Abstract: Smart meters are key factors for the deployment of a smart grid as well as the whole smart system. Smart meters should have standardized functionalities that need to be exploited in coordination of grid system, and to ensure the interoperability between different technologies to achieve the maximum benefits from smart devices. As the Smart Grid and Smart Metering market grows, the need of standardization is no longer a national issue. This paper outlines the similarities and divergences between the creation courses of these two standards GSM and Smart Meters, from the motivations to the relevant political incentives, with the aim to judge in which step the EU smart meters standardization is and should follow. In retrospect, the successful GSM standardization process twenty years ago in Europe has provided so many experiences which could be applied to the Standardization agenda of Smart Meters currently in face of EU electricity industry. Keywords : Smart Meters, GSM : EU Standard Policy
1 Associate Professor of Economics, ADIS universit Paris-Sud 11 and Loyola de Palacio chair, EUI. 27 avenue Lombart 92260 Fontenay aux Roses France. Yannick.perez@eui.eu 2 : Research assistant, university Paris-Sud. 2
Introduction Smart meters are links between transmission and distribution networks, the distribution network and house appliances. They are combined with modern communication technologies thus enabling cost-effective smart metering, which is view as a crucial factor for an efficient functioning of electricity market and a successful implementation of policies related to the energy efficiency, renewable energy and security of supply. Smart meters are key factors for the deployment of a smart grid as well as the whole smart system. Smart meters should have standardized functionalities that need to be exploited in coordination of grid system, and to ensure the interoperability between different technologies to achieve the maximum benefits from smart devices. As the Smart Grid and Smart Metering market grows, the need of standardization is no longer a national issue. In the USA, policy makers have driven the smart grid agenda through several key pieces of legislation. The Energy Policy Act (EPA) of 2005 established a policy framework for the deployment of demand response and advanced transmission technologies, and it directed the Federal Energy Regulatory Commission (FERC) to encourage the use of advanced technologies, including those that emphasize demand response, distributed generation and energy storage. In 2007, the Energy Independence and Security Act (EISA) directed the Department of Energy (DOE) to accelerate the development and deployment of smart grid technologies throughout the United States. EISA also directs the National Institute of Standards and Technology (NIST) to coordinate the development of protocols and model standards to achieve interoperability of smart grid devices and systems across the national grid. NIST is now engaged in a public program to develop a framework of interoperability standards on an accelerated schedule. As part of the more recent national economic stimulus efforts, the American Recovery and Reinvestment Act (ARRA) of 2009 decided to allocate 4.5 billion US Dollars of federal funds for smart grid investments and to install 40 million smart meter devices in household in national wide. In September 2009, the U-SNAP Alliance 3 , made up of an initial group of 19 companies, has been formed to work on standards for connecting smart meters and home appliances. Its aims is to create a low cost connector standard to enable consumer products to communicate with any vendors smart meter.
3 Founding members leading the Alliance at the Promoter level and as members of the Board of Directors are Radio Thermostat Company of America and Sensus. Contributor Member include: Comverge, eRadio, GainSpan, GE, Intwine Connect, NURI Telecom, Trilliant and ZeroG Wireless. Influencer Members, consisting of non-manufacturers, namely utilities, includes 4Home, Alliant Energy, Benton PUD, Celestica International, CLECO, LS Research, Niagara-on-the-Lake Hydro, Portland General Electric and Our Home Spaces. 3
