This is the second part of our interview with Mr. Tomás Llobet, managing director of ESMIG. This time, we discussed the next steps for smart metering and home energy management systems, data access and the future of interoperability. In this conversation, Tomás Llobet also shared an important lesson learned in his career, which is relevant for the matter we discussed, as well.
If you haven’t, click here to read the first part of the interview.
We are witnessing the mass implementation of smart meters across Europe, so we can say that smart metering has come to life. What are the next steps and in which direction will it develop?
The first question here is whether smart metering has truly come to life. At ESMIG we like to use the image of smart meters and smart metering as a 3-stage rocket launch: full deployment of the smart meters is the first phase – that’s the prerequisite for everything else, that’s where we get the rocket off the ground; the second phase is the provision of real-time or near to real-time consumption data to consumers.
When we look at the first phase, the progress has been slower than expected in many EU Member States, some have barely started and penetration is at around 10% or less, while in other countries smart meter rollouts have been 100% completed. Deployment was mandated by EU legislation in 2009 and the first phase should have been finished by 2020. As you can see, this is an objective which has not yet been met in Europe. So, the first stage of the is yet to happen in some countries in Europe to get the rocket off the ground.
While smart meter deployment is ongoing in Europe, the rates and degrees of functionality and interoperability of meters vary a lot. If we look at the second phase, we are far behind almost everywhere, except in the UK where smart meters were deployed together with home devices, where we have tools for consumers to present the data in real time.
The next steps for the future, are enabling demand side flexibility and interoperability. This is what we will need to ensure to harness all the benefits from smart meters in the 3rd phase. The technology we have today is ready, it’s mature and European smart energy solution providers are global leaders, the problem is deployment and implementation.
So, to summarize and get back to your initial question: smart metering has not yet fully come to life – at least not yet everywhere in Europe.
What do you expect now: will applying electric vehicle chargers accelerate the implementation of the home management system? Will utilities be more interested in that?
One of the future drivers for smart metering and demand-side flexibility will surely be the electrification of mobility and mass deployment of electric vehicles (EVs). The sales of EVs were just above 10% of new vehicles sales in the EU in 2020, and we expect them to be above 60% in 2030. And in 2019 they were about 4%, so we’re seeing a significant rise in sales of electrical cars form one year to the next. This will also affect smart metering and the way energy is managed in buildings.
But there are some barriers first that we should overcome. In many places, you don’t yet have the capacity of distribution grids to be ready to have such large numbers of vehicles being fully charged at the same time. Investments will be made in the grid as grids need to be modernized but also in making the buildings and infrastructure smarter.
The key for the third phase of our rocket launch is to make sure we can implement demand side flexibility. When we look at the system that is increasingly reliant on intermittent renewable sources demand-side solutions, it will need to become a reality sooner than later.
We need to make sure that we can use the power when it is available, and this is where the meters are essential, and the consumers will have to play an active role. That means that the vehicle is charged off peak hours, at the same time the washing machine will switch on when the energy is cheaper; and this is where management energy systems will come into play. This will empower the consumer and make consumers an active player in this transition to enable flexibility.
Look at the bigger picture: We have the ambitious renewable energy targets of the EU for 2030 of at least 40% renewables, according to the Commission’s proposal, maybe it will be 45% renewables if you ask the European Parliament. Then we see a faster phase-out of fossil energy as expected just a few years ago; we have several variables and we’re not sure how they will develop in the coming years, especially now with this unprecedented double energy price and supply crisis, which is affecting all of Europe.
But what is sure and that’s where we can see a big contribution from our industry – from smart energy solution providers – is to support the digitalization as an enabler, to deploy and use the technologies and services that allow for consumers’ flexibility and active market participation. This can have a positive effect on prices that consumers pay and foster the efficiency of the system, massively driving energy savings, a no-regret option which is more important than ever in a situation of scarcity and record high prices.
Member States are calling Europe to adopt new measures – this is understandable as the political pressure is huge – but there are low hanging fruits as a response to rising energy prices in empowering consumers. They are in the EU legislation, in the recently adopted Clean Energy Package, in the Electricity Market Design. Again, it’s a matter of transposition and implementation in Member States and removing the barriers to unleash all the potential.
We know that households have many different meters – what do you think about the multi-utility approach? Could we expect smart metering systems to collect information for them as well?
