Reducing electricity expenses for consumers by up to 70% possible - "Significant electricity expenses might be slashed by up to 70 percent for consumers"
Germany is lagging behind many of its European neighbors in the deployment of Smart Meters, with less than three percent of households currently equipped with the technology. This slow adoption rate is causing concern, as Smart Meters are essential for enabling dynamic electricity tariffs and facilitating the transition to a more sustainable energy future.
In October 2023, Merlin Lauenburg, 35, was appointed as Germany's managing director of Tibber, a digital eco-electricity provider. Prior to his role at Tibber, Lauenburg worked for the Viessmann Group. He is now leading the charge to address the issues hindering Smart Meter adoption in Germany, advocating for reduced costs and a simplified ordering process.
Countries like Norway and Sweden have already achieved over 90% and 100% Smart Meter penetration respectively. These high rates of adoption are enabling households to benefit from dynamic electricity tariffs, which allow for cheaper electricity during off-peak hours, such as at night. With the potential to reduce electricity costs by 70%, dynamic tariffs could offer significant savings for German households.
However, the slow adoption of Smart Meters in Germany is due to several factors. Bureaucracy, complex processes, and high costs are all contributing to the sluggish rollout. Traditional energy corporations, who make money from static electricity prices, are also resistant to the installation of smart meters, as it contradicts their current business model.
Economy Minister Katherina Reiche has proposed a new ten-point plan for the energy transition, which includes a focus on the digitalization and flexibilization of the sector. Critics, however, argue that Reiche's plan places too much emphasis on gas power plants and not enough on the integration of renewable energies.
Tibber claims that an average household with a heat pump and an electric car could save 300 euros per year with a flexible electricity tariff and a smart meter. The company argues that reducing the costs for intelligent metering systems and simplifying the ordering process could save network expansion costs and make electricity cheaper for everyone.
Reiche must ensure that grid operators who do not meet the quotas for the market expansion of smart meters are penalized, and all processes in this expansion are standardized quickly to catch up with Scandinavia. This is crucial, as Germany is currently losing approximately the annual electricity consumption of Hamburg due to the shutdown of green power when there is too much electricity in the market.
The Metering Point Operation Act imposes high technical requirements and associated costs, making investments in smart meter gateways uneconomical for many network operators. This is particularly problematic for small consumers in multi-apartment buildings, as it slows down digitalization. Countries like Sweden and Denmark have already achieved near 100% rollout.
Smart Meters are a prerequisite for dynamic electricity tariffs, as they provide data on electricity consumption and enable intelligent shifting of consumption. Some providers have demanded over 900 euros for Smart Meter installation alone until recently, which further discourages adoption.
In order to catch up with its European neighbors and reap the benefits of Smart Meters and dynamic electricity tariffs, Germany must address the issues hindering adoption and accelerate the rollout of Smart Meters. This will not only help to reduce electricity costs for households but also facilitate the transition to a more sustainable energy future.