In China, the State Grid Company of China (SGCC) also carried out the national technical standards of Smart meter devices in September 2009, in which it is the first time that a clear definition for smart meters is specified, and minimum functionalities are required. In the same year, the State Grid Company of East China initiated the feasibility study of Smart Grid deployment in China, and later carried out a long term plan for the following 20 years. The large scale adoption of smart metering is today hampered by the lack of widely accepted open standards capable of guaranteeing interoperability of systems and devices produced by different manufacturers. And the booming development smart electric system in worldwide has made the EU on the race to set up the standards, not partially on metering devices, but the whole metering system; correspondingly, the adoption of these standards will open up the metering market while at the same time enabling EU industries to take the world leadership. In retrospect, the successful GSM standardization process twenty years ago in Europe has provided so many experiences which could be applied to the Standardization agenda of Smart Meters currently in face of EU electricity industry. Though the aim of standardization of Smart Meters could be different from that of GSM, since the latter are newly created one without the constraint of cost-benefits problems, while for the former, there are already many available international standardization bodies such as IEC and ISO, which should be the basis for standardization to unify technical confusions between market players with generic international (or EU level) technical requirement, there are still many comparable experiences for the benchmarking in Smart Meter Standardization pathway. This paper outlines the similarities and divergences between the creation courses of these two standards, from the motivations to the relevant political incentives, with the aim to judge in which step the EU smart meters standardization is. Section 1 introduces the relationship between the definition of Smart Meter, Smart Metering, and Smart Grid, and their benefits for players in the electricity market. Section 2 summarizes the current situations in EU countries with respect to smart meters deployment and the importance for standardization. And at last, the Section 3 focuses on the success of GSM standards, and those points that could be benchmarked in Smart Metering Standardization process. 1. Smart Meter and Its Benefits 1.1 Definition of Smart Meter and Smart Metering The Smart Meter, often refers to an electrical meter, identifies the consumption data in more detail than a conventional meter; and generally, it communicates that information via some network back to the local utility for monitoring and billing purposes. It usually involves a different technology mix, such as real-time or near real-time sensors, power outage notification, and 4
power quality monitoring. These additional features can improve consumers awareness of actual consumption, and allow them the timely adaptation to their demand. In this case, the term Smart Meters is extended to Smart Metering, which is not restricted to the meter device alone, but also includes the whole system behind it, such as the communication and IT infrastructure connecting the meter and customer and also the meter and the meter control centre, where the meter data is administrated and meters are remotely operated. Smart metering in the context of this definition therefore refers to the entire meter data infrastructure, including as ERGEG (2009) point out: Interval meter data (load profile measurement) Remote meter reading, data processing to market players Remote meter management (power reduction, disconnection, demand management, etc) Measurement of consumption and generation by distributed units Remote meter parameters such as tariff structures, contractual power, meter interval, etc Remote message transfer from market players to the customer, e.g. price signals Information display on the meter and/or communication port for external display Main communication port (GPRS, GSM, PLC, etc.) Power quality measurement (incl. continuity of supply and voltage quality) 4
Sometimes it may be confused; however, smart metering does not provide a Smart Grid, as the latter refers to a broader set of technologies, which is an electricity network that can intelligently integrate the actions of all users connected to itgenerators, consumers and those that do bothin order to efficiently deliver sustainable, economic and secure electricity supplies 5 . 1.2 Benefits of Smart Meters According to ERGEG (2009) Energy efficiency is one of the most cost-effective ways of reducing greenhouse gas emissions. Smart metering is such kinds of technologies that can help to achieve this goal. Basically, with smart meters, consumers can be more accurately informed by their consumption mode, hence they will actively adjust their behavior to reduce their energy cost, for example, they can shift from suppliers to suppliers, from peak loads to off-peak, thereby improving grid operation and future grid planning. Or at a broader picture, the reduction in peak load demand, which is satisfied mostly by fossil fuel technologies, will possibly result in reduced CO2 emission.
