in the context of a measurement data provision but it is technically impossible to satisfy this
requirement with traditional induction meters. Even if it were theoretically possible, the costs of this
arrangement would exceed any potential benefits. In any event, and as previously noticed, the
rational introduction of this obligation should entail access to a two-way electronic communication
channel between the end user and the entity responsible for data management. Only on that
condition would it be possible to collect, process and transfer to users the data referred to in
paragraphs 1(h) and (i) of Annex 1 of the Electricity Directive (point 1, letter (i); Annex 1 to Directive
2009/73/EC). This issue is functionally related to the implementation of intelligent metering systems,
referred to in point 2, Annex 1 to Directive 2006/72/EC (point 2, Annex 1 to Directive 2006/73/EC).
According to this provision, Member States have to ensure the implementation of intelligent
metering systems. It is also specified in the provision that those systems should enable active
participation of consumers in the electricity supply market. System implementation is conditional in
nature. As per the provision in question, such implementation may be contingent on the economic
assessment of all long-term costs and benefits for the market and individual consumer, or on the
assessment of which type of intelligent metering is economically viable, and in what timeframe the
distribution of intelligent meters is feasible. The Directive requires that such assessment be
performed by 3 September 2012. When analysing the wording of those provisions, one has to ask
questions about the nature of such assessment. According to current wording, if the outcome of the
assessment is positive, 80 per cent of electricity consumers must be equipped with intelligent
metering by 2020. The contents of the assessment should be used by a competent agency of the
Member State as the basis for intelligent metering implementation schedule, within the target
timeframe of ten years. The Directive requires that Member States or their competent agencies
ensure interoperability of metering systems in their territory, with due consideration for appropriate
standards and best practices, as well as the importance of development of internal energy market.
In sum, when analysing the obligation to implement intelligent metering systems in Member States,
it seems that the EU legislator was extremely cautious but the result is a certain lack of clarity with
respect to the obligation imposed on Member States. The implementation of that obligation is
conditional on the Member State carrying out a positive assessment and, yet at the same time, the
implementation of an intelligent metering system in Member States is a prerequisite for
implementing the end user rights referred to earlier in this article. It appears that such caution
results from technical considerations, in view of technological maturity of intelligent metering
systems in the European Union. Smart grid technologies have been developing dynamically only for
the last few years, and as a result there are no uniform interoperability standards. New system
functionalities are just being tested, and demand response must be examined before it is possible to
evaluate potential energy efficiency gains.
Main technological issues concerning smart grid

There are a large number of specific issues concerning smart grids. Two of them poses a special
challenge and are applicable to smart metering as well. These two are namely:
Interoperability.
Cyber security.
Both of them, generic for smart grid, refer also to interoperability and security risk pertaining smart
metering and therefore should be considered with others issues specified in the following subclauses.
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An in-depth review of current technological solutions deployed in smart metering systems can be
found in the work69.
Interoperability70
Interoperability is defined as capability of two or more networks, systems, devices, applications, or
components to exchange and readily use informationsecurely, effectively, and with little or no
inconvenience to the user. The Smart Grid will be a system of interoperable systems. That is,
different systems will be able to exchange meaningful, actionable information. The systems will share
a common meaning of the exchanged information, and this information will elicit agreed-upon types
of response. The reliability, fidelity, and security of information exchanges between and among
Smart Grid systems must achieve requisite performance levels.
For smart metering, it is necessary to be able to communicate remotely with the meter. This is
enabled by a Wide Area Network (WAN). To support the introduction of new products and services
related to energy services and energy saving the design of the WAN should allow for future growth in
communication performance requirements (such as data rates, availability and speed of response).
To allow smart meters to integrate with smart homes control devices and customer owned energy
management software meters should contain a local bidirectional communication link. This
communication should be supported by the adoption of standard interfaces and data
communications protocols. Because smart meters record sensitive personal information, provide
data for billing and provide access to critical networks the security of the system must be managed
appropriately. It must be ensured that only approved parties can access the meter data and
communications networks.71.
Figure 11 presenting advanced metering infrastructure illustrates well the complexity of
interoperability in such systems.
69
Report on the identification and specification of functional, technical, economical and general requirements
of advanced multi-metering infrastructure, including security requirements, OPEN meter Open Public Extended
Network metering, 7FP.
70
71
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Fig. 11 Advanced metering infrastructure categorization of interfaces

There are a wide range of WAN technologies and ownership models available from a privately owned
WAN to use of the public Internet. Each WAN solution undertaken by a utility is based upon the
following criteria:
1. Ownership and general accessibility.
2. Standards used to develop it.
3. Connectivity to the wider Internet and the company intranet.
4. Physical security.
5. Security measures already taken.
6. Links to the metering LANs.
Security for Smart Grid information networks72

Because Smart Grid information flows through so many different networks with different owners, it
is of extreme importance to properly secure the information and the information networks. This
means preventing intrusion, at the same time allowing access for the relevant stakeholders.
Security, the so called cyber security, within the context of Smart Metering (AMI) is defined as those
measures that protect and defend AMI information and systems by assuring their ability to operate
and perform in the intended manner in the face of malicious actions, unauthorized users, and other
unintended actions.73
It is important to note that there are vital differences between AMI and classical information and
communications technology (ICT). The operational imperatives for AMI cyber security recognizes the
existence of gaps and a risk management differential between AMI and traditional ICT systems. AMI
72
73
Source: http://ucaiug.org/UtilityAMI/AMISEC/default.aspx
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lies at the intersection of physical and logical infrastructures. AMIs resiliency not only demands
security and continuity, but rethinking the relationship of systems to services. Without security in
AMI systems, electricity distribution will be unreliable and interruptible both on a physical and logical
scale. An AMI systems potential exposures may exist in control functions in the form of remote
service disconnects and management of devices in home area networks (HAN). These potential
exposures exemplify the increased risk against the grid as a whole.74
Security for the Smart Grid information network must include:
security policies, procedures, protocols, and security controls to protect Smart Grid
information in transit or residing in the network;
authentication policies, procedures, mechanisms, protocols, and credentials for

infrastructure components and network users;
security policies, procedures, protocols, and security controls to protect infrastructure

components and the interconnected networks;
Additional risks to the grid include:
Increasing the complexity of the grid could introduce vulnerabilities and increase exposure to
potential attackers and unintentional errors;
Interconnected networks can introduce common vulnerabilities;
Increasing vulnerabilities to communication disruptions and introduction of malicious

software that could result in denial of service or compromise the integrity of software and
systems;
Increased number of entry points and paths for potential adversaries to exploit; and
Potential for compromise of data confidentiality, including the breach of customer privacy.
Market Model for smart meter roll-out

The adopted business model for smart meter roll-out will play crucial role in any real business
activates. One can propose a number of different basic models and then a choice of their
combinations.
As an example three network business smart meters delivery models could be proposed as follows75:
1. Regulated Asset Ownership Model, where the DNO are responsible for the provision of the
meter, but the supplier is responsible for deployment strategy, installation and post
installation activities.
2. DNO-deployment Model, where the DNO are responsible for the provision of the smart
meter and the DNO also assumes responsibility for the deployment strategy, installation and
post installation activities for both gas and electricity smart meters.
3. Energy Networks Co-ordination Model, where the DNO are responsible for the provision of
the smart meter, and coordination between these bodies is achieved to install both gas and
electricity smart meters in a single visit to the extent possible.
74
75
Smart Meter Roll-out: Energy Network Business Market Model Definition & Evaluation Project, 2009,
www.bargina.com
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Other key issues concerning smart metering

Standard Meter Data Profiles76
The road map should define meter data in standard profiles that enable meter data to be available in
common profiles that will be needed by not only the utility company but also customers and the
devices they use to manage their energy consumption, such as thermostats and building automation
systems. Other potential clients exist inside and outside of the customer premises77.
Consumers will be better able to reduce energy consumption when they have easy access to usage
data. Different meter vendors report meter data in tables that are not uniform across all vendors. For
example, in the USA the reason for this is that ANSI C12.19, the relevant standard for this purpose, is
an extremely flexible revenue metering model. In effect, it allows such a wide range of options that
request for actionable information from a meter, such as usage in kilowatt hours, requires complex
programming to secure this information. ANSI C12.19 2008 has a mechanism by which table choices
can be described, termed Exchange Data Language (EDL). This can be used to constrain oft-utilized
information into a well known form.
Meter information that can be made available in common data tables will greatly reduce the time for
utilities and others requiring meter data to implement Smart Grid functions, such as demand
response and real-time usage information.
Privacy Issues in smart metering

Consumer protection rules also include provisions on customer information and privacy. There is
some tension between the development of markets and the right of customers to keep their
information private. To optimize the use of smart grid technology, of course, such data as patterns
and purposes of customer use of electricity is essential information for both the customer and any
entity providing him/her with smart grid services.
These rules provide opportunities to increase the flow of information to customers and also create a
fair marketplace for consumers and suppliers. As such, they can play a key role in customer
education and key elements of a fair smart grid. In some countries for example, it is required that
bills be unbundled and made more transparent by noting which costs are attributable to generation,
transmission and distribution activity. This will assist customers to better understand their service
costs. Consumer protection rules typically include mandatory disclosure statements and
requirements on contracts and the contents of bills. These are clearly important aspects of a
competitive services market and can foster the development of the smart grid. Customers should be
able to understand what they are committing to in their contracts, what charges are incurred and
what their rates will be. Required disclosure statements usually must contain the terms and
conditions for service and pricing, including when a customer can switch to another provider. Some
countries may require that the terms and conditions of variable pricing, when applicable, must be
stated. States have varying rules on the time period a customer has to cancel a contract.
Directive 98/46/EC on the protection of individuals with regard to the processing of personal data
defines that Member States shall protect the right to privacy with respect to the processing of
personal data.
76
77
Tasks include mapping utility requirements expressed via AEIC Guidelines v2.0 to device classes by January
2010, expressing AEIC Guidelines v2.0 in terms of one or more additional device classes by May 2010, and
completing AEIC Guidelines v2.0 by December 2009. Other tasks include socializing the existence of additional
tables within ANSI C12.21-2006 and C12.22-2008 and socializing the existence and application of existing
default sets, and the definition of new default sets, device classes, and profiles via Web conferences, all by
fourth quarter 2010.
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In some states specific data protection regulation for the energy sector is in place or are planned.
The privacy implications of the Smart Metering are not yet fully understood and a number of
different analysis on this issue are being carried out78.
The major benefit provided by the Smart Grid, i.e. the ability to get richer data to and from customer
meters and other electric devices, is also its Achilles' heel from a privacy viewpoint. Privacy advocates
have raised serious concerns about the type and amount of billing and usage information flowing
through the various entities of the Smart Grid, the dangers posed by data aggregation of what was
considered to be anonymised data, and the privacy implications of frequent meter readings that
could provide a detailed time-line of activities occurring inside the home.
Pricing
Without appropriate pricing, much of the demand-side value of smart grid technology will be lost.
Indeed, the case for making smart grid investments will be weakened considerably. Since the only
price signal a customer receives is an end-of -the-month bill, there are few if any meaningful price
signals to direct customers and efficient service providers to where savings and efficiency gains can
be made. Pricing that does not reflect the reality of usage patterns generally distorts actual prices
and has the net effect of causing customers to miss opportunities for end use efficiency gains.
Similarly, common regulatory tools like rate stability plans, average-cost pricing, cost socialization,
and normalization of rates contribute mightily to both market and energy inefficiency, and render
investment in smart grid technology less attractive. It is clear, however, why regulators have
implemented these measures. Rate shocks bring social costs and often political turmoil. Stability
and reliability of service is essential to consumers and the public at large. Similarly, socializing costs
rather than trying to identify cost causers, and using average-cost pricing, is less complex and usually
less controversial than trying to design more accurate and appropriate price signals. While such
practices are understandable, they serve as barriers to the adoption and deployment of smart grid
technology that rely on smart signals to help justify the cost of investing in it. That being said, if
traditional average-cost pricing is deployed based on actual load profile, then customers in such a
regime could still sell demand reduction into day-ahead markets. Time-of-use (TOU), real-time and
day-ahead pricing should be enabled to promote market efficiency generally and smart grid
deployment specifically. To the most reasonable extent possible, costs should be allocated to those
customers who incur them. It may be posited that markets for key smart grid components like smart
chips in appliances and machines, micro-or distributed generation, microgrids, home area networks
(HANs) and smart appliances, will never be realized unless consumers can receive and react to
meaningful price signals. To alleviate these gaps in the flow of information, states like Connecticut,
California, Illinois, New York and Pennsylvania have mandated TOU and/or real-time pricing. Others,
such as Texas and Colorado have not, although Texas has approved major investments in the
metering technology that will enable the use of such.
There are two critical aspects of pricing: the signals to the customer and the signals to the providers.
Achieving the demand-side benefits attainable from deploying smart grid technology is largely, if not
totally, dependent upon getting the prices right. For customers, prices must reflect real-time energy
prices and must be conveyed on an actionable basis. This can be accomplished either through realtime conveyance of price information or through agreed-upon central controls of use of energy on
the customers premises. Agreement on central control of appliances would include the appropriate
price reductions for the customer reflecting his willingness to suspend consumption under
established protocols. Such agreement would also reflect incentives for appropriate peak shaving
and time shifting of load. For providers, both utilities and alternative suppliers, the pricing in the
market should offer opportunities for earning that are one-dimensionally linked to sales of energy.
For utilities, be they load-serving entities or not, profits ought to be linked to provided energy
78
Results of an analysis on this subject and the proposed next steps are included in e.g. NIST Interagency
Report (NISTIR 7628).
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service, not simply kWh sales. Alternative suppliers in open retail access markets should be provided
appropriate wholesale market prices that permit them to serve as both energy suppliers and load
aggregators. That way they have an incentive to provide customers with energy on the most efficient
basis rather than merely providing energy to be consumed. There has been push back on real-time
pricing from some who prefer to retain current pricing arrangements. Some of this push back stems
from fears that real-time pricing will raise prices and that residential and other small customers will
expend much effort trying to save small amounts of money. This push back cannot be ignored but
must be addressed to allow for both optimal system efficiency and for customers to be empowered
to make informed electricity consumption choices. It is important, therefore, that switching to realtime pricing be done on a phased-in basis so that: (1) customers can learn to navigate it (assuming
they wish to achieve the efficiency gains and price breaks offered); (2) customers are offered the
alternative of surrendering some control of load to an aggregator or load dispatcher of some sort;
and (3) implementation be accompanied by a massive effort to fully educate customers.
There is an alternative between maintaining the status quo and moving all customers to real-time
pricing, although it is not ideal. The alternative is requiring the switch to be made first by customers
whose load characteristics make them most likely to benefit from real-time pricing and smart meters.
The customer may be, for example, a residential customer with a plug-in hybrid automobile. This
selective phase-in approach might allow some benefits to be captured while offering changeresistant customers some solace. However, there would not be much of a gain from an economic
efficiency standpoint. Thus, while it is not recommended, it is a political fallback position.
Meters and cost recovery

