The smart meter rollout is crucial for the transformation of the energy industry. These intelligent electricity meters not only enable precise consumption measurement every 15 minutes, but also give consumers the opportunity to monitor their energy consumption via applications or web portals. Legal requirements stipulate that all households and companies with an annual electricity consumption of more than 6,000 kWh or a photovoltaic system of more than 7 kW must be equipped with smart meters by 2030. In addition, from 1 January 2025, all consumers, regardless of their consumption behaviour or installed systems, will be able to request the installation of a smart metering system from the relevant metering point operator. This promotes the transparency of energy consumption and enables the identification of potential for improvement.
The digitalisation of the energy market through smart meters enables more efficient consumption measurement and creates the basis for active consumer participation in energy regulation. The ability to monitor consumption in real time and adapt it to individual needs creates scope for energy savings and efficiency improvements.
The latest legal changes to the Energy Industry Act (EnWG) present both opportunities and risks for energy suppliers and grid operators, particularly in connection with the rollout of smart meters. In accordance with the updated provisions of Section 14a EnWG, the Federal Network Agency is authorised to define standardised rules that oblige distribution system operators to conclude agreements on the control of consumption devices.1 The grid operator may no longer refuse or delay the connection of heat pumps or new private charging facilities for electric cars with reference to possible local overloading of its grid. In return, if there is a risk of acute damage to or overloading of the grid, the grid operator may reduce the load on the grid by temporarily “dimming” the electricity consumption of controllable consumption devices. This measure must be derived from objective criteria for determining the grid status. The grid status determination represents the current grid utilisation on the basis of real-time measured values. For this purpose, rapid digitalisation of the low-voltage grids, including the collection of real-time measured values, is necessary.2 The aim of this measure is to relieve the electricity grid and reduce grid charges by specifically mitigating consumption peaks. In return for providing this flexibility in the grid, the consumer can choose from various grid fee models that bring considerable savings. The implementation of smart meters plays a central role here, as they allow data to be recorded and transmitted in real time and therefore enable more precise control of energy consumption. Section 13k of the Energy Industry Act (EnWG) in turn contains regulations aimed at increasing energy consumption. From 1 October 2024, operators of transmission grids with control area responsibility must enable authorised participants to use electricity volumes in additional switchable loads in order to reduce the reduction in active power generation of plants due to electricity-related bottlenecks.3 Furthermore, Section 14a EnWG sets out the legal framework for the integration of flexibility services into the energy market. Distribution system operators are now required to procure flexibility services in a transparent, non-discriminatory and market-based manner.4 Smart meters can also play an important role here by providing real-time data on energy consumption and enabling the efficient use of flexibility resources.
The legal changes to Sections 14a and 14c of the Energy Industry Act and the associated smart meter rollout will increase the forecasting and procurement risk for energy suppliers, as the dynamic and detailed nature of the data generated by smart meters requires more precise planning. Energy suppliers must be prepared for the fact that traditional forecasting methods may no longer be sufficient to accurately predict energy demand. Another risk associated with the smart meter rollout is process and system interoperability. The integration of smart meters requires existing processes and systems to be adapted to ensure seamless interaction. This means that existing IT systems and business processes must be adapted so that they are compatible with the new requirements. Despite the risks, the smart meter rollout also offers considerable opportunities for energy suppliers to adapt their business strategies and further develop their range of energy products. With the introduction of smart meters, energy suppliers now have access to a wealth of real-time data that enables them to better understand customer behaviour and develop tailored offers. For example, energy suppliers can introduce innovative tariff structures that are based on the actual consumption behaviour of customers and thus strengthen customer loyalty. The provision of Section 14a EnWG offers energy suppliers the opportunity to seize new market opportunities through controllable consumption devices and to offer their customers advanced energy products and services.
In a rapidly changing energy industry, energy suppliers are increasingly required to develop strategies that efficiently integrate the use of flexibility and smart meters. The strategic implications extend across various dimensions, with operational efficiency and flexible load management taking centre stage.
The introduction of smart meters enables precise measurement and control of energy consumption, which leads to optimisation of operational processes. The availability of real-time data and automated systems helps to increase operational efficiency by enabling more flexible adaptation to the dynamically changing requirements of the energy market.
The implementation of flexible load management strategies not only enables energy suppliers to respond effectively to fluctuations in electricity supply and demand, but also opens up the possibility of introducing innovative pricing models. Dynamic and flexible tariff structures based on real-time demand and supply provide a differentiated offer for end consumers and promote a more conscious use of energy. The example of an electric car with a wallbox illustrates intelligent load shifting. The supplier’s promise to the customer is that the car will be charged the next morning. Through controlled charging and intelligent load shifting, taking into account dayahead prices and forecasts, the car can be charged more cheaply in the early hours of the morning than in the evening. In addition to the savings from optimised energy purchasing, grid stability is also increased. This results in a win-win situation for customers and suppliers.
The aggregation of flexibility services results in further use cases:
The strategic implications also influence key areas such as customer loyalty and satisfaction. Smart meters enable end consumers to monitor their energy consumption in detail and provide energy suppliers with real-time data, which forms the basis for personalised services and customer-specific offers. This strengthens customer loyalty and promotes a transparent and trusting relationship between energy suppliers and their customers. In addition, the detailed data on customer behaviour can provide an opportunity for energy suppliers to optimise procurement.
However, strategic alignment also requires comprehensive consideration of regulatory requirements and active participation in regulatory discussions in order to represent the interests of the company. Energy suppliers should act with foresight in order to do justice to future developments. In addition, a culture of innovation should be promoted and the MVP approach emphasised. For example, it is acceptable that manual billing is temporarily required in order to test and further develop the prototype. Partnerships and collaboration with technology providers, start-ups and other industry players are key to developing innovative solutions and pooling resources effectively.
The introduction of flexibility and smart meters requires a comprehensive strategy from energy suppliers that takes all areas of the company into account. It positions energy suppliers not only for the future, but also to adapt to current market conditions. Agile methods are crucial in order to react quickly to changing requirements. Prototypes in particular allow innovations to be validated at an early stage and competitive advantages to be gained. In addition to an accelerated market launch and successful implementation of solutions, this also enables regular consideration of customer feedback.
Progress in the rollout of smart meters brings both challenges and opportunities for energy suppliers. By thoroughly analysing the fundamentals of the rollout and the current legal changes, important strategic implications can be derived that require a holistic adjustment of the corporate strategy. The integration of flexibilities and smart meters enables more precise control of energy consumption as well as the introduction of innovative pricing models and customised products and services.
Energy suppliers should react flexibly to changing market conditions and validate innovations at an early stage. This can be done by implementing prototypes and continuously taking customer feedback into account. A comprehensive strategy that takes regulatory requirements into account and relies on partnerships is crucial to strengthen the position in the dynamic energy industry and ensure long-term success.
The use of smart meters and flexibilities offers the opportunity to manage energy consumption more precisely while increasing customer satisfaction. By making greater use of real-time data, energy suppliers can adapt their offering and provide their customers with personalised solutions. In addition, the integration of flexibilities enables the creation of new business models and the development of new market opportunities.
Overall, the introduction of smart meters and flexibilities requires a holistic strategy that takes all areas of the company into account and focuses on agile adaptation to changing market conditions. By consistently implementing this strategy, energy suppliers can strengthen their competitive position and secure their long-term success.