4 ERGEG: Status Review on Regulatory Aspects of Smart Metering, 19 th October, 2009 5 Smart Grid platform of EU, http://www.smartgrids.eu/ 5
A more active participation by consumers is not only a goal in itself, but also a possible means to integrate renewable and other more energy-efficient sources of energy in the electrical network. Enabling a demand response makes retail and wholesale markets more efficient as well as helping to meet the EUs sustainability goals. For the DSOs, smart metering systems allow interval metering for both active and reactive energy, consumed and injected into the network, thereby contributing to more accurate balancing, losses and cost calculation, in order to promote peak/off-peak prices and to discourage bad practices in the use of the network. This means smart metering will provide DSOs with a tool to detect fraud faster and to predict electricity flows more accurately. Moreover, new smart metering technologies will permit remote connections and disconnection by reducing the costs associated with technicians visiting customer premises; and will provide information on quality of supply at each connection point, contributing to more effective investments and grid renovation plans, thus increasing security of supply. For the suppliers side ERGEG (2007) point outs that since they should compete by offering customers different electricity prices which apply at different times of the day, with smart metering they can target certain groups of customers with particular tariffs that would be most economical. 2. Initiatives for Standardization of Smart Meters 2.1 Definition of Standards A standard might simply be defined as a set of rules for ensuring quality. The ISO/IEC Guide 2/1996, definition 3.2 defines a standard as 4 : A document established by consensus and approved by a recognized body that provides for common and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context. From the perspective of European Telecommunications Standards Institute (ETSI) 6 , Standard is defined as: A technical specification approved by a recognized standardization body for repeated or continuous application, with which compliance is not compulsory and which is one of the following: international standard which is adopted by an international standardization organization European standard which is adopted by a European standardization body
6 ETSI Website: http://www.etsi.org/WebSite/Standards/WhatIsAStandard.aspx 6
National standard which is adopted by a national standardization body and made available to the public. Standards meet the goal of creating a common basic understanding of a technology. Without standards, products might not work as expected. They may be of inferior quality and incompatible with other equipment, and in extreme cases, non-standardized products may even be dangerous. By contrast, technologies, products or services in compliance with the standards are perceived as safe, healthy, secure, high quality, flexible, and widely accepted. The evidence of GSM standard is such a good proof, since it facilitates mobile communication the world over, and brings important benefits to relevant business actors for technology innovation. While for Smart meter, its efficient innovation process should include a large set of different technologies such as metering devices and communication gateways. Therefore in this context, the interoperability and the interchangeability of components are in need of the definition for open standards. Practically, standards should ensure that a meter will be open to integrate new services, host innovations of manufacturers, and manageable during its whole lifecycle. 2.2 Current market situations in EU The deployment of smart meters in EU wide is complex for many historical reasons. Since metering service involves various tasks such as purchasing, installment and maintenance of the meter, metering data collection, management and provision of metering data to other market players, and each responsibility can belong to a different player. Under this situation, the cost-benefit analyses for the deployment of smart meters are complicated by the fact that different stakeholders may benefit from and bear the costs of the introduction of the smart meter technology. For example, for the responsibilities of devices provision, if it is consumers that offer the meters, they may be less willing to escalate their metering devices. Or if it is the supplier retains the ownership of the meter, when the consumer shifts to another supplier, the previous supplier may face a potential stranded asset risk. Table 1 outlines the current meter provision status in EU 27 countries. Another problems lies in the incompleteness of market opening which also resulted in confused responsibility between each market players. For instance, in most EU countries, such as Austria, Cyprus, Denmark, Finland, Greece, Hungary, Poland, Romania, etc 7 , where metering services are still regulated, the metering activities remain the exclusive responsibility of the network
7 Source: Jorge Vasconcelos, Survey of Regulatory and Technology Development Concerning Smart Metering In the European Union Electricity Market, 2008 7
operators or meter service provider. Then metering is treated as part of the overall network business and is remunerated as part of the network price control. Then as pointed out by ERGEG (2007) the increased costs of the metering assets have been included in the network operators regulatory asset base. In liberalized market, such as Germany, UK, and Netherlands, the metering service is open to competition, the meter could be owned by the customer, the retailer or the DSO 8 ; meter installment could be carried out by the DSO, but meter data collection, management and provision are serviced by the DSO or by a third party. In these cases, the cost-benefit analyses for the deployment of smart meters are complicated by the fact that different stakeholders may benefit from and bear the costs of the introduction of the smart meter technology. ERGEG (2007) highlights that : it is important to have a regulatory framework, with special attention to the issue of cost recovery, together with a specification of the expected impact on different market players. Table 1 Ownership of electricity meters in EU countries Countries Consumer Distributor Metering Company Supplier Third Party 1 Austria 2 Belgium X X 3 Cyprus X 4 Czech Republic 5 Denmark X 6 Estonia X 7 Finland 8 France X 9 Germany X X 10 Greece X 11 Hungary 12 Iceland 13 Ireland X 14 Italy X 15 Luxembourg X 16 Netherlands X X 17 Poland X X 18 Portugal X