New technology demands innovation and flexibility. The traditional utility meter could last one or
more generations of customers after installation. Calculation of cost recovery of prudent meter
investments was relatively straightforward. Comparatively, the physical life of new advanced meter
infrastructure (AMI) is far less certain. State commissions have sought to strike a balance between
preventing undue risk while not arbitrarily denying utilities the ability to recover costs. Texas, for
example, has instituted recovery charges for new meter installations, effectively socializing the cost
of AMI. Socializing the cost of AMI can speed deployment, but it can also dilute price signals. It can
also have the effect of allocating the costs of new technology to a subgroup of customers who may
not want it. In addition, the advantages of smart meter infrastructure must be weighed with the
consequences of delaying its rollout. Texas, in the face of customer concerns about the accuracy of
new meters, was asked to delay or postpone their rollout. The Public Utility Commission of Texas
(PUCT) chose to allow deployment while allowing for testing of the new meters by an independent
third party. New Mexico, in contrast, has rejected a meter replacement surcharge. It should be noted
that the accuracy of smart meters should prove to be a growing concern as states achieve more
meter penetration. California, for example, is also grappling with the need to test meters (see the
below discussion of allegations that PG&Es smart meters are inaccurate). This further attests to the
unpredictability of the shelf life of new technologies. One counterbalance may be for more states to
adopt dispute resolution rules, such as those currently in Florida. States may wish to consider
allowing consumers to buy advanced meters from third parties to a standard specification. Ensuring
that advanced meters or other devices are priced properly, however, can be difficult. As discussed
below, in Pennsylvania, consumers who elect to pay for early installation of smart meters face a wide
variation in meter prices. Some communities pay for the meters by combining them with a demandresponse program that generates sufficient savings to pay for the meter. Similarly, utilities in
competitive markets may find that competitive suppliers will bundle cost-savings services with
advanced meters.
Net metering and interconnection

Net metering and interconnection policies that support energy efficiency and alternative generation
are a key component of the smart grid. Of the states surveyed, the majority had state-wide net
metering and interconnection policies in place. In the USA in some states e.g. in Pennsylvania net
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metering rules allow for both physical and virtual net metering and are particularly progressive. In
Texas, however, is an outlier, in that while it allows for voluntary net metering, it does not have a
state-wide net metering policy. The lack of net metering policies in Texas has been attributed to a bill
which required net metering but failed to define it adequately.
Stakeholder collaboration and advocacy

A smart grid, like cell phones or the Internet, is socially transformational technology and will change
the human experience with electricity. The challenge is to integrate automation systems within and
between the electricity delivery infrastructure, distributed resources and end-use systems. This will
require new solutions for existing interfaces that embrace best practices and interoperability across
all sectors of the economy. Greater interaction among all stakeholders is a necessary characteristic
of a smart grid. This was, in part, justified because all affected customers were in competitive
markets. Stakeholder collaboration and stakeholder advocacy have a large role to play in the
development of a smarter grid.
Cost recovery for Smart Grid investments

The consideration of how to allow for recovering the costs of smart grid investment should be driven
by thinking through such issues as risk allocation, risk management, appropriate incentives and
identifying beneficiaries. Based on those considerations, it is recommended that costs associated
with smart grid investments before the meter should be recovered as fixed costs. The costs of the
meter, customer premises equipment and beyond ought to be recovered on a variable cost (perhaps
energy cost) basis. The rationale for this recommendation on the supply-side is that most of the
benefits from smart grid investments on the supply side are systemic, rather than customer specific
in nature. Those supply-side benefits relate to service quality, administrative functioning,
maintenance and other activities for which it is virtually impossible to identify specific beneficiaries.
The value of those activities is not necessarily related to the consumption of energy. Moreover, they
have natural monopoly characteristics that customer premises equipment, including the meter, do
not. Customer premises equipment is, by definition, beneficiary specific. The value of it is directly
linked to energy consumption or savings. Also, this value is not inextricably linked to the monopoly,
since the meters and equipment can be provided and maintained by any supplier. In fact, making the
costs of such equipment recoverable as part of the variable charge allows them to be detached from
the monopoly utility and opened to competitive providers, should policymakers so decide. Finally,
allowing recovery on a variable cost basis would enable more technological innovation and
adaptation, as well as more customer exercise of discretion, and enable customers to better control
their costs and decide whether to avail themselves to new programs and services. In this context, it is
also recommended that policymakers revisit the issue of who owns and controls the meter,
particularly in states with retail competition. For the most part, the decisions to assign responsibility
for metering to utilities were made in the static context of dumb meters that merely kept track of
consumption. In the smart grid context, meters post real-time prices and communicate with
appliances, suppliers and the wires' delivery system. Meter ownership is also worth revisiting in the
context of different approaches toward managing technology and associated risks by utilities and
alternative suppliers.
Risk allocation regarding smart grid deployment

The risks associated with the deployment of smart grid assets should be allocated on a symmetrical
basis on three dimensions. First, risk should be allocated in a way that is symmetrical to the gains to
be derived. Thus, low risk should mean less potential for gain, while high risk should have a greater
potential for gain. Second, a balance must be struck between the socialization and privatization of
risk. It is not sustainable to privatize gains while socializing risk. Conversely, it is not sustainable to
privatize risks and socialize gains. The third dimension, closely related to the second, is that risks
should be borne by the party in the best position to manage them. Investors in technology are the
parties best positioned to control outcomes. They should stand to gain where assets are well
managed and should shoulder the risk of loss for poorly managed assets. Passing on costs to
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customers by regulatory rather than market mechanisms on a guaranteed rather than earned
cost recovery basis is ill advised. Guaranteed cost recovery places risk on customers, who are less
well positioned to control outcomes. It also provides the investor with little incentive to manage well
and to exercise appropriate business prudence. In a monopoly setting, regulators may need to
replicate the symmetry found in unregulated markets. For example, regulators in a monopoly setting
may come to believe that a particular technology investment is high risk. The subject regulated utility
may be unwilling to make the investment under their existing rate of return. In that case regulators
might consider differentiating the rate of return for those investments from that permitted for other
types of assets. In that way, the risk reward symmetry is established while continuing to place the
burden of management risk on the party best positioned to manage it. Ownership of and Access to
Data All customer-specific data belongs to the customer, who should have absolute and sole right to
it and to disclose or not disclose it as he or she sees fit. Aggregate system data, however, absent
some very compelling circumstances, should be considered public information, which should be
readily available to all who might seek to use it. Access to information is critical for electricity
markets to work efficiently. In competitive markets, information symmetry for competitors is almost
as essential to maintain the requisite equilibrium for the market to function. As well, consumers have
a right to expect customer-specific data be treated as confidential and private. Balancing between
those two objectivesprotecting privacy and maintaining equitable access to data for all
competitorsis where public policy needs to be. Fortunately, there is a readily available policy
option that successfully balances these somewhat conflicting objectives. The recommended policy is
that all customer-specific information belongs exclusively to the customer. It should not be used by
any other party in possession of that information for any purpose not expressly consented to by the
customer. Nor can that information be withheld from either the customer or any party to whom the
customer wants it to be provided. Under such policy parameters, no competitor can use or withhold
the data for his own commercial advantage. Similarly no customer can be deprived of the
opportunity to use the data for his own advantage System information that is not customer specific,
absent some compelling circumstances, should be readily available to all who desire to see it. Thus
no market participants could be denied symmetrical access to data possessed by other competitors
in the marketplace.
Universal installation of smart meters

Ultimately smart meters should be installed on a universal basis. There has been some push back on
universal installation because small consumers are likely to get less benefit due to their lower
consumption, relatively inelastic demand and often flat load curves. The problem with
conceding that objection, however, is that allowing some customers to retain dumb meters will
forego many of the benefits of new technology. Unless all customers are using smart meters, supply
or system-wide (supply-side) benefits, such as meter reading, early identification of service problems,
enhanced reliability and ease of connection and disconnection, will be partially lost. Some of the
scale economies associated with switching out all dumb meters will also be lost. It should be
noted, however, that if the meter costs were variable rather than fixed costs, as recommended
above, small customers would pay a lesser share of the costs than they do at present. Once the
meters are installed, of course, both utilities and entrepreneurial third parties can offer customers
services that smart meters enable.
The key distinction between smart-meter types is determined by their communication i.e. whether
there is any with the energy supplier, whether this is one-way or two-way and the data-storage
capability of the meter. The combination of these features determines the extent to which the
metering system can help customers reduce their energy usage and minimise carbon emissions.
Information that smart meters can display includes:
Electricity and Gas consumption and cost.
Greenhouse Gas emissions.
Historical consumption data for comparison.
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Current tariff and demand via colour LED indicators.
There are many options related to the communications between the meter and the data servers of
the meter operator. The Appendix to ESM report describes some of the main design choices, relating
to79:
1. Meter configuration options.
2. Network topology.
3. WAN options.
4. Wireless Communication.
Specifically enumerated customer empowerment