We have smart meters not only for electricity, of course, but also for gas or water. At ESMIG we have a multi utility metering approach but characteristics and implications of meters for electricity, gas, heat, or water are very different. As we just discussed, electricity meters really play a role in empowering consumers and enabling demand-side solutions – this is different for gas or water meters which have a bigger focus on system efficiency, avoiding leaks in the case of water, for example.
We have different siloes for electricity, heating, light, smart appliances, etc. These siloes need to work together to reach interoperability and enable demand-side flexibility. This is the way we approach this. We need to make sure that all these different silos can work together seamlessly. Even if we have different devices, we should have the same standard for the interface.
All these different devices, working together, is interoperability, enabling an IoT-enhanced environment of the smart cities and communities of the future.
How can we achieve true interoperability for home energy management, multi-utility, etc. – in the further development of these systems?
It is important that we have standardization. Then interoperability can be achieved. We can have different devices, but the most important thing is that the interfaces are standardized so that devices can communicate with each other and siloes can work together. This is needed and still needs to be achieved in a comprehensive, efficient, and scalable way.
Simplification might be the solution, and not having too many different standards and regulations. If you have an internal market like Europe, and a growing global market and international standards it is best if you don’t have to adapt to different markets and standards all the time. If you have something tested, and it works, it’s cost-effective and future-proof, it should be implemented it in as many countries as possible.
What we should achieve is close cooperation between different stakeholders. To make sure that these different siloes won’t go back to square one but work together to achieve interoperability.
What is important in this context is also the right regulatory framework. We have an implementation of secondary legislation in Europe. There is a smart grid task force that was set up by the European Commission where different stakeholders work together. They will issue reports and give recommendations for the implementation of legislation. So, it’s not just the cooperation of different associations but also in the framework of the smart grid task force, because at the end of the day, of course, the regulation at the European level will be set by the Commission.
The Commission in turn doesn’t set standards, but they could issue a request for standards to standard-setting bodies such as CEN, CENELEC, ETSI.
What’s your opinion on data access? How do you see the development of that in the future?
Data is the future. The question is whether will is be the new gold or an enabler. It’s very important for different service and solution providers in the energy system that they have access to consumer data. For third parties, having access to the data, near real-time, is necessary to tailor the offers for the consumers based on their consumption pattern, to those consumers interested in benefitting from flexible tariffs, for example. But at the end of the day, what is important to keep in mind is that it’s the consumer’s data.
A lot of the value in smart metering, in the new energy world, is and will be based on data. This is the future for many services and business models are based on the promise and the value granular metering data can generate.
There is also the question of whether the data should be charged. Not for the consumer, of course, the consumer should never have pay for their own data, this is in the European legislation now. But what about third party providers which will offer services to consumers which will likely pass through these costs to the consumer who will in the end be charged, if only indirectly for their own data. We must acknowledge there are costs in anonymizing and treating raw data for the DSOs. But it’s tricky if you start monetizing data because it also lowers acceptance of data-driven of solutions by the consumers and can lead to mistrust. Independent data hubs would be a good way forward to ensure a fair solution.
What is the most important lesson you learned in your career?
An important lesson is about diversity, cooperation, and teamwork. Whatever you do at European level, you must acknowledge that we live in a complex and plural world with different personalities, different perspective and players. If you want to achieve something, you need to build coalitions and work with other people with whom you’ll have to find common ground.
Working in a public policy environment, you must accept diversity, accept that you’re not the only voice, yours is not the only solution. It’s not a zero-sum game. So, to achieve the best result for your organization you need to play as a team, and you need to work together with other players. You may not win every time, but you do win, and to maximize your winnings in the long term you must work together with other stakeholders
What would you highlight in your career?
When I started working in Brussels, almost 20 years ago, I started working as a staffer in the European Parliament for 5 years. I learned to see how many different voices are out there. Political parties, NGOs, industry stakeholders, etc. This is also where I learned that lesson, that you need to break silos and work together and join forces to achieve your goals.
The second thing is that, to do that, to be credible and successful, you need to be not only specialized in your field but also genuine and transparent about what you do, what you want to achieve and why. We’re in an open and transparent environment. Hidden agendas don’t work. Open cooperation is the way to go.
Conclusion
There are working groups within the European Commission that are currently working on interoperability and where ESMIG, DSOs and other organizations are participating. This gives us hope that in the future we can reach interoperability and have adequate standards.
It is also necessary to regulate data access, so that various new services and applications can be further developed. The European Commission is working on this, resolving many issues around data access, whether a data hub should be independent and whether it should be allowed to charge for the data access.
Question for the audience
Do you think that the data hub should be a separate entity, and should it charge for access to the data?