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The Cabinet adopts relaunch of the digitisation of the energy transition and paves the way for accelerated smart meter rollout
The Federal Cabinet today adopted a bill tabled by the Federal Ministry for Economic Affairs and Climate Action on relaunching the digitisation of the energy transition. The act is set to bring digitisation and the smart meter rollout to a new level as a prerequisite for speeding up the energy transition. Smart meters form part of the digital infrastructure and are therefore an essential element of a close to zero emissions energy system characterised by fluctuating demand and volatile generation. They also provide consumers with more precise and meaningful information about their energy use. In order to quickly ensure legal certainty for the acceleration of the smart meter rollout, the act is to enter into force this spring. The bill on relaunching the digitisation of the energy transition can be found here.
Federal Minister for Economic Affairs and Climate Action Robert Habeck said: “Today’s decision by the Cabinet is an important step on our journey to a digitised energy system. It is a key element in the transformation of our energy supply. We are phasing out of fossil fuels, we are in the midst of it, but all the different elements need to work together intelligently. We need to press ahead with expanding renewable energy and press ahead also with amending and improving the system as a whole. This is what today’s Cabinet decision is about. Expanding renewable energy on the one hand and making increased use of electric vehicles in the transport sector and of heat pumps in buildings on the other requires us to connect electricity generation and demand in an intelligent way. The energy supply of the future will be much more flexible und consequently more complex, which is why we need smart meters and the digitisation of the energy transition. The bill we tabled today sets down in law a clear roadmap for the rollout, making it more systematic, faster to implement, and less bureaucratic. Annual costs for consumers are deliberately capped and the introduction of dynamic tariffs sped up so as to make the use of smart meters more financially attractive.”
The main points of the bill are:
1. Roadmap for rollout set down in law
A roadmap for the rollout including binding targets and a clear schedule is set down in law; the requirement for a market analysis and market statement by the Federal Office for Information Security (BSI) is removed. As a result, the specific rollout goal of driving forward the energy transition is brought into focus. The deadlines for the rollout are based on 2030 as the target year in order to ensure that the digital infrastructure required for a close to zero energy supply is put in place by then.
Up until now, the ‘three manufacturers rule’ applied. However, this rule is unnecessary under EU law and has therefore now been removed, not least because the range of smart meter gateways available on the market is now sufficient. The ‘three manufacturers rule’ set out in the Metering Point Operation Act required that for each development stage three independent manufacturers be certified. As there now is a sufficient availability of smart meter gateways, this rule is no longer needed. This means that going forward, the pace will be set by the most innovative manufacturer and that it will no longer be necessary to wait for three manufacturers to achieve the same level of technological development.
2. Agile rollout enabled
The new element of an ‘agile rollout’ is introduced. This means that certified devices can be rolled out right away to consumers of up to 100,000 kWh (optional < 6,000 kWh) and generators of up to 25 kW (optional 1 to 7 kW).
For these groups, certified devices can be installed from now on even if not all functionalities are available yet.
Additional functionalities (for example controlling and switching on/off) can be activated via a software update. This gives the industry the opportunity to develop processes and practice remote controlling via the smart meter gateway in a ‘trial phase’ before the rollout becomes mandatory. The aim is to ensure that grid operators, market players and electricity customers can reap the benefits of digitisation as soon as possible. They will receive the device earlier with the opportunity to add functionalities later on as part of an update without having to remove and reinstall the device.
Up until now, the case law meant that the Federal Office for Information Security could only give the green light for the rollout if all the minimum technical requirements set down by law had been implemented, including complex functionalities such as the remote controlling of installations and consumption devices. The possibility to take a gradual approach to the rollout by introducing these functionalities step by step as part of a software update had not been covered in the act thus far. This has been changed. The act now provides for an agile approach: during a temporary ramp-up phase, metering point operators can introduce complex functionalities such as remote controlling gradually in order to prepare mass market rollout and gain experience. The minimum requirements set out in EU law in terms of the features to be provided continue to be fully taken into account.
3. Costs are shared more fairly, scope of data sharing for grid operators is expanded and data privacy improved at the same time
Smart meters will cost private households and operators of small installations no more than €20 per year (which is the current maximum price for a modern metering device), which in most cases is much less than in the past.
Grid operators however will bear a greater share of the cost as they will benefit in particular from smart meter rollout. In order to meet the goals mentioned above, data sharing will be expanded and data privacy improved at the same time (by providing specific rules on storage, deletion, anonymisation, pseudonymisation and the more specific defined purposes). All in all, the amendment of the legal provisions benefits both customers and the grid.
4. Introduction of dynamic tariffs accelerated
From 2025, all electricity suppliers – no matter their number of customers – are required to offer dynamic tariffs. This will allow customers to shift their electricity demand away from peak times when large amounts of renewable electricity are available and prices are lower.
Currently, only electricity suppliers with more than 100,000 final consumers are required to offer dynamic electricity tariffs to customers using smart meters. In an effort to speed the process up, the act now makes it a legal requirement for all electricity suppliers to offer their customers such tariffs from 2025.
5. Possibility for controlling grid connection is enshrined
The act will strengthen the possibility to install the smart meter gateway – the smart meter’s secure communication unit – at the grid connection point, where it can best fulfil its role as a security safeguard for the relevant energy-related applications. By using suitable interfaces, the smart meter gateway will make it possible to group together several different consumers/charging units at the grid connection point, which can then operate on the market independently. The grouping is also more sustainable as fewer meters need to be installed.
6. A stronger focus on standardisation and sustainability
In order to strengthen the role of smart meter gateways as a secure communication platform for the energy transition and at the same time to make standardisation easier, the act stipulates that the BSI’s standardisation efforts are to focus on the smart meter gateways. In addition, the requirements with regard to the secure delivery and storage of smart meter gateways (secure supply chain), which are unnecessarily hampering the rollout at the moment, are further streamlined. Mass market postal delivery is thus to be included as a secure delivery option and a stronger focus to be placed on the aspect of sustainability.
7. Providing for clear roles and responsibilities
In order to provide for consistency and efficiency in the Federal Ministry for Economic Affairs and Climate Action’s project management and to align it with the objectives of the energy transition, the act clarifies that the BSI’s standardisation measures are being conducted on behalf of the Ministry.