Smart grid is only as valuable as what it enables customers to do. Accordingly, it is recommended
that laws or regulations explicitly state what customers are entitled to if they are obliged to pay for
the installation of the enabling technology. The elements of empowerment should, at a minimum,
include the following:
1. Right to confidential treatment of customer specific data;
2. Right to customer ownership of, and control of access to, near real-time information and
data specific to him/her;
3. Right to a portfolio of supply options (e.g., green portfolio) in monopoly markets and
unfettered consumer choice in open retail markets;
4. Right to receive real-time price information on a timely basis that enables response;
5. Right to choose to have central dispatch of customer premises equipment (e.g., appliance
control) subject to agreed-upon protocols with appropriate pricing;
6. Right to install equipment, either individually or collectively, with other customers, to
improve electric service quality (e.g., microgrids) as long as the installation has no adverse
effects on the rest of the system;
7. Right to have net metering and dynamic market pricing for distributed generation;
8. Right to subscribe to aggregation of demand for purposes of demand-side bidding;
9. Right to select his/her meter and post-meter devices, as long as they are in conformity with
applicable standards;
10. Right to avoid exposure to asymmetrical allocation of risk and reward associated with the
installation of smart grid assets;
11. Right to choose and invest in the desired level of power quality.
Smart metering related services

Development of smart metering is a trigger for other related products or services e.g. providing
variable tariffs, demand response programmes, additional information on Internet portals or inhouse displays, direct load and consumption control services, metering data used for energy audit
programmes and energy saving advice for households.
Smart metering offers a wide variety of services to both the consumer and operator. Table 4 shows
some of the services that have been, or are being considered across the MS. Variable tariffs have
been introduced in 19 MS and are either in test phase or being planned in the majority of the
remaining states80.
79
80
ESMA
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Table 4. Some of the services that have been, or are being considered across the MS
Detailed bill packages listing actual consumption and pricing information in addition to historical
usage profile
Real time monitoring of energy consumption via In Home Displays or similar devices
Energy supplier / distributer / sales company providing online access to customer energy usage
Third party services (e.g. web based tools that access and analyse customers meter data)
Variable Tariffs based on Time of Use, Peak load etc
Direct Fiscal incentives (e.g. rewards for reducing overall energy consumption)
Access to energy efficiency information (e.g. brochures, leaflets, websites)
All such services, existing or planned, should be identified when preparing a roadmap. If necessary
their introduction shall be proposed.
Costs and benefits of smart metering allocation

Costs, energy savings and data security as controversies: The introduction of smart metering hardly
happens without controversies, as was shown by the example of the Netherlands. The most
controversial issues are related to the costs of the investment, followed by concerns about actual
energy savings and questions related to data security and privacy.
According to the ESD81, MS shall repeal or amend legislation that impends or restricts the use of
financial instruments for energy savings in the market for energy services. How this legislation should
be upgraded is up to the MS. By exchanging views and exploring the different approaches in the
various MS, steps will be taken to identify, analyse and address the barriers. The ESD also permits the
introduction of funds for energy efficiency. Where MS take up this option there will be value in
exchanging information about the operation and impact of such instruments. Rather than giving a
thorough evaluation of fiscal policies, work within this topic aims to provide an analysis of those
elements relevant to improving energy efficiency. The aim is to make an overview of the fiscal
instruments that help to increase energy efficiency and reduce energy consumption. The overview
would help in understanding the overall context in which specific funds and efficient tariffs could be
used to promote energy efficiency. It would also form the basis for the energy efficiency policy
makers to gain a broader understanding of the macroeconomic issues that affect energy efficiency,
and hopefully strengthen the links between the energy and finance ministries in this area. In two
working groups ( the use of fiscal policy for the promotion of energy efficiency was explored and the
funds and funding mechanisms (F&FM) applied in the MS was investigated, to identify both strong
and weak aspects of the various policies used and to provide some case study examples82.
Identification of national interests

No doubts that development of smart grids, and specifically roll-out of smart metering is of EU
importance. However it is useful to identify national goals which could accelerate the development
process by articulating additional incentives. Such an approach could add new smart metering
advocates showing interest in participating in the smart metering market by providing related goods
and services.
In the interest of MS lies the ability to be rather an active partner in the market than to play a role of
passive importer of these highly innovative products.
81
82
CA ESD, Executive Summary Report, 2010, http://www.esd-ca.eu/Reports/Executive-Summary-Reports
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To illustrate this issue one may provide the possible contribution of Austria in the area of smart grids
(see also fig. 12:
an industry with high technology competence and know how, shown by products and
innovations,
innovative grid operators and electricity suppliers,
complementary and active R&D institutions,
supporting R&D environment.
In order to accomplished the goals a national action plan e.g. in the form of a roadmap should be
adopted at the national level.
Fig. 12 National Technology Platform Smart Grid Austria

The National Technology Platform Smart Grids Austria is a consortium of significant Austrian
stakeholders in the area of electrical energy supply aims to act as THE national strategic cooperation
partner and as The national coordination platform for smart electricity grids aims to support the
creation of the right framework conditions to show competence through international visible lighthouse projects.
Smart grids strategic research agenda

The purpose of the Smart Grids SRA can be summarized by the following discrete goals83:
83
Ensuring that Europes electricity networks develop in a way that enhances Europes
competitive position without compromising environmental objectives or the commitment to
sustainability.
Capturing the benefits of collaboration and co-operation to address challenges that are
common across Member States.
Encouragement of imaginative solutions that may require community-wide adoption to be

successful, including new approaches to energy efficiency and demand side participation.
Building on previous RD&D thereby ensuring maximum benefit and elimination of

duplication.
Fully utilising current infrastructure to ensure that the most efficient use is made of existing
assets that are not age expired, thereby delivering innovative and competitive solutions for
European customers.
Smart Platform Technology Vision.
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Providing a clear framework, goals and objectives for the research community and all
stakeholders to focus on.
Generating the momentum and support necessary from all stakeholders to convert good
ideas to adopted products and solutions through catalyst projects, demonstration projects,
and knowledge transfer.
When preparing SM road map these objectives should be incorporated and harmonised with
national research programs. In addition conditions and incentives for encouraging researches to
participate in EU wide programs e.g. 7 FP should be establish by governments.
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Structure of the roadmap

This chapter summarises actions highlighted in this roadmap, and sorts them into categories to
indicate the stakeholder with the lead responsibility.
For all main stakeholders main objectives were specified and then the stakeholders to accomplish
them were loaded with a certain amount of action to be considered and undertaken when necessary.
Each list of action comprises a range of recommendations, which are listed in each section. The
milestone dates are only a proposal and will have to be refined over time according to national
circumstances. It is important to note that collaboration among categories will be important.
Identification of starting point

Effective starting points for analysis include sound national baseline data on current energy supply by
fuel type, consumption by end-use sector, energy costs and conversion efficiency. For more detailed
analyses, national economic and demographic models can be used to help forecast population and
market growth that provide the basis for estimating future energy requirements.
Prerequisites to smart metering (grid)

To render successfully the smart meter roll-out one must84:
Identify and achieve an industry consensus on the key RD&D challenges.
Establish a level of co-operation and collaboration between academia, manufacturers,
network companies and their customers across Europe to meet the challenges in the most
effective ways.
Achieve a consensus view on the development path for Europes networks and create an
RD&D research agenda as a roadmap for the overall project.
Set challenging but achievable targets to deliver re al solutions for widespread
implementation.
These will utilize existing technology in new applications and also develop new plant and
equipment to fill identified gaps and create new opportunities for the EU and beyond.
Requirements must be mature

Requirements that lay out the functions and applications of the Smart Grid are foundational to the
Smart Metering. Requirements define what the Smart Grid is and does. The following are some of
the key requirements destinations:
Industry policies and rules of governance are well developed, mature, and can be consistently
applied.
Requirements are well-developed by domain experts and well documented following mature
systems-engineering principles.
Requirements define support for applications and are well developed enough to support their
management and cyber security as well.
Well-developed standards are in place

Standards are critical to enabling interoperable systems and components. Mature, robust standards
are the foundation of mature markets for the millions of components that will have a role in the
future Smart Grid. Standards enable innovation where components may be constructed by
thousands of companies. They also enable consistency in systems management and maintenance
over the life-cycles of components. Metrics can be further developed around the following:
84
Open stable and mature industry-level standards developed in consensus processes from
standards development organizations (SDOs) are available.
Smart Platform Technology Vision
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Standards are integrated and harmonized with complementing standards across the utility
enterprise through the use of an industry architecture that documents key points of
interoperability and interfaces.
The standards were thoroughly evaluated both from focused technical review as well as
through the development of reference designs and implementations that were subsequently
tested rigorously.
Standards are robust and can be extended as necessary to meet future requirements and
applications as needs arise.
There is a mechanism in place such as a user group to support and evolve the definition of
the standard as the requirements of the stakeholders evolve.
Standards conformance testing suites are thorough and are complemented with
interoperability and performance testing suites.
Mature architectures guide development

Architectures define how systems and components interact. Architectures assist in technical and
management governance and direct ongoing development work. Architectural concepts integrate
technical and non technical features and components of systems. Each domain within the Smart Grid
may have its own architecture or architectures.
The architectures of the Smart Grid must be well defined, well documented and robust. Desired
attributes of architectures for the Smart Grid include:
Architecture artefacts include well-defined interfaces across industries external to the utility
industry.
Modern system-modelling tools and techniques are used to manage the documentation and
complexity of the system.
Architectural interfaces are well-defined. Each architectural element must be appropriate for
the applications which reside within it. The architectures must support development of
massively scaled, well-managed and secure networks with life-spans of 30 years or more.
The infrastructure supports third party products that are interoperable and can be integrated
into the management and cyber security infrastructures.
Support Infrastructure must be ready

Each application, technology, and architecture requires its own support infrastructure. Not only must
each be well defined, documented and implemented, but the necessary economic and societal
structures must be in place to support their use. These include:
Up-to-date system-modelling tools to manage the documentation and complexity of the

system.
Multiple vendors are able to produce interoperable components.
Workforces are educated and can support all aspects of the lifecycle of Smart Grid systems.
Educational resources are in place to support workforce development and renewal9.
Well defined specification and requirements documents for procurement of smart grid
components.
Smart grid networking

The Smart Grid is a network of networks. That is, many networks with various ownership and
management boundaries are interconnected to provide end to end services between stakeholders
and in and among intelligent electronic devices (IEDs).
Additional requirements for the information network are as follows:
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management functionality for network status monitoring, fault detection, isolation, and
recovery,
secure protocols to protect Smart Grid information in transit and authenticate infrastructure
components,
cyber security countermeasures,
addressing capability to entities in the network and devices attached to it,
routing capability to all network end points,
quality of service support for a wide range of applications with different latency and loss
requirements.
Mature requirements
Requirements that drive and specify the functions and how they are applied are foundational to the
realization of the Smart Grid. Requirements define what the Smart Grid is and does. The following
are some of the key requirements:
Industry policies and rules of governance are well-developed, mature, and can be consistently
applied.
Requirements are well-developed by domain experts and well-documented following mature

systems-engineering principles.
Requirements define support for applications and are well-developed enough to support
their management and cyber security as well.
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Actions and Milestones

Actions led by governments
Key findings:
The underlying role of government actors is to remove deployment barriers; ensure the smart grid
related industries and the wider electricity sector work together effectively; and to encourage private
sector investment alongside increased public investment.
Under the right conditions emerging economies can conceivably leap frog directly to smart electricity
infrastructure.85
Main stakeholders:
1. National, regional and local levels of government.
2. Energy state agencies implementing energy and environmental policy.
Goals:
1. Recognise that smart grid deployments should reflect regional needs and conditions a
one size fits all does not apply to the deployment of smart grids.
2. Convene a broad set of stakeholders, including, the international community, groups
addressing similar issues e.g. RES communities, vendors and researchers, to address smart
metering issues.
3. Remove deployment barriers for smart metering, mainly existing in law.
4. Create a stable environment for smart metering development, including incentives where
necessary.
5. Ensure the smart metering related industries and the wider electricity sector work together
effectively.
6. Encourage private sector investment alongside increased public investment.
7. Development of architecture governance and policy integration processes86.
Milestones:
To be settled.
Gaps and barriers:

1. Lack of political will to enter the path of smart metering (smart grid).
2. Insufficient awareness of importance of smart metering (smart grid) for energy sector
development.
3. There are jurisdictions in which metering services are highly unbundled.
4. Both costs and benefits of smart metering systems are highly dependent upon national and
local circumstances and upon specific characteristics of final customer segments.
85

