Germany’s decision on whether to mandate the introduction of smart grids could make or break the European industry, according to a new study from analyst firm Berg Insight.
Germany is the only major country in Western Europe that has not required utilities to introduce smart-grid technology, and take-up has consequently been disappointing.
Authorities are now considering whether regulation is needed to encourage a nationwide rollout. An economic assessment has been examining if benefits in the form of energy savings and efficiency would outweigh an investment of between €15 billion and €20 billion.
Germany’s federal government is expected to provide an answer to that question when it announces the results of the assessment next year.
“Germany’s decision on smart metering will be decisive for the future of the whole smart grid technology sector in Europe”, said Tobias Ryberg, a senior analyst at Berg Insight.
By following the example of other Western European countries, and introducing smart-grid regulation, Germany could provide a major spur to the sector.
“In the opposite case, the market opportunities for smart-metering solutions in Western Europe will essentially dry up after 2020 and most European industry players will be unable to find new customers and lose a decade’s experience before the introduction of third-generation smart metering systems begins in 2030,” said Ryberg.
Over the next five years, Berg Insight expects electricity distribution network operators and power suppliers in Europe to invest approximately €15.8 billion in the deployment of 110 million smart meters.
Between 2011 and 2017, the installed base of smart electricity meters in Europe is forecast to grow at a compound annual growth rate of 20.5%, reaching 154.7 million units at the end of the period.
The increase will largely be driven by nationwide rollouts in France, Spain, the UK and a handful of other European countries.
Based on current deployment plans, around 70% of EU households will have smart electricity meters by 2020.