8 See Table 1 8
19 Romania X X X X 20 Spain X X X 21 Slovak X 22 Slovenia X 23 Sweden X 24 UK X X X X Source: Jorge Vasconcelos, Survey of Regulatory and Technology Development Concerning Smart Metering In the European Union Electricity Market, 2008
2. 3 Conflicts between Multi -parties Data availability Smart meters offer the possibility to collect much more data (including personalized data) than before. However, to realize all the benefits brought by smart meters, it is crucial to keep the party who is responsible for making data accessible to all other authorized market players in a non-discriminatory way in addition to keeping the data privacy. But due to historic reason, the incomplete unbundling in most countries results in an availability of market data to third parties, which make the basic principle of non-discriminatory data access less satisfactory. Almost all the DSOs, who are still the principal meter devices provider, have the access to most types of data. While in some countries, as Czech Republic, the metering company as well as the DSO, also has the access to the customers data. For customers, generally they have access to their data primarily through bills, such as the energy price, the energy charge per kWh, and the historical load curve, while information on electricity quality is rarely provided. Technical interoperability In order to allow for economic optimal solution and technical innovation, the definition of minimum requirements for functions, interfaces and standards, is a key element of a regulatory framework for an efficient and working smart metering system. ERGEG (2007) recall that : AMM systems should have functional and performance characteristics that offer the same minimum options to all customers (household, non-household), whether they remain under a customer protection scheme or opt to switch to a new retailer. Minimum requirements should apply at system level rather than equipment level, to render them independent from the architectures used by operators or recommended by AMM system vendors, thereby preventing the rejection of solutions whose architectures or philosophies may be different. 9
2.4 National Status for Smart Meters deployment National roll-out policies is one of the decisive factors for Smart Meter deployment, while currently only few member states have carried out public policies. Figure 1 indicates the situation of electricity smart metering public policies in EU27 Member States 9 from fully implementation of roll-out policies to no relevant policies 10 .
Source: (1) ERGEG: Status Review on Regulatory Aspects of Smart Metering, 19th October, 2009 (2) Jorge Vasconcelos: Survey of Regulatory and Technology Development Concerning Smart Metering In the European Union Electricity Market, 2008
There are many pioneer countries among which are: Italy, Sweden, Finland, Spain, and Greece. For example, Italian regulatory authority has mandated full introduction of smart meters according to established minimum functional requirements in 2006 after its voluntary meter replacement program launched by the incumbent utility ENEL in 1990s. Currently, Italy has already achieved 86% of smart meters, and it is planning to substitute 100% of the meters with smart meters by the end of 2011.
9 The results exclude Bulgaria. 10 The column No policies or Pilot projects refers to countries currently dont have any roll out plans, but most of them have pilot projects to decide on a roll out smart meters, including Belgium ,Cyprus, Czech Republic, and Luxembourg. Figure 1 Roll-out policies Situations regarding Smart Meters in EU Member States
Figure 1 Mapping the Status of EU Smart Meters Roll-out Policies 10
3. Experience from European GSM Standards 3.1 GSM Standards The original intention for GSM standardization came from the technological aspects. In 1980s, more than half a dozen different radiotelephone systems were (and some of them still are) used in Western Europe. Even up to the early 1990s the cross-border use of a mobile telephone was hardly possible in Europe. The consequence of this large number of different technologies was a highly fragmented market and relatively small national markets. The high R&D costs for the infrastructure resulted in extremely high prices for end-users. Therefore, mobile telephony was a service only offered in niche-markets to very well-off and mostly commercial users. Since the network of GSM is based on cellular network, and both its signaling and speech channels are digital (GSM is considered a 2G mobile phone system), the mobile phones can connect to it by searching for cells in the immediate vicinity through wireless link. Therefore, consumers may benefit from the ability to roam and switch carriers without replacing phones, and also to network operators, who can choose equipment from many GSM equipment vendors. GSM also pioneered low-cost implementation of text messaging, which has since been supported on other mobile phone standards as well. GSM (French: Groupe Spcial Mobile; English: Global System for Mobile Communication Group) is the name of a standardization group that was established in 1982 in an effort to create a common European mobile telephone standard that would formulate specifications for a pan-European mobile cellular radio system operating at 900 MHz. The idea behind this decision was to create, for the first time, a system that would end the traditional European fragmentation and incompatibility in the mobile field. 3.2 Similarities of standardization area between GSM and Smart Metering From technological sides, interoperability is at best an aspiration of the community that developed the standard both for GSM and for Smart Meters. Figure 2 and Figure 3 indicates the configuration similarities between GSM Standards and Smart Metering Standards, where the importance of interoperability can be easily found in their communication interfaces. In Telecom industry, the cellular networks interconnected to fixed networks offered a perspective of personal communications services (PCS) for a virtually unlimited community of mobile users, each linked to the fixed network infrastructure by a wireless link, granted to active subscribers only for the duration of their call.