This task should also include consistent approaches to energy industry business models where they are
critical to the development of Smart Grid components and equipment such as revenue meters, and consumer
owned equipment.
86
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Action items:
1. Undertake steps to introduce in law provisions creating friendly surroundings around smart
metering (at least eliminating legislative barriers).
2. Recognise that smart grid deployments should reflect regional needs and conditions a
one size fits all does not apply to the deployment of smart grids.87
3. Invest in research and demonstration that provide insights into behavioural aspects of
electricity use.
4.
87
Collaborate with public and private sector stakeholders to determine regulatory and market
solutions that can mobilise private sector investment in the electricity system.
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Priorities and milestones timelines:

Priorities
Governments and regulators should consider regulatory and
commercial models that allow the DSOs access to the smart
metering system.
A proper evaluation of the costs and benefits of introducing smart
metering should be done per country and per final customer
segment.
Milestones timelines
Issues to be identified before starting

1. Making a review of law concerning smart metering.
2. Identification of governmental structures being involved or which should be involved in
smart metering development.
3. Selecting staff capable of taking part in preparation of the road map and then in its
implementation phase.
Actions led by energy regulators

Key findings:
Current regulatory and market systems can be a barrier to smart grids demonstration and
deployment. Regulatory and market models such as those addressing system investment, prices
and customer participation must evolve as technologies offer new options over the course of longterm incremental smart grid deployment.88
Global smart grid technology standards are needed to optimise and accelerate technology
development and deployment while reducing costs for all stakeholders.
Not everything must be regulated but regulation is needed to create the right environment for a
market to be developed.
The cost and risks incurred cannot all be covered by the market or existing recovery mechanisms.
Ideas for adding smartness to the regulatory framework are as follows:89
Internalise positive externalities.
Foster collaboration projects among stakeholders.
Tariff of use reallocate network tariffs among stakeholders.
Performance based ratemaking (guaranteed/overall standards).
Smart Grids factor in regulation formula (direct effect on DSOs revenues.)
Load revenues charge customers for actual load (capacity tariff /kW).
Main stakeholders:
1. National energy regulators.
2. National telecommunication regulators.
Goals:
1. Identify regulatory impediments to achieving the goals of smart metering roll-out. Review
the current regulatory/use case conflicts to determine areas where changes are needed;
advise other stakeholders of the identified obstacles and develop options for solutions.
88
89
Euroelctric
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2. Reaching regulation system necessary to support smart metering (grids) and a range of
environmental technology deployments such as wind, solar and electric vehicles.
3.
Incentivise investments in new technologies with positive externalities.
4. Open new market opportunities for existing suppliers and new players.
5. Establishment of demonstration and deployment system to ensure customers benefit from
smart grids. Empower customers to make use of new possibilities.
6. Awareness and consensus on the value of smart grids between energy utilities and regulators
having a key role to justify investments.
7. Contribution to define the right business model enabling roll-out of smart meters.
8. Consideration of changes in regulation to enable new business models and complex
technologies.
9. Make available pricing and market information.
Milestones:
To be settled.
Gaps and barriers:

1. Regulation system is not smart grid (metering) oriented.
2. Lack of interest or insufficient power of energy regulators to carry out smart metering
friendly changes in regulation system.
3. A threat against increasing costs of electricity due to smart metering investment costs.
4. Weak interest from the energy sector in engaging in smart metering projects without
guaranteed full costs compensation.
5.
Lack of stringed enough requirements to access to metering data.
6. Risk of stranded assets.

7. Over ambition or wrongly planned implementation schedule.
8. Lack of reliable cost/benefits analysis or presence of analysis not entrusted by all
stakeholders.
9. Lack of feedback from the first implementation.
10. No access or highly asymmetrical access to energy data for different energy market actors.
Action items:
1. Plan for evolution in regulation along with technology development new technologies will
offer new regulatory options.90
2. Support the development of smart grids necessary to support smart metering and a range of
environmental technology deployments such as wind, solar and electric vehicles.
3. Regulators must engage in system demonstration and deployment to ensure customers
benefit from smart grids
4. Building awareness and seeking consensus on the value of smart grids must be a priority with
energy utilities and regulators having a key role to justify investments.
90
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Priorities
It is important to identify an optimum detailing level for the
Regulation: poor, overly complex and unpredictable regulation
may have negative impacts on the implementation of smart
metering and reduce the expected benefits.
Implementation of minimum functional requirements, which are
most relevant for the given country (-ies), would secure sufficient
functionality of the Smart Meters and reduce potential technical
issues and business risks.
The energy saving can be improved by providing the final customer
(and other actors) with access to metered data giving a
consumption feedback and supporting development of new
products and services.
The functional requirements should be coordinated with other
relevant authorities, for example, Office of Weights and Measures,
Data Inspectorate (data security and privacy issues) etc.
Risk of stranded assets can be reduced by gradual implementation,
starting with new build installations.
The implementation schedule should not create organisational and
logistical bottlenecks due to lack of equipment or skilled
manpower utilities.
The cost/benefits analysis should consider the possibility of future
changes in the national regulation regime, which may increase or
decrease the value of both core and additional functionalities.
After the first implementation, new and improved requirements
can be introduced within a reasonable period of time. This has to
be considered during initial design of the system with regard to
flexibility, compatibility, standardisation and modularity.
Standardisation:
Regulators should ensure that smart metering is introduced in such
a way that it supports a market for new ESCO products.
Regulators should ensure that there are no financial, commercial,
legal or regulatory barriers to customers having access to real time
data from utility meters measuring their supply.
Regulators should require that all utilities introducing smart
metering include a statement in their proposals on how they will
use the smart metering to enable and support services that
improve energy efficiency and help to save energy.
Regulators should consider if it is necessary to create an external
independent data acquisition company for reduction of
operational reading costs, rather than using a distribution system
operator where energy retailers must share the system. Such
systems should provide appropriate security for both the energy
retailers and the customers.
Issues to be identified before starting

1. Making a review of energy and telecommunication law, rules and practice concerning smart
metering.
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Actions led by energy national standardization bodies

Key findings:
Different international and91 national standardisation bodies are working extensively to develop
standards for smart grid technology and equipment. There are two areas regarding meters and data
systems that do require specific mention. The first is that smart meters should be able to
communicate with both customer premises equipment and the local utility. This ensures that specific
meter choices do not automatically preclude the achievement of both supply and demand benefits.
Meters also ought to be transferable from one supplier to another, if the customer in a retail
competition jurisdiction chooses to switch suppliers. While further technological development may
well be required to achieve these objectives, it is critical that meters serve as instruments of
customer enablement and not be used to limit a customers discretion92.
The Smart Grid will ultimately require hundreds of standards93. The priority areas are:
Demand Response and Consumer Energy Efficiency.
Wide Area Situational Awareness.
Electric Storage.
Electric Transportation.
Advanced Metering Infrastructure.
Distribution Grid Management.
Cyber Security.
Network Communications.
Main stakeholders:
1. National standardisation bodies working in close co-operation with international
standardisation bodies.
2. International standardisation organisations (as initiating and working bodies in preparation of
international standards).
3. Stakeholders providing experts for standardisation works (technical committees).
Goals:
1. Establishment of complete framework of standards required for smart metering
implementation.
2. Coercion of at least a subset of used standards into cleanly nested complexity levels with
common semantics for each shared subset.
3. Determining how to infuse a common set of cross-cutting requirements into the standards to
94
facilitate exchange of confidential and authentic information across standards .
4. Open access protocol needed for timely access to metering information by the premises
management system.
91
See websites of e.g. National Institute of Standards and Technology (NIST) or International Electrotechnical
Commission (IEC).
92
93
In April 2009 NIST identified 16 initial standards for the Smart Grid for which it believed there was strong
stakeholder consensus. As a result of public comments on this list and subsequent analysis, this list has now
been expanded to 31 standards. An additional 46 standards were also identified as potentially applicable to the
Smart Grid.
94
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Milestones:
1. Continuous publishing international standards required in smart metering (smart grid)
development.
2. Fast adoption of international standards at national level.
Gaps and barriers:

1. Insufficient expertise and and/or institutional support for standardisation works.
2. Lack of consensus on technical solutions among main technology and equipment providers.
3. Lack of harmonisation of European technical standards, regulatory and commercial
frameworks.
Action items:
1. Engage stakeholders in a participatory public process to identify applicable standards and
requirements, gaps in currently available standards and priorities for additional
standardization activities95.
2. Develop standards in participation with industry and government stakeholders to ensure
interoperability of system components and reduce risk of technology obsolescence.96
3. Establish a standards panel forum to drive longer-term progress.
4. Develop and implement a framework for testing and certification.
95
96
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Priorities
Actions
Data standards should be expandable to allow inclusion of entities
such as those required to show environmental impact; such as
carbon equivalent (for example, kg CO2/kWh) of the energy
stream.
Physical and data standards should be agreed for local
communications with meters. These should enable non-utility
devices and systems to access meter data. Standards should allow
the control of what data can be made available by the meter and
access to the data.
There should be an agreement on common minimum functionality
and interoperability regarding provisioning of feedback from smart
metering systems.
As much as possible, the standards development should allow
freedom to innovate smart metering systems and feedback
techniques.
Issues to identified before starting

1. Making a review of standards concerning smart metering and identification of gaps in
standardisation.
2. Making a review of involvement of the national standardisation body in international
activities in this area.
3. Selecting staff capable of taking part in preparation of the road map.
4. Establishment of relevant technical commissions, task force groups etc. on smart metering
(smart grid) if necessary.
Actions led by the industry

Key findings:
1. Large-scale systems-based demonstration of mature and nearly mature smart grid
technology is urgently needed to determine solutions that can be deployed at full scale97.
2. Solutions that integrate smart grid technologies with existing electricity infrastructure is
essential.
3. The smartening of grids is already happening through incremental investments in
modernisation - it is not a one-time event.
4. The AMI systems now being implemented ensure an evolutionary path to the smart grid. The
costs associated with AMI rollout are simply too high to permit an overhaul of the installed
systems in preparation for an eventual transition to the smart grid.
Main stakeholders:
The SM related industry category includes the fundamental research community of universities,
technology and solution providers, government research centres and other institutions; meters and
other AMI components manufacturers; and developers of associated infrastructure.
97
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Goals:
1. Provide necessary technology, equipment and services securing cost effective and reliable
operation of smart metering.
2. Develop national capacity in industry providing products and services for smart metering.
3. Develop and strengthen national R&D capacity in SM.
Milestones:
To be settled.
Gaps and barriers:

1. Lack of advanced knowledge and matured innovative technologies on SM.
2. Weak interest from the industry unwilling or incapable to operate in SM area.
3. Lack of or insufficient priorities in national R&D programs on SM (smart grid).
4. Typical barriers in transformation of innovative technologies from R&D area to industry.
Action items:
1. Deliver full technology solutions to system operators through partnership with others in the
value chain to address concerns with technology system integration and long term post
installation support98

Priorities
Investors in smart metering systems should define which smart grid
features they want to support. Basic features include two-way
communication with end-customer devices and the possibility to
upgrade communication after the initial installation.
Designers of smart metering systems should design the ICT
architecture in such a way that it introduces no unnecessary barriers
for a future introduction of smart grid services.
Designers should choose a communication infrastructure for the
smart metering system that is based upon open standards, to
enable shared use of the communication infrastructure for services
for smart grids and for final customer energy management.
Designers of smart metering and smart grids system should pay
special attention to security, dependability and flexibility of the
system.
Smart meters should contain an interface to enable the data
contained in them to be communicated to other devices and
systems within the home.
This communication should be supported by the adoption of open
interface and data communications protocols. The smart metering
industry across Europe should agree a common approach to local
data exchange with utility meters.
The design of the WAN should allow for future growth in
communication performance requirements (such as data rates,
availability and speed of response) arising from the introduction of
new product offerings. For some services communication
availability and response time are much more critical than high data
rates and the impact of these on the final customer experience
98
Continue over 2010-20xx period.
Complete by 201x.
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should be considered at the design stage.

As much of the cost and risk of a smart metering over its lifetime are
related to WAN communication. It is recommended to pay special
attention to this when designing smart metering; again considering
the impact of future growth in communications.
The security of the system must be managed appropriately to
ensure that only approved parties can access the meter data and
that final customers and others cannot access data within the meter
that they are not approved to view.

