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By 2020, more than 237 million smart electricity meters will be deployed across Europe and almost 90% of installed electricity meters in Western Europe will be smart, according to a new report from Pike Research.

Smart meters will provide a platform for energy efficiency improvements, new customer services and network optimization. To achieve that goal, the report says more than 30 million meters will need to be deployed annually during the peak years of activity and major upgrade programs will need to be executed in parallel in Europe’s largest countries, along with many smaller projects in a diverse range of countries and utilities.

According to the report, the economic crisis in Europe has so far not been a brake on smart meter programs, but it is putting additional pressure on utilities and governments to ensure that the benefits of smart meters are realized and made visible to customers. 

Policy

Smart meter programs in Europe are not just a utility-operations issue; they are also a core part of the energy policies of the European Union (EU) and of many national governments, Pike Research says.

The firm says smart meters and associated developments in smart grids are seen as enablers of a low-carbon Europe that, by 2050, will have reduced its greenhouse gas (GHG) emissions to 80% of its 1990 level and almost completely ended its dependence on fossil fuels.

The stepping stones to this ambitious goal are the well-known 20-20-20 targets for 2020: 20% reduction in GHG emission, 20% of energy provided by renewable sources and 20% improvement in energy efficiency, the report notes.

These goals are now enshrined in a wide range of national targets, laws and regulatory orders. Pike Research says the role of smart meters in achieving the EU’s energy goals was clearly identified in the European Commission’s Third Energy Package.

Challenges

The task facing European governments, regulators, utilities and suppliers is to show the advantage of smart metering for consumers, for national energy security and for the environment, the report says.

Pike Research notes that some countries still face a disjunction between the requirements of network operators and consumers, others are taking a more holistic view and some are looking at innovative ways to bridge the gap.

The challenges facing the European economy inevitably cast a shadow over such an ambitious investment program. However, the report says there has been no significant change in smart meter programs that can be directly attributed to the crisis in the Eurozone.

EU market

EU countries have a mandate to deploy smart meters to 80% of customers by 2020, unless they can make an economic case for not doing so. Pike Research says it expects most countries will meet this target.

Of the five largest countries, representing around 60% of meters in the EU, only Germany has yet to make an explicit commitment to a nationwide rollout, the report says. Deployment of smart meters across Europe will be steady over the next 10 years, with the most intensive activity between 2015 and 2019.

The biggest announced programs are in Spain, France and the U.K. The Spanish and British rollouts are already under way and will gain momentum over the next few years. France is expected to begin procurement for its national project in 2013, the report adds.

Pike Research says the biggest uncertainty remains the German market. The German government has been driving a standard specification for smart meters, but has yet to commit to a mandated national program.

A number of countries in Eastern Europe have begun initial deployments of smart meters, notably the Czech Republic, Poland and Russia, the report adds.

Pike Research estimates that around 212 million smart meters will be deployed in Europe between 2011 and 2020, driven by EU and national mandates as well as utility-driven operational efficiency programs. The report says deployments will reach their peak in 2018, when nearly 33 million meters are expected to be deployed - of which more than 27 million will be in Western Europe.

Pike Research forecasts that the smart meter market in Europe will be worth $2.35 billion by 2018 at the peak of major rollout. By 2020, the firm expects the market will be worth almost $1.6 billion annually.

Cumulative revenue between 2011 and 2020 will be almost $16 billion. While the Western European market will peak before the end of the decade, the report says the Eastern European market will continue to show strong growth beyond 2020.

For more information about Pike Research’s report, click here.




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