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While for a Smart Meter, generally, the intelligence is incorporated with the possible communication infrastructures, among which are Power Line Carrier (PLC, using the existing electricity grid), a wireless modem (GSM of GPRS) or an existing permanent internet connection (ADSL). Hence as an interface between customer and other market participants, communication interfaces play a key role on the overall functioning of electricity market. However, depending on the technical functionality, those various communication interfaces should order to ensure interoperability between different players and different applications. For this case, the use of standards for technical level is important. To render the devices of different Figure 3 Smart Metering Standardization Area, according to Mandate M/441 issued in March 2009 Figure 2 GSM Network Standardization Areas 12
manufacturers which are compatible from the communication point of view, they must adopt the same standards for: 1) Physical layer for data transmission such as GSM, ADSL, PLC 2) Data link layer for addressing and reporting mechanism, and error control 3) Application layer such as network management and detection of new stations For example, the communication protocols between meters and control centers would be in uniform standard, since suppliers and customers with smart meters should not face technical barriers to interaction. 3.3 Similarities from the perception of business size One of the key successes for GSM standardization was its strong perspective of a fast-expanding market which was guided by customer needs, the increasing demand for a high innovation rate and product diversification. As a result, the question of human acceptance of new technology had become a factor of increased importance. In this connection, it was pointed out that the response to high-technology had been the evolution of a highly personal value system to compensate for the impersonal nature of technology. Smart meters are such kind of customer friendly meters, which represent the future tendency. For instance, the smart meter systems provide the possibility of a two-way data communication and remote management of customer demand/supply, such as communication between authorized market actors and the meters for tariff changing, demand reducing, the communication between consumers and meters for sending price signals. According to a new report from Pike Research 11 , more than 250 million smart meters will be installed worldwide by 2015, representing a penetration rate of 18% of all electrical meters and a 3.9 billion US Dollars global market by that time, up from 46 million in 2008, and 76 million in 2009. Moreover, many statistic studies have shown that in the electricity sector, there are a number of frontrunner countries where the percentage of smart meters is already significant, for example, in addition to Italy mentioned before, Denmark, Spain and Finland are planning to reach significant percentages of installations of 13%, 65%, and 60% in year 2010, 2015, and 2015 respectively. 3.4 Timely maturity of relevant technology
11 Pike Research is a consulting firm that provides in-depth analysis of global clean technology markets. Information is available on www.pikeresearch.com 13
For any standards setting, the practical feasibility of intended specifications had to be tested before they could be fixed. The maturity of pertinent technology is such premise that enables the standardization and facilitates the market development. In cellular technologies of GSM network, the access cost can be dynamically shared by all users in a cell, thus it is no longer required for dominant investment in static transmission plant. And accordingly, the monopoly profits and subsidization for fixed local loops 12 within the public telephone network are invalid in cellular networks. Cellular technologies reverse the costs structure of providing user access, thus they can be developed and sustained under competition. While establishing the proper collective radio culture maximizes the public utility of mobile systems, notably in terms of system capacity, cost reduction and unhindered user roaming across the borders between different operators and countries, and a suitable choice of spectrum policy increases the market size for candidate network technologies (later on the 3G network implementation). In Smart Metering area, it is composed of three main parts: the historical and necessary part as the metrology, the communication path from the meter to the front end, and the management system. In fact, with the smart meter, the communication network and the automated management system become more important when adding functionalities 13 . ERGEG (2007) assume that the functions performed by smart metering are technologically feasible and mature, at least for the electricity sector. Many manufacturers can supply competitive solutions, based on different functionalities, architecture and telecommunication systems. If you look at the planned U.S. utility smart meter contracts, there are about 5 big companies fighting for market share in the U.S. right now, including Itron, Landis+Gyr, Sensus, Elster, and GE 14 . The Italian case (roll out of approximately 30 million smart meters at residential customers) and numerous demonstration projects in other countries show that the technology (smart meter, infrastructure, and data processing) is mature and can be implemented on a large scale. 3.5 Political framework