1. Making a review of existing industrial capacity in smart metering.
2. Making a review of existing R&D capacity in smart metering.
Actions led by power system actors

Key findings:
The coordination of supply and demand is already of critical importance on the grid; tomorrow, with
the increase of distributed energy resources, this coordination becomes more critical.
No two Smart Grids will be the same, and each utility will need to consider its unique environment
and circumstances. Every program should consider the analysis of specific internal and external
factors. These include such things as:
Existing capabilities.
Specific business goals.
Regulatory/legislative environment.
Customer demographics.
The key role of power system actors is to enable physical power markets and the infrastructure
underpinning them to evolve in a manner that cost-effectively reduces the impact of variability and
increases the scale of SM development.
Smart metering is a mixed blessing for utilities - it can transform their business but it also promises to
reduce their volume of sold energy. It is crucial to show that improving energy efficiency and
customer feedback can benefit utilities and that utilities can have an important role in improving
energy efficiency.
In all metering services including meter provision, installation and maintenance activities become
regulated activities and so metering competition is limited.
Additional non-metering services could be managed through commercial contracts between the
third party and communications provider as all data transfer would be conducted through the meter
independent of the WAN device.
Main stakeholders:
This category includes transmission companies, system operators and independent electricity sector
regulators as established by governments.
Goals:
1. Bring about roll-out of smart meters as a essential element of the smart grids being
constructed.
2. Contribute to meeting goals of EU and national energy and environmental politics.
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3. Carry out successfully pilot projects in smart metering and prove customers benefits they
gain from SM.
4. Meet other benefits attributed to SM e.g. cost reduction, full integration of distributed
generation.
Milestones:
To be settled.
Gaps and barriers:

1. Difficulty in taking decision to switch to smart metering at the level of management of energy
company.
2. Difficulty to address confidentiality constraints with insufficient data transparency.
3. Risk of seeking isolated developments at EU and national levels that will be ineffective in
such complex value chains.
4. Risk of insufficient availability of skilled staff, particularly to achieve the development and
deployment of innovative technologies.
Action items:
1. Utilise flexibility and enhancements delivered by smart grids to evolve generation mix by
increasing use of variable generation to meet demand growth, decrease emissions and
decrease fuel security concerns (energy generators).
2. Demonstrate smart grids together with business models that share both benefits and costs
with customers in order to gain regulatory approval and customer support (TSO, DSO).
3. Lead education in collaboration with other stakeholders on the values of smart grids,
especially with respect to system reliability and security benefits (TSO, DSO).99

Priorities
Develop a summary of power reliability and quality characteristics
that affect price and availability (supply side) and desirability
(demand side).
Survey existing price communications and develop harmonized
specification
Build on existing work in financial energy markets and existing
demand response programs.
Develop a summary of information needs for various means of
customer access to metering and billing information.
Involve the final customer and marketing departments as early as
possible.
Begin with surveys and trials to identify the services that will be
well received by final customers and effective in reducing energy
consumption.
Design the marketing plan for mass-scale smart metering
introduction based on the results of the surveys and trials.
Minimize the inconvenience for final customers during the
installation phase and especially make sure that there are
sufficient properly trained staff to deal with customer queries and
complaints arising from the installation of smart meters (this
should include t he installers).
99
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Any plan for smart metering introduction should be designed

based on a profound cost-benefit analysis to avoid or diminish
potential negative financial impacts.
Improved ability to influence consumption patterns of the
households due to smart metering may lead to better load
management and overall energy reductions, but will also improve
distribution and retail operations.
DSOs, regulators and utilities should formulate a vision on the
transition towards smart grids, before they decide about
investments for smart metering are made. This vision should
indicate to what extent, which, where and when smart grids
services will be introduced to the final customers and in the power
grid.
TSOs, DSOs, regulators and utilities should consider which
functionality is needed for PEVs and other new power consuming
devices with a potentially high simultaneous peak demand. Time
varying prices may be the easiest way to avoid peak loads in the
grid.
Utility planners should be aware that the need for demand
response may be different in the future. Tight capacity balance,
more local generation or more wind power may increase the
benefit of demand response.
Implement multi-utility meter systems with expandable data
standard for each of the media used.
Design multi utility systems based on optimization of energy use.
This shall be planned together with the DSM concept. In particular
this is very important in systems with optional supply solutions.
For district heating companies, the first step is to assure basic
thermal metering requirement at thermal nodes and heat
substation. For District heating companies there is a need to
develop specifications for smart metering and identify
complimentary services that can be delivered with the smart
metering system.
Careful consideration should be given where multiple utilities are
displayed in the same location to ensuring that appropriate
environmental messages are conveyed; for example, gas and
electricity should show their equivalent carbon emissions.

1. Making a review of existing in energy companies capacity in smart metering.
Actions led by end-users

Key findings:
Smart metering may bring about substantial changes to the business model of energy retailers of
small-scale end-users both in terms of the type and also the scale of the services to be provided.
However, achieving the expected benefits that are attributed to smart metering largely depend on its
positive acceptance and correct understanding by end-users.
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In different models suppliers may retain an incentive to offer differentiated services to customers,
albeit this may be constrained by the standard meter specification and ability to utilise the
installation visit.
Main stakeholders:
1. End-users divided into suitable groups e.g. from households, services, SME, industry.
Goals:
1. Reach consumers understanding and broad acceptance of the reasons and benefits of smart
meter installation.
2. Attract end-users, especially represented by powerful commercial and customers
organisations, to active participation in smart metering pilot programs.
Milestones:
To be settled.
Gaps and barriers:

1. Reluctant attitude of end-users to smart metering because of a threat of rising energy costs.
2. Insufficient mobilisation of end-users, mostly due to lack of proved benefits of smart
metering provided by energy companies.
3. Lack of resources on the end-users side to be a partner in smart metering programs.
4. Dominating position of energy companies in smart metering programs.
Action items:
1. Develop understanding of electricity system reliability, quality, security and climate change
benefits of smart grids. Help develop regulatory and market solutions that share investment
costs and benefits with all consumers.100
2. Actively engage in developing system demonstrations and deployments in order to ensure
consumer contribution to and benefit from future electricity systems and markets.
3. Support the development of smart metering (smart grids) necessary to support a range of
environmental technology deployments such as wind, solar and electric vehicles
(environmental groups).

Recommendations
Integrity of meter data is critical, to avoid unwarranted
disconnections due to perceived lack of pre-payment. Security
compromises could have a large impact on the customer and could
cause legal repercussions.
Confidentiality (privacy) of customer metering data over the AMI
system, metering database, and billing database.
Any implementation of smart metering should be accompanied by
proper promotion activities directed at final consumers to explain
why a smart meter is beneficial, what functionalities it is to bring,
and how it can be used for their good (e.g. to lower their present
energy consumption and energy costs and improve their comfort).
Real time access to consumption data directly from the smart
meters to the Home Area Network (HAN) should be provided.
100
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Agree a communications protocol between the smart meter and

smart homes systems. This should be supported by the provision
of hardware bridges to provide a connection between smart meter
LANs and Smart home HANs if a common system is not used.
Ensure that approved agents can make use of the smart meter
communications link to pass data to smart homes devices. This
would require the negotiation of a commercial basis to cover the
cost of the communications service.
Ensure that smart metering data protocols make provision for
passing through messages relevant to smart homes applications.
When preparing for the roll out of smart meters, demand response
should be included in the cost benefit calculation
Relevant design features related to demand response should be
included in the meter requirements. These include the time
resolution of the metered values (days, hours, quarter hours or
minutes) and the feedback and communication possibilities.
The acceptability of the scheme to customers should be
considered and tested through field trials.
Smart meters, ICT and communication systems may increase
electricity demand. To be effective the energy savings realised by
final customers must outweigh this extra consumption. This
additional load should be accounted for in the energy saving
analysis of the field trial.
Include a control group and a period prior to commencing the
project, if possible.
Trace selection process.
Combine electricity consumption data with data, e.g. from
questionnaire or existing databases.
Involve a sociologist from the beginning of the planning, to check
that relevant social and cultural issues have been taken into
account in selecting participants and carrying out the trial.
Remember the Hawthorne effect and allow for it.
Involve a statistician from the beginning of the planning process.
Consider using statistical methods, e.g. regressions analyses to
document impact.
Consider keeping data as individual data, e.g. per household.
Look for sub-groups with high savings as a supplement to the
study of average impact.
Before introducing Smart Metering for reasons of energy saving, a
full energy analysis should be made of the system to be used. This
energy analysis should not only take into account the expected
increases in energy saving at the final customer side, but also the
increase in energy consumption through the deployment of the
smart metering system (including the stand-by consumption of the
ICT equipment)101.
Consumers need to be able to see instantaneously and
continuously what is happening to their consumption, without
having to switch on an optional in-home feedback device first.
Direct feedback promises to be more effective than indirect
feedback.
101
Smart Metering Guide Energy Saving and the Customer
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Feedback promises to be more effective when accompanied with

goal setting.
Historic feedback promises to be more effective than comparative
or normative feedback.
Direct displays in combination with better billing promises to be a
more preferred way of communication for consumers than
feedback through an indirect (delayed) personalized web page.
Internet promises to provide useful additional feedback through
incorporation of further analysis and advice on a longer term basis.

1. Making a review of organisations representing end-users interests e.g. commerce chambers,
local energy agencies, NGO willing to take part in smart metering projects.
2. Collecting publicly available data on final energy consumption and opinion and postulates of
customers addressed to energy sector.
International Collaboration
Key findings:
Roll-out of smart metering has a EU wide dimension and will contribute to achieving EU
environmental and energy goals. Building internal energy market and common spread of ITC
technologies in energy sector make it more acute to base national smart metering solutions on
standardised technologies. Cost effectiveness is also to be substantially improved in the international
co-operation process.
Main stakeholders:
1. Governments, regulatory authorities.
2. Academic and research bodies.
3. Energy sector enterprises.
4. Energy agencies.
5. NGOs.
Goals:
1. Promote best available solutions and harmonised technology used in smart metering across
EU.
2. Take advantage from international collaboration by common projects, participation in EU
wide programs, exchange of best practices, mobilising international financial resources etc.
3. Reduce costs of smart metering development by adopting standardised solutions and
avoiding wrong decisions.
Milestones:
To be settled.
Gaps and barriers:

1. Typical barriers encountered in international R&D co-operation.
2. Lack of criteria on selecting best available technologies and taking decisions not based on
long-term technology development scenarios.
3. Dominating market position of some entities hampering win-win co-operation.
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4. Weak interest of international financial sector in participating in smart metering projects.

5. Failure in demonstrating benefits of international co-operation in smart metering area.
Action items:
1. Identify problems and mobilise national resources capable of solving them in international
co-operation.
2. Create framework for effective international co-operation (law, financing etc.).

Priorities
Increase international RD&D collaboration, making best use of
national competencies.
Develop new mechanisms to encourage exchange of technology
and deployment best practice within the EU.
Assess and express the value of smart metering in economic
development, poverty alleviation, and efficient use of energy
resources.
Encourage multilateral development banks (MDBs) to target smart
metering as essential part of smart grid development.
Continue over 2010-2020
period.
period.
period.
period.