12 See the orange rectangular in Figure1 13 ERGEG (2007) recalls that : the communication port PLC requires the installation of data concentrators in MV/LV substations of the electricity distribution networks, which communicates with smart meters by using the low-voltage distribution grid as a means of communication and with the control centre through public telecommunications systems 14 Institute for Electric Efficiency: Utility-Scale Deployment of Smart Meters, February 2009 14
The most extensive point of interest on GSMs success was related to ongoing institutional change within telecommunications. On June 25, 1987, two acts related to the GSM system were ratified. Council Recommendation 87/371 emphasized stimulating the process for the creation of technical standards for the infrastructure and terminals, obtained fully coordinated approval for the implementation of the GSM system and promoted the usage of hand-held terminals. As for smart metering, political attention more than ever has been paid to it. At European level, there are already several legislative acts referring to smart meters. Directive 2004/22/EC on Measuring Instruments (MID) concerns the full harmonization of utility meters. It allows all functionalities that do not interfere with the metrological characteristics of the instruments. Most of these functionalities are not subject to any other limitations, i.e. MID allows any specification to be put into use. By means of Standardization Mandate M/374 on 20th of October 2005, CEN and CENELEC were invited to develop standards for utility meters. Directive 2006/32/EC on energy end-use efficiency and energy services (Article 13) mentions the use of advanced metering systems to improve energy efficiency awareness and to better inform customers about their own consumption. On 12 th of March 2009, the Standardization Mandate M/441 on development of an open architecture for utility meters was accepted by ESO in July 2009. This Mandate aims to ensure European standards that would enable interoperability of utility meters, which improve customers awareness of actual consumption to allow timely adaptation to their demands. More precisely, the objective is to permit fully integrated solutions, modular and multi-part solutions, and architecture must be scalable and adaptable to future communications media. But standardization in this context does not mean imposing identical solutions on all projects in the Member States, but to ensure that what a Member States may want to do in smart metering is covered by suitable standards. Therefore, Member States can have their own priorities to take solution out. In addition, the recently adopted Directives 2009/72/EC & 2009/73/EC of the 3rd Package will also have an impact on the deployment of new metering systems, by requiring Member States to ensure the implementation of intelligent metering systems that shall assist the active participation of customers in the electricity supply market, subject to a positive cost-benefit analysis. ERGEG (2009) precise that customers shall also be informed of their actual consumption and costs frequently enough to enable them to control their own electricity consumption. 3.6 Creation of regulatory body 15
The existence of a group of international champions of the GSM concepts is also a decisive reason for its success. The meeting held in June of 1982 in Vienna by CEPT (French: Confrence Europen de Postes et Tlcommunication, English: European Conference of Postal and Telecommunication Administrations) was with the aim of creating a system that would end the traditional European fragmentation and incompatibility in the mobile field. During this conference, a study group called GSM was set up to work out specifications for a pan-European cellular communication system for the 900 MHz frequency band which had recently been allocated to land mobile use. Figure 4 demonstrates the structure of GSM regulatory body, under which eight working parties were clearly defined with different responsibilities. Figure 4 Structure of GSM Plenary (May 1988)
While for the smart meters deployment, the competitiveness Council on 25 September 2008 underlined that the need for standardizing bodies to act in a coordinated manner to promote European Standards, to take better account of convergence of technologies and to involve all parties concerned in a transparent manner. The Competitiveness Council invited industry and other stakeholders to accelerate their cooperation in the development, implementation and use of standards supporting innovation in relation to the sustainable industrial policy and other areas particularly relevant for innovation. In order to address these challenges, the European Commission and EFTA (European Free trade Association) addressed Mandate M/441 to CEN GSM Plenary WP1 1 WP2 WP3 PN WP4 SEG PP SCEG S e r v i c e