1. Selecting of national problems especially suited to be tackled in international co-operation.
2. Identification of national resources and capacities capable in taking part in international cooperation on smart metering related issues e.g. R&D bodies, regulatory authorities, agencies.
3. Review of possible opportunities of international collaboration within existing and planned
EU or bilateral programs.
Smart metering (grid) national platform

Smart grids deployment can be optimised only through the active collaboration of all stakeholders on
a regional and international basis.
It strongly recommended that in order to enable successful smart grid implementation at the
national level smart grid platform should be established. Such platform should embrace all main
stakeholders listed in chapter 4. An open question remains who should take the lead in such a
strongly diversified body representing occasionally quite different interests. A partner from the
energy sector is a natural choice as being supported by a powerful organisation with sufficient
expertise and financing resources. If so special precautions shall be taken so that a balance between
interest of different parties is kept. Moreover, energy sector leadership may be decipher by endusers as an attempt to secure profits in emerging market of smart metering.
One can list some main tasks allocated to such a forum102:
102
Advise and provide inputs to projects, initiatives, policy makers and other national and EU
institutions (e.g. the SET-plan).
Monitor and facilitate the deployment stage ensuring efficient use of resources both private
and public (e.g. European Industrial Initiatives).
Encourage timely attention to catalyst projects to ensure that potential technical, regulatory
and commercial barriers are not over-looked.
The list is based on activities proposed by SmartGrids ETP.
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Identify and promote opportunities for collaboration at all stages in the innovation chain
including access to funding sources (for instance European Institute of Technology EIT,
Knowledge Innovation Communities KICK, EERA, or SETIS).
Involve customers and increase awareness of smart metering (grids) value to society.
To continue building-up on technical working groups and provide potential response in

setting-up other working groups or core advising groups that can reply to the requests from
stakeholders and the EU.
The list is no way exhausted and should be modified according to national circumstances and needs.
Next steps
This roadmap should respond to government leaders requests for more detailed analysis regarding
the growth pathway for smart metering, a key element of smart grid strategy. It should describe
approaches and specific tasks regarding smart metering RDD&D, financing, planning, grid integration,
legal and regulatory framework development, public engagement, and international collaboration. It
also provided regional projections for smart metering deployment from 2010 to 2020.
Finally, this roadmap aims to detail actions and milestones to aid policy makers, industry and power
system actors in their efforts to successfully implement smart metering. The roadmap is meant to be
a process, one that evolves to take into account new developments from demonstration projects,
policies and international collaborative efforts. The roadmap shall be designed with milestones that
the international community can use to ensure that wind smart metering development efforts are on
track to transform the current energy system into a smart one.
From the lessons learned stimulus for roadmap implementation and revision shall be concluded:
Approach roadmapping as a living process that continues past the roadmaps initial
publication.
Plan a successful roadmap launch to build awareness and create momentum needed to
stimulate action.
Designate the roadmap implementation body early in the process.
Monitor key energy, environmental and economic indicators to track progress.
Conduct regular roadmap revision workshops to adapt roadmap goals and priorities to
changing circumstances.
Special issues concerning implementation of art. 13 of the ESD

The already considered art.13 of the ESD has a special value when smart metering is implemented in
the EU. Therefore in tab. 5 some key issues concerning the implementation are presented. These
may be useful in process of drafting the roadmap at national level and could serve as a guidance.
Table. 5 Special issues concerning implementation of art. 13 of the ESD103
Question
Possible answer
Has Art. 13 of the ESD been transposed in your Member Fully transposed
State?
Partially transposed
No, not transposed yet
. In what form was Article 13 implemented?
Provide the names and reference
numbers of the relevant legislative acts,
policies
what were the reasons and main drivers for the early
Improve on existing cyber security
implementation of Art. 13?
strategy
Implement automated tools for network
traffic monitoring
103
CA EASD (public domain)
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Create & deploy a substation protocol

integration strategy
Utilize a single communication
infrastructure for all field devices
Expand the deployment of distribution
feeder automation
Deploy data management system for
automation & analysis
Implement an integration bus for
secured and controlled enterprise- wide
sharing of applications and databases
If Art. 13 has not been transposed into national law,
why has this not happened in your MS yet?
Are there any concrete plans and time schedules for the
transposition?
What would be the optimal way to implement the
relevant provisions of Art. 13 in your MS?
Which concrete changes in which articles of which laws
(by-laws regulations, decrees, etc.) are necessary in
your MS for full mandatory introduction of smart
metering?
Are smart metering policies in place in your MS?
What are/were the most controversial issues in the

discussion about the introduction of smart metering in
your MS?
Has your MS defined or are there any plans to define
minimum feedback requirements to consumers (in form
of in-house displays, billing, internet, etc.)
. Are you aware of any form of legal requirements (at
national or regional level) on market operators to
provide certain type of informative feedback/advice to
end-use energy consumers?
. Are you aware of any specific legislation covering
privacy and security issues associated with smart
metering?
Ownership of electricity meters: The meters that are
currently in place are owned by the supplier, the
distributor, a metering company or the consumer.
Are you aware of any plans to change the structure of

ownership in the future (e.g. liberalisation of metering
regime, etc.).
What is the legal obligation in your MS to read the
meters of
small, low-voltage customers?.
Full Compulsory Introduction

Partial Compulsory Introduction
Under Discussion
No Policy
Supplier
Distributor
Metering Company
Consumer
Every month or less than a month

Less than every 3 months
Every Year or less than a year
More than once a year
. In some MS the mandatory monthly invoicing has

encouraged the roll-out of smart meters. Are you aware
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of any such plans in your member state?

Are you aware of any existing cost-benefit analyses of
the full roll-out of smart metering in your MS?
Are you aware of any public subsidies to support the
roll-out of new meters in your MS?
Are energy utilities and other relevant stakeholders
more in favour or more against the roll-out of smart
meters in your MS?
How many (conventional) meters are in place at the
moment and need to be replaced?
Provide list of the most relevant ongoing and finished

pilot projects in your MS for electricity, gas and heat.
Number of conventional meters that

need to be replaces
Electricity
Gas
Heat
Name of energy utility
Number of meters rolled out
Are the pilots being evaluated by a third
party?
Are the pilots supported by public
subsidies?
Are there any roll-out plans in the future in your MS?
Tailoring the roadmap process

There is no right way to develop a roadmap. Some processes engage large groups of stakeholders
who spend long periods gathering many diverse contributions and building consensus on priorities.
Others are developed by a small group of knowledgeable analysts and experts who work intensively
for a short period to integrate available data, analysis and insights into a logical framework. Each
approach has its merits and the organisation or community responsible for developing the roadmap
must determine which one works best for their situation.
A methodical approach to defining a smart metering (grid) vision can be accomplished through
leadership workshops that define a portfolio of strategic options and establish the criteria to analyze
the portfolio's value (both quantitative and qualitative). These sessions assess the various smart grid
technologies to determine what unique mix (technologies and geographies) is the best fit to meet
the utility's objectives.
The key steps to defining a smart metering (grid) vision are104:
Define a decision framework.
Develop strategic options.
Analyze value.
Ratify strategy.
Ultimately, this approach results in a richer smart grid strategy and decision making process that is
consistent with other large capital projects.
There are six vital aspects to consider when designing a roadmap process:
Stakeholder participation.
Resource constraints.
Critical inputs.
104
For detais see Lieber B., Welch M.: A Smart Strategy for a Smart Grid,
http://mthink.com/utilities/utilities/smart-strategy-for-smart-grid
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Roadmap design.
Buy-in and dissemination.
Monitoring and tracking.
Table 6. outlines the steps and key questions that national roadmapping leaders should consider in
designing a roadmap process that will lead to the development and uptake of smart metering in their
country.
Table 6. Vital aspects to consider when designing a roadmap process
Aspect
Questions to be answered
Stakeholder participation Who will set roadmap goals and milestones?
Who will be responsible for ensuring goals are met?
What human resources are available to accomplish roadmap activities
and priorities?
Who will be responsible for carrying out activities?
Which stakeholders will be critical for ensuring roadmap success?
Resource constraints
What skills and tools will be needed to prepare the roadmap?
What funds are available to develop the roadmap?
Is there enough time for broad stakeholder engagement?
Are sufficient personnel available to manage and implement the
roadmap development process?
Are appropriate data and analytic tools available to support analysis?
Critical inputs
What data are needed to establish baseline conditions, set goals and
targets, and prepare forecasts?
Are essential analytic capabilities and tools available to evaluate
alternative scenarios?
What technical expertise is needed to evaluate technology
performance and limitations?
Which regulators and policy leaders can provide insight on factors
affecting technology adoption?
Which private entities will be critical to technology success?
What is the largest non-core project the company has ever
undertaken?" and "Why was this project successful/ unsuccessful?
Roadmap design
Will goals and milestones include date-based, quantitative targets?
What information must be included in the roadmap?
What level of detail is needed for effective implementation and
action?
What supporting information and data are needed?
Will activities be assigned to organisations for action?
Buy-in and dissemination How will the roadmap be communicated to convey key messages and
engage critical partners?
What methods and media will be used to disseminate the roadmap
and build support for its goals?
What key stakeholder groups need to be reached and what is the best
mechanism for reaching them?
What techniques will be used to reinforce the value of the roadmap
and create buy-in?
What resources, skills and tools will be needed for effective
communication?
Monitoring and tracking
Who will be responsible for tracking progress towards roadmap goals
and milestones?
What data and analysis tools will be needed to create and track
roadmap metrics?
What new information will be needed to adjust technology scenarios
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as time advances?
Who should be involved in re-evaluating technology pathways at
regular intervals?
How will national policies be adjusted if roadmap targets are not being
met?
For each of the application areas, define the following:
Description: A description of the application area
Use Cases: A summary of the use cases analyzed
Actors: A table of the actors discovered in the use cases
Requirements, drivers: The significant drivers of requirements for use cases in the section
Communications diagram: A summary diagram showing the actors and their interactions
derived from the Use Cases in this application grouping.
The final step in developing a smart metering (grid) strategy basing on this roadmap is to understand
how the project will be executed. Utilities should begin implementation planning by asking the
following key questions105:
What is the project scope?
What are the key success factors?
What is the timeline to complete the project?
Which technologies do we implement first (priority/critical path)?
What resources are going to do the work? What can be done with internal employees vs.
consultants and contractors?
What are the risks? How will we manage them?
What are the key integration points?
What are the competing priorities/projects?
SWOT of a roadmap
In tab. 7 SWOT for Smart Metering in any state is presented. It can be regarded as an example and
when completing your own roadmap it should be adopted to local circumstances.
Table 7. SWOT of a road map
Strong
Weaknesses
Constitute an essential part of Smart Grid
Requires large investment costs
Receive strong support from environmentLack of clear rules on cost compensation
energy policy
Requires consensus from all stakeholders
Wide knowledge that smart metering is
strongly challenging task requiring careful longterm planning (strategy)
Opportunities
Threads
Provide benefits for wide circle of stakeholders Lack of interest from main stakeholders e.g. endIntegrating environmental goals on energy
users
enterprises level (energy manufactures, TSO,
Too many initiatives undertaken which may
DSO)
result in chaos and lack of co-ordination
Removing barriers for investing in technological Lack of or wrongly structured road mapping
innovation
Individual, not harmonised actions of main
105
Lieber B., Welch M.: A Smart Strategy for a Smart Grid, http://mthink.com/utilities/utilities/smart-strategyfor-smart-grid
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Creation of new services e.g. data exchange

agent
Incentivising smart metering enables creation
of a more competitive retail market place
Fast cost reduction due to technological
development and growing market scale
Data protection issues must be settled in a
credible and predictable manner
Interoperability standards enable the market to
compensate for lack of synchronisation due to
existing functional and information unbundling
stakeholders
Reluctance to make costly investments in
financial crisis
Existing unbundling rules pose a challenge for
synchronisation of network investments and the
creation of new services.
Time phasing of the roadmap

Planning the activities embraced by the roadmap is a challenge due to several reasons e.g. possible
unstable political and legal framework at EU and national levels, involvement of large number of
stakeholders representing diverse interests, fast technological development, difficulty with
prediction of financial resources available, over optimistic or pessimistic approach and may others.
The process of time phasing is very much nation (regional) dependent.
It is projected that the roadmap is phase in four stages:
1. Planning and preparation.
2. Visioning.
3. Roadmap development.
4. Roadmap implementation and revision.
Schematic presentation of each of these stages is presented in tab. 8. It should be regarded as a draft
to be changed or amended during discussions.
Table 8. Time phasing of the roadmap
Planning and
preparation
Phase
Description
Setting up initiating group of stakeholders and experts
Timelines
1...2 moths
Rough identification of resources (legal, regulatory, human,

technical)
Reaching consensus
Visioning
Setting up leading body (e.g. SM Platform, Steering Committee)
2...3 moths
Determination of scope, boundaries, and implementation

approach
Seeking linkage and co-ordination with other related projects at
national and EU levels
Road
map
devel
opme
nt
Identification of conditions for first lighthouse pilot projects