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(European Committee for Standardization), CENELEC (CENELEC, The European Committee for Electrotechnical Standardization) and ETSI (European Telecommunications Standards Institute). A Smart Meters Coordination Group (SM-CG) was set up to answer this request. Following a first meeting of the SM-CG in May 2009, the members of the group agreed to establish two advisory groups to address Mandate M/441: 1 Ad Hoc Group Communication which will look into a European Standard comprising a software and hardware open architecture for utility meters that support secure bidirectional communication upstream and downstream through standardized interfaces and data exchange formats and allows advanced information and management and control system for consumers and services supplier. 2 Ad Hoc Group Additional Functionalities which will look into defining standards that contains harmonized solutions for additional functionalities within an interoperable framework using where needed the above-mentioned open architecture for communication protocols. These solutions must be standardized to achieve full interoperability identified as: Remote reading of metrological registers and provision to designated market organizations; two-way communication between the metering system and designated market organizations; supporting advanced tariffing and payment systems; allowing remote disablement and enablement of supply; communicating with individual devices within the home / building; and providing information via web portal/gateway to an in-home / building display or auxiliary equipment. The SM-CG held its second meeting on 28 September 2009. Both AD Hoc groups on Communication and Additional functionalities presented the results of their respective work. The first SM-CG report was issued in December of 2009. It constitutes an extensive survey of the current standardization landscape as regards smart metering, proposes specific recommendations for the organization of the standardization work (responsibility allocation), and suggests a list of common additional functionalities. 3.7 Defining the main actors A driving force behind GSM development should be given to the ability of a relatively small group of actors, which consisted of: National Telephone Operators, the GSM Group, National Governments, international cooperation bodies (European community, CEPT and ETSI), manufacturing industries, and users. Each player had a specific area of responsibility. More precisely, the key success point should be dedicated to those actors from main countries. They make the crucial decisions for the take-off of the system, by committing themselves and creating a critical mass of consensus towards its implementation. For example, these countries were 17
willing to invest in the GSM system. However, the potential market was in fact far bigger if one takes into account the number of less active countries. It was quite obvious that existing and planned cellular systems gave positive feedback on the activities of the participating countries, because both groups were nearly equal. As the concept of Personal Communication was assimilated with the GSM system, this group was bigger than in earlier cellular projects, and it was able to provide a large enough base for a new standard for the globalization" of the GSM system, which included many non-European companies such as Bell Communications Research(Bellcore). In Smart meters standardization process, the advisory body is composed on representative organizations of consumers interests (ANEC), environmental protection (ECOS), workers (ETUI-REHS), Small & Medium enterprises (NORMAPME), authorities of member states (WELMEC), and the OPEN (Open Public Extended Network) Metering Project, to take part in the standardization work. The OPEN Project is the European social partners for Smart meter Standardization. And its main objective is to specify a comprehensive set of open and non-proprietary public solutions for AMI based on the agreement of all the relevant stakeholders, and to take into account the real conditions of the utility networks so as to allow for full implementation. The result of the project will be a set of draft standards, based on already existing and accepted standards wherever possible. Figure 5 indicates the seven working packages which are aligned with M/441 Mandate, with great comparability to GSM Plenary. As for the main participating countries for this standardization process, since there are already many available relevant EU and international standards which could be applied for smart meters (in opposite to GSM standard which was a newly created one at that time), there is no need for them to make the crucial decisions for the take-off of the system, such as the debate in defining the frequency in GSM standards, but instead, many pioneering countries like Italy and Sweden, can provide their experiences as positive feedback for other participating countries.
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Figure 5 Sub Working Packages carried out by OPEN Project 15
3.8 Defining the requirement and priorities The standardization of GSM network is a set of technical specifications based on negotiation method, and central players of NTAs and NTOs are from multinationals with regulatory rules and knowledge of uses. The requirements for the standardization were categorized into five classes: services, quality of service and security, radio frequency utilization, network aspects, and cost aspects, in a manner of implementation as no single international network, but nationally compatible systems. And technical specifications priorities were given to the most common services at the beginning of January 1991 at the launch of the GSM system, while only afterwards, the supplementary services were prioritized, such as micro-cell, extension bands, standards optimization , SIM functionalities, local routing, and roaming between GSM 900 and GSM 1800.