Conduct senior-level vision workshop to identify long-term goals
and objectives
2...3 moths
Page 75/86
Phase
Description
Timelines
Conduct mobilising workshops, organised regionally
Roadmap implementation and revision
Assess potential contributions of technologies to each future

energy, environmental, and economic goals
Conduct expert workshop(s) to identify and prioritise needed
technologies, policies, and time lines
1...2 moths
Develop roadmap document, launch strategy, and tracking
2...4 moths
Planning and co-ordinating of small- medium-size lighthouse pilot

projects
1...3 months
Conduct expert workshop(s) to reassess priorities and time lines as

progress and new trends emerge
1...2 moths
Realisation of the lighthouse pilot projects
1...2 years
Experience gathering e.g. bilateral meetings, internal reports, first

results public presentation
Continually
Creation centres of excellence supporting smart metering

development
When
necessary
Conduct review and consultation cycles with key stakeholders to

gather knowledge and experience to refine roadmap
On regular
basis
Experience sharing and feed-back workshops
On regular
basis
Promotion of the road map and taking new participants
Continually
Increasing size of existing projects
When
necessary
Initiating new projects with option for attracting new partners
When
necessary
Preparation and launching and accomplishment of large scale

demonstration projects
When
necessary
Track changes in MS surrounding as roadmap is being

implemented
Continually
Revision of the road map on regular bases and at cross-points
When
necessary
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Evaluation of smart grid related programs106

As with the introduction of any new products or programs into a regulated market, there should be
close monitoring of how assets are being deployed and what benefits are being derived or not
derived. The purpose of such close monitoring is twofold:
1. to learn lessons both good and bad, quickly,
2. to cut losses for consumers where something has gone very wrong by either making midcourse corrections or where appropriate, simply curtailing failing programs.
It is critical that regulators and market participants be positioned to learn appropriate lessons to fully
capture and retain the value of smart assets. It would also be very useful to look at different types of
demand response programs enabled by smart meters and related equipment. This could shed light
on what approaches achieve the best results. Also useful would be an assessment of the results in
demand programs that are enabled by timely price disclosure, as contrasted with those associated
with central dispatch of appliances within the premises of customers.
State of art in smart metering in EU

Most new buildings in the MS are equipped with individual meters with one household as a unit.
However, old buildings with district heating are usually metered on the basis of the building or block
of apartments. Changes are technically difficult and economically expensive and are therefore
unlikely to happen soon107.
For the purposes of this road map, the main feature of smart metering is the possibility of providing
final customers with more information on their energy usage. Support for this claim comes from a
series of trials of smart metering that have been carried out which suggest that final customers can
save between 10% and 5% of their energy consumption when provided with such information108.
Generally, it can be observed that in those MS where Art.13 was transposed early a coincidence of
two factors occurred:
the wish to fulfil the requirements of EU legislation,

interest and involvement of the dominating domestic energy utilities.
There are also a long list of other incentives which play a secondary role in implementation of smart
metering, e.g. support from the gas and electricity distribution companies wishing to reduce losses
and thefts, giving the consumers a bigger incentive to save energy, increasing energy efficiency, more
efficient retail markets and improving the reliability of energy supply.
Smart metering is still in pilot phase in most of the MS. With over 5 Mio new meters installed in
Sweden and more than 25 Mio in Italy, positive examples of successful roll-outs do exist. According
to Eurostat, there are around 200 Mio. households in the EU-27. Replacing conventional electricity,
gas and heat meters with smart meters will be a major challenge109.
Paper billing is still the predominate form of billing with monthly and annual billing frequencies being
the most common.
As it currently stands in the EU, billing does not necessarily reflect the actual consumption for the
period in question110. Many countries read energy meters at a lesser frequency than they issue bills
(considerably so in some cases). The bills are based on a combination of interpolation, estimation
and customer declaration. The majority of MS show the relationship between the cost of the energy
106
107
CA ESD Executive Summary Report, 2010, http://www.esd-ca.eu/Reports/Executive-Summary-Reports

Smart Metering Guide Energy Saving and the Customer
109
CA ESD, WG 4.2 Report: Metering & Billing, 2009.
110
CA ESD, WG 4.4 Report: Behavioural aspects of metering and billing: how to achieve energy savings?, 2010.
108
Page 77/86
and declared consumption as part of the bill package, but user specific information (such as peer
comparisons or usage patterns) are still rare. Interval meters are still the most common means of
gathering consumption data. 16 MS have energy sector specific data protection regulations in place
or plan to do so. Most other states feel that their existing data protection legislation automatically
covers the energy sector. In terms of metering services already offered across the MS, variable tariffs
have been introduced, tested or are being planned in 25 out of the 28 MS. Provision of real-time
consumption data is also high on the list of services provided.
In the opinion of the respondents, the majority (23 MS - 82%) feel that detailed information packages
(note: not necessarily bills) which include data on consumption patterns and pricing have the most
potential to enable behavioural change. This is closely followed by access to energy efficiency
information (19 MS - 68%) and access to real time consumption data (17 - 61%) such as in-home
displays and web sites. The provision of information via third party services was the least popular.
The majority of respondents feel that frequent billing will enable customers, who wish to do so, to
regulate their energy consumption but that this is not a guarantee that frequent billing would result
in lower energy consumption. Again, the majority agree that frequent billing can be interpreted as
every month, but many cautioned that the provision of an information package with the bill was
more important. Finally, regarding the question of self-regulation of energy consumption by the
customer, there was a broad disagreement that smart meters, by themselves, were necessary to
measure actual consumption. Many felt that actual consumption could be measured by simpler
meters but it is the presentation of this information to the customer that matters.
Communication with other initiatives

The concept of smart greed or smart metering dated back to mid 1980 is relatively new but
sufficient to conclude that at present a large number of different activities are ongoing or have been
completed all over the world, with the USA and the EU taking the lead.
Planning smart metering activates as a part of smart grid development one shall be cautious about
not duplicating works and taking advantage from the vast experience accumulated. It is therefore of
value to review main EU activities which should be correlated with our own undertakings in order to
receive synergy effect.
European Technology Platforms

European Technology Platforms were first introduced in the EC Communication Industrial Policy in an
enlarged Europe in December 2002. The platforms bring together R&D-relevant stakeholders with
various backgrounds (e.g. regulatory bodies at various geopolitical levels, industry, public authorities,
research institutes and the academic community, the financial world and civil society) with the task
of developing a long-term R&D strategy in areas of interest to Europe. The platforms also had a
mandate in helping further to mobilise private and public R&D investments (cf Barcelona target of
three per cent GERD by 2010)111.
IEA Implementing Agreements

The IEA Electricity Co-ordination Group facilitates cross-sectoral efforts in the electricity sector by
numerous IAs. In the most recent meeting (April 2010), it was decided that co-ordination was needed
for smart grids. This co-ordination has resulted in several joint initiatives among electricity related
IAs, including some of the activities outlined below.
The Implementing Agreement for Co-operation on Technologies and Programmes for Demand- Side
Management (DSM IA) works on electricity load shaping and load levelling. Load shaping enables the
control of electricity demand in order to avoid inefficient and costly overload peaks. Load levelling is
accomplished by storing excess electricity during periods of low demand and through the
111
For more about platforms see http://cordiseuropa.eu/technology-platforms/home_en.html.
Page 78/86
implementation of energy efficiency. The DSM IAs work is focused on the customer: relevant tasks
include work on integration of DSM, energy efficiency, distributed generation and renewables and
micro-demand response and energy savings. (www.ieadsm.org).
A key objective of the Implementing Agreement on Electricity Networks Analysis, Research and
Development (ENARD IA) is to enhance the awareness of policy makers of the importance of
electricity networks in meeting energy policy objectives. The ENARD IA develops new operating
procedures, architectures, methodologies and technologies in a comprehensive and unbiased form
to its four key stakeholders: governments, policy makers, power utilities and power engineering
equipment producers. The ENARD IA organised its activities in four annexes: work on information
collation and dissemination; distributed generation system integration; infrastructure asset
management; and transmission systems. (www.iea-enard.org.)
A core function of a new electricity grid is energy storage. The objective of the Implementing
Agreement for a Programme of Research and Development on Energy Conservation through Energy
Storage (ECES IA) is to develop advanced thermal and electrical energy storage and serve as a
platform to share knowledge and experiences about demonstration projects. Its work includes
promotion of standards, demonstration plants, in situ measurements and design tools.
The Implementing Agreement for a Co-operative Programme for Assessing the Impacts of HighTemperature (HTS IA) is an R&D platform for high temperature superconductivity, a technology that
can transport current with low losses and a very high power density. The aim of the HTS IA is to
evaluate the impacts and benefits of HTS and to identify barriers. Select HTS IA RD&D projects
include alternating current losses and HTS, fault current limiters, simulating HTS using
electromagnetic
transients
programmes
and
superconducting
motors.
(www.superconductivityiea.org.)
SmartGrids ETP Forum

The SmartGrids European Technology Platform produced its Vision paper in 2006, a Strategic
Research Agenda in 2007.The draft SDD from November 2008 was finalized beginning of 2010. These
documents were internationally recognized and were instrumental in putting smart electricity grids
on the political agenda in the world.
European Electricity Grid Initiative

The European Electricity Grid Initiative (EEGI) Roadmap 2010-18 and Implementation Plan 2010-12,
was formally endorsed at the SET-PLAN conference in Madrid on 3rd of June 2010.
The EEGI is one of the European Industrial Initiatives under the Strategic Energy Technologies Plan
(SET-PLAN) and proposes a 9-year European research, development and demonstration (RD&D)
programme to accelerate innovation and the development of the electricity networks of the future in
Europe. The programme focuses on system innovation rather than on technology innovation, and
addresses the challenge of integrating new technologies under real life working conditions and
validating the results. It was developed by the network operators, in particular entso-e and edso4sg,
with the contribution from other stakeholders.
European Smart Metering Alliance (ESMA)

The European Smart Metering Alliance (ESMA) has been formed by a number of interested
organisations with partial funding from the European Union's Intelligent Energy programme112.
112
More information: http://www.esma-home.eu/
Page 79/86
Smart Metering in SET Plan113

European industrial initiative on the electricity grid
Strategic objective
To transmit and distribute up to 35% of electricity from dispersed and concentrated renewable
sources by 2020 and a completely decarbonised electricity production by 2050; to integrate national
networks into a market-based truly pan-European network, to guarantee a high quality of electricity
supply to all customers and to engage them as active participants in energy efficiency; and to and to
anticipate new developments such as the electrification of transport.
Industrial sector objective
To substantially reduce capital and operational expenditure for the operation of the networks while
fulfilling the objectives of a high-quality, low-carbon, pan-European, market based electricity system.
Technology objectives
1. Developing and validating advanced network technologies to improve flexibility and
security of the network, and to mitigate future capital and operational expenditure. These
include new high-power equipment, integration of electricity storage and monitoring and
control systems.
2. Preparing the long-term evolution of electricity grids to ensure the proper investments are
made in the coming years to address the requirements of the future portfolio of electricity
generation and consumption.
3. Engaging the active participation of customers in energy markets and energy efficiency
through better information about their consumption, incentives such as dynamic pricing
mechanisms and appropriate ICT tools.
4. Elaborating and testing innovative market designs to ensure a proper functioning of the
internal market for electricity both at European and local scale. Structured interactions will
be setup with the other industrial initiatives, particularly on wind and solar energy and with
the public-private partnerships on green cars and on efficient buildings, to ensure a
coordinated development of the appropriate technologies, and where appropriate, to
organise joint demonstration activities.
Actions.
A balanced research and demonstration programme led by Transmission and Distribution System
Operators (TSO's and DSO's) is required that includes in the demonstration part of the programme a
set of 20 large scale projects, covering diversified geographical, social and climate conditions,
involving a total of at least 1.5 million customers. All the actions will be fully in line with the 3rd
Internal Energy Market package.
1.
Network technologies
R&D & demonstration activities to validate state-of-the-art power technologies for transmitting
and controlling the flow of large amounts of power over long distances and from offshore sources
and to develop new monitoring and control systems to ensure the integration of large numbers of
variable renewable energy sources while providing the expected power quality and voltage, and to
operate pan-European networks in normal and critical conditions. These solutions will also consider
the integration of electricity storage and facilitate the introduction of large numbers of electric
vehicles.
113
COMMISSION STAFF WORKING DOCUMENT A TECHNOLOGY ROADMAP for the Communication on Investing
in the Development of Low Carbon Technologies (SET-Plan), {COM(2009) 519 final}
Page 80/86
Demonstration activities on solutions for automating distribution network control and operation,
including self-healing capabilities. These will increase power quality and reduce operational
expenditure
2. Long-term evolution of electricity networks
R&D activities to develop modelling and planning tools for the long-term evolution of the grid, and
validating innovative pan-European grid architectures, needed to increase the capacity to transport
large quantities of renewable energy from all sources and to develop methods and tools for asset
management, for preventive maintenance and for optimising the assets' life cycle.
3. Active customers
Demonstration activities on different solutions to activate demand response for energy saving, for
the reduction of peak consumption and for balancing variable renewable electricity generation using
visualisation of consumption for consumers, dynamic time of use tariffs and home automation
technologies (up to 500000 customer points) and on solutions for smart metering infrastructure to
unlock the potential of smart meters as the key to provide detailed information to customers, and to
provide benefits to retailers and network operators, identifying regulatory, technical and economic
opportunities.
4. Innovative market designs
R&D activities on cross-cutting issues to proposing market designs that provide incentives for all
actors to contribute to the overall efficiency, cost effectiveness and carbon footprint of the electricity
supply system to provide inputs to updates of regulatory frameworks to ensure their following the
policy and technology developments114.
This reflects the total sum of the required public and private investments.
Indicative Key Performance Indicators (KPIs)