15 Nicolas Arcauz: Open Public Extended Network metering Second Workshop: Project Update, 4 th February 2010, Brussels Smart Meter Plenary for Pre-Standardization WP1 WP2 WP3 WP5 WP4 WP7 WP6 F u n c t i o n a l
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While for Smart meters, services are classified as communication part and additional function parts. Standards for communications are not a best practice solution or recommendations but an interoperability and quality statement for technical solutions. And additional functionalities are expressed in broad terms, so they can be related to electricity, gas, heating/cooling and water. But not all functionalities will necessarily feature in all applications and in all Member States Moreover, these two kinds of services differ from country to country, since each countrys regulator should single out their objectives with particular focus on relevant benefits. For instance, if peak shaving is the main driver for smart meter deployment, the expected cost savings derived from generation and network investments deferral should be quantified first. Thus international regulation becomes national standards. 3.9 The agenda setting GSMs success has been explained based on correct timing, with key decisions close enough to provide positive feedback and expectation of success. The general time frame of this process could be divided into three phases, each with strict timing limit for multi-parties to fulfill. Phase 1 was from 1982 to 1985, during which the GSM Committee was formed, and it defined the feasibility to attain adequate certainty to the standard-setting phase. In this phase, the GSM Group was defined as being a coordinator, and its most urgent task was to chart the work and studies carried out or planned by all possible organizations in order to launch studies in missing areas. Phase 2 covered a period from early 1985 to late 1991, with main task to define technical specifications. The GSM organization in this phase was transformed into an active central player. It also created a body for cooperating with manufacturers, whose specific competence became valuable during the shaping of the recommendations. To carry on all these tasks, a Permanent Nucleus (PN) was established in the fall of 1985. The task of the GSM Committee then was only restricted to technical issues, while the commercial aspects had not become infiltrated. And after being approved by the supreme standardization body, the implementation and commercial deployment of the GSM system began, which was Phase 3, in 1991. From a national perspective, if counting from the date of the Directive 2004/22/EC on measuring instruments (MID), till the M441 mandate in March 2009, there were many leading countries already actively moved forward than the feasibility study phase, since they already carried out a national roll-out policy regarding smart meters. The policy includes a national political driver, time frame and cost-benefits analysis with demand expansion studies. For example, Finland, Greece, Italy, Spain and Sweden are proceeding to a roll-out of electricity smart meters and they have some type of legal framework on the implementation of smart 20
metering. As show in ERGEG (2009) in four of these countries, an explicit roll-out-plan has been officially decided, while in Sweden the roll-out is implied by the meter reading frequency obligations. The roll-out policies are under discussion of 12 countries including France, Germany, Portugal, Austria, etc. While for the EU level standardization, the formal acceptance of M441 by ESO in July 2009, can be considered as the standardization path has moved to the Phase 1 in EU wide, with the main aim to define the feasibility study such as: the formation of Smart Meter Coordination Group; setting up two ad hoc groups for ICT and supplementary services respectively; and proposition of the first SM-CG report composed of current standardization landscape, specific recommendations and list of additional functionalities. The next step will be carried out after the next SM-CG meeting in June 2010 in Brussels. By then, the SM-CG Report aforementioned will be submitted to EC, and a Chairman Advisory Group for coordinating two Ad Hoc Conveners and TCs Chairs will also be set up to ensure the follow up of the recommendations indentified in the SM-CG Draft Report and the smooth coordination and cooperation between relevant technical bodies.
Conclusion Generally, the success of GSM lies in a progressive evolution path, with mature technologies and step by step institutional adjustment to ensure the implementation of GSM standards. If applying the pathway of GSM Standard to Smart meters, after analyzing the motivation of standardization, the maturity of relevant technologies, potential market studies, corresponding political policies, and many regulatory achievement (creation of regulatory bodies, agenda setting, definition of priorities, etc), it appears that the current status of Smart meters is moving to Phase 2, since standardization of Smart meters is no long a mere armchair strategy, but many practical actions have been carried out both in EU and in national level.
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Glossary [1] AMM: Automated meter management [2] ARRA: American Recovery and Reinvestment Act [3] CEN: European Committee for Standardization [4] CENELEC: European Committee for Electrotechnical Standardization [5] CEPT: Confrence Europen de Postes et Tlcommunication /European Conference of Postal and Telecommunication Administrations [6] DOE: Department of Energy [7] EFTA: European Free trade Association [8] EISA: Energy Independence and Security Act [9] EPA: Energy Policy Act [10] ETSI: European Telecommunications Standards Institute [11] FERC: Federal Energy Regulatory Commission [12