Number of customers involved (at least 1.5 million).
Greatly increased capacity to host RES electricity from central and distributed sources, (to at least
35% of electricity consumption) including readiness for massive off-shore wind integration.
Increased overall quality of electricity supply (by a 2-10% reduction of energy not supplied).
Reduced peak to average load ratio (by 5-10%) and thus reduced need for investments.
Full integration of customers in market mechanisms promoting energy efficiency and active
demand practices.
114
These costs exclude the costs of the generic assets used in the demonstration, estimated in several billions
euros, paid directly by the balance sheet of the network operators and of other participants.
Page 81/86
Roadmap of European industrial initiative on the electricity grid is presented in fig.13.
Fig. 13 Roadmap of European industrial initiative on the electricity grid
Energy efficiency Smart Cities Initiative

The Smart Cities Initiative aims to improve the energy efficiency and to deploy renewable energy in
large cities beyond the levels envisaged for the EU energy and climate change policy. This Initiative
will support cities and regions to take ambitious and pioneering measures to progress by 2020
towards a 40% reduction of greenhouse gas emissions through sustainable use and production of
energy. This will require systemic approaches and organisational innovation, encompassing energy
efficiency, low carbon technologies and the smart management of supply and demand. In particular,
measures on buildings, local energy networks and transport would be the main components of the
Initiative. It builds on existing EU and national policies and measures and it draws upon the other
SET-Plan Industrial Initiatives in particular the solar and electricity grid. It also relies on the European
Economic Plan for Recovery, and public-private partnerships on Buildings and Green Cars.
In order to achieve the above measures, the Smart Cities Initiative proposes ambitious development,
deployment and testing programmes for building, energy networks (heating and cooling, electricity)
and transport applications to test and validate advanced energy efficient and low carbon
technologies and programme strategies under real-life conditions. This includes the testing and
assessment in the next 10 years of up to 200 zero-energy buildings in different climatic zones, of
different strategies for the refurbishment of existing buildings; the establishment of up to 10
development and deployment programmes for smart grids in cities, the set up of development and
testing programmes for the large deployment of low carbon transport systems and alternative fuel
vehicles. In parallel, demonstration programmes will focus on the large scale deployment of RES
Page 82/86
heating and cooling in cities and their integration in energy efficient buildings. The cost of such a
European programme is estimated at 10-12 billion over the next ten years.
Page 83/86
Recommendations115
The following recommendations are made to assist stakeholders as they make smart metering (grid)
technology deployment decisions and also develop implementation strategy:
1. Customer price signals should reflect real-time costs at time of actual energy use. Utility
incentives should be neutralized between demand- and supply-side resource options by tying
profits to energy services provided, not simply kWh sales.
2. Smart grid investments before the meter should be recovered as fixed costs. The costs of
meters and load-control equipment for customer-specific load control should be recovered
on a variable basis, either as a variable cost or as part of an energy charge.
3. The risks associated with the deployment of smart grid assets should be symmetrically
allocated so that those best positioned to manage assets and with the most at stake
financially have the greatest potential for gain or loss.
4. All customer-specific data must belong to the customer for use as he/she determines.
Aggregate system data should be considered public information.
5. Smart meters should be installed on a universal basis in order to capture their optimal
benefits.
6.
National standards are critical, and it is particularly important that meters and data systems
are capable of bi-directional communication with customers and suppliers and can be
transferred between suppliers.
7. Customers must have a specifically enumerated set of rights, including (but not limited to)
the right to: (1) confidentiality of personal information; (2) ownership of information; (3)
choice of supplier and/or portfolio of supply options; (4) real-time price information; (5)
appliance control; (6) install equipment to improve service quality; (7) net metering; (8)
subscribe to aggregation of demand; (9) select meter and post-meter devices; (10) avoid
asymmetric allocation of risk and reward; and (11) choose level of service quality.
8. New smart grid products and programs must be evaluated to identify best and worst
practices and cut losses for consumers when something has gone wrong.
9. Utilities should receive appropriate incentives that link earnings to performance and ultimate
value to customers, rather than to sales of kWh. These incentives will also induce utilities to
innovate.
115
Page 84/86
Literature
1. Action Plan for Energy Efficiency: Realising the Potential. COM(2006)545 final, Brussels,
19.10.2006.
2. Analysis of the Action Plan for Energy Efficiency: Realising the Potential {COM(2006) 545 final}.
COMMISSION STAFF WORKING DOCUMENT Accompanying document to the COMMUNICATION
FROM THE COMMISSION Action Plan for Energy Efficiency: Realising the Potential, Brussels, xxx
SEC(2006) 1173.
3. Appendix of the EEW Final Report on the In-depth Evaluation of National Energy Efficiency Action
Plans, Energy Efficiency Watch (EEW).
4. Brown A., Salter R.: Smart grids issues in state law and regulation, 2010.
5. Building a European Smart Metering Framework suitable for all Retail Electricity Customers,
EURELECTRICs Position Paper, 2008.
6. DIRECTIVE 2004/22/EC of the European Parliament and of the Council of 31 March 2004on
measuring instruments.
7. Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 on energy
end-use efficiency and energy services and repealing Council Directive 93/76/EEC 2006/32/EC
(ESD), http://eur lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:114:0064:0085:EN:PDF
8. Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning
common rules for the internal market in electricity and repealing Directive 2003/54/EC, OJ 2009
L 211/55 (Directive 2009/72);
9. Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning
common rules for the internal market in natural gas and repealing Directive 2003/55/EC, OJ 2009
L 211/94 (Directive 2009/73);
10. DRAFT NISTIR 7628 Smart Grid Cyber Security Strategy and Requirements, Annabelle Lee, Lead
11. Energy Technology Roadmaps a guide to development and implementation, IEA, Paris, 2010.
12. ESMA European Smart Metering Alliance, August 2009, http://esma-home.eu
13. European Commission (2010). Retail Markets - Interpretative Note on Directive 2009/72/EC
Concerning Common Rules for the Internal Market in Electricity and Directive 2009/73/EC
Concerning Common Rules for the Internal Market in Natural Gas, Commission Staff Working
Paper, Brussels.
14. Farhangi H.: The Path of the Smart Grid, IEEE Power & Energy Magazine, January/February 2010.
15. Mantooth A.H.: Critical improvements are being made to the grid as it exists now,
http://connectedplanetonline.com/home/commentary/smart-grid-road-map-0105/
16. NIST Draft Publication: NIST Framework and Roadmap for Smart Grid Interoperability Standards
Release 1.0 (Draft), U.S. Department of Commerce, September 2009.
17. Regulation (EC) No 713/2009 of 13 July 2009 establishing an Agency for the Cooperation of
Energy Regulators, OJ 2009 L 211/1.
18. Regulation (EC) No 714/2009 of 13 July 2009 on conditions for access to the network for crossborder exchanges in electricity and repealing Regulation (EC) 1228/2003, OJ 2009 L 211/15.
19. Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on
conditions for access to the natural gas transmission networks and repealing Regulation (EC) No
1775/2005, OJ 2009 L 211/36.
20. Remote Metering of Electricity as a Means to Provide Information to Customers on Energy
Consumption and to Promote Demand Side Management Programmes Anbal T.de Almeida,
Paula Fonseca, Lvio Honrio Energy Pulse 2005/09
http://www.energypulse.net/centers/article/article_display.cfm?a_id=1092
21. Report on the identification and specification of functional, technical, economical and general
requirements of advanced multi-metering infrastructure, including security requirements, OPEN
meter Open Public Extended Network metering, 7FP.
22. Schaub T.: The OPEN meter Roadmap. The Standardisation Roadmap, OPEN meter Open Public
Extended Network metering, 7FP.
23. Smart Grid Roadmap, IEA, 2010, www.iea.org/roadmaps
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24. Smart Meter Roll-out: Energy Network Business Market Model Definition & Evaluation Project,
2009, www.bargina.com
25. Smart Metering for Electric and Gas Utilities, An Oracle Utilities White Paper, November 2007
26. Smart Metering Guide Energy Saving and the Customer, European Smart Metering Alliance
(ESMA), http://www.esma-home.eu/
27. Survey of Regulatory and Technological Developments Concerning Smart Metering in the
European Union Electricity Market, Jorge Vasconcelos, RSCAS Policy Papers 2008/01
28. Swora M.: Intelligent Grid: Unfinished Regulation in the Third EU Energy Package.
29. Tanya Brewer, Editor Computer Security Division Information Technology Laboratory, September
2009.
30. U.S. Department of Energy, The Smart Grid: an Introduction, 2008. Available through
http://www.oe.energy.gov/SmartGridIntroduction.htm
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Roadmap Guidelines

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Roadmap for innovative smart metering services

Guidelines by Professor Tadeusz Skoczkowski,

Advanced Metering Infrastructure

Oxford Advanced Learners Dictionary, Oxford University Press 2010

Road map general rules

The logic of a roadmap is depicted in fig. 1.

GAPS AND BARRIERS

Figure 2: Roadmap process outline.

Purpose of creation of this roadmap

Smart Grid Roadmap, IEA.

Roadmap content and structure

European Smart Metering Alliance (ESMA), http://www.esma-home.eu/

Fig. 3 Smart grid pyramid .

Fig. 4 The evolution of the smart grid15.

Fig. 5 Smart grid return on investments (ROI)16.

Smart grid benefits

Driving forces for smart grid

IT involvement as well as operations, engineering and administrative management of

Electrical substation automation as well as true power grid automation.

Third party services as well as in-house commitment of individual end-users.

Smart metering at all levels.

The Smart Grid Conceptual Model23

Fig.6 Smart Grid Conceptual Model Top Level24.

Table 1 Domains in the Smart Grid Conceptual Model

Advanced Metering Infrastructure26

Purpose / Value Proposition28

Table 2. Actors in AMI systems31.

Fig. 8 AMI System application summary communication diagram32.

Coordination and future-proofing AMI Systems

AMI-SEC Task Force Roadmap

offering the right balance between functionalities and cost;

Heat and cooling smart metering.

Gas smart metering.

Water smart metering.

Multi-utility smart metering.

Smart Metering and the Smart Grid

Fig. 9 Smart metering system44.

Benefits of smart metering

The ability to switch more easily between energy suppliers.

ESMA European Smart Metering Alliance, August 2009, http://esma-home.eu

Defers investment in generation and infrastructure.

Smart metering functionalities

Periodic Meter Reading.

On-demand Meter Reading.

Net metering for DER and PEV.

Feed-In Tariff Metering for DER and PEV.

Bill - Paycheck Matching.

Smart Metering Guide Energy Saving and the Customer.

Automatic processing, transfer, management and utilisation of metering data.

Automatic management of meters.

Two-way data communication with meters.

Functional requirements are met.

Low cost of implementation.

Low cost of maintenance.

Broad industry support.

Driving forces for smart metering

Takes a long time to complete.

EUROELECTRIC recognizes the following three barriers52:

Identification of stake holders and their role

List of Stakeholders of SmartGrids ETP57

Fig. 10 Main stakeholders in smart grid activities59.

SmartGrids ETP, http://www.smartgrids.eu/

Legal surroundings around smart metering

CA ESD, Executive Summary Report, 2010, http://www.esd-ca.eu/Reports/Executive-Summary-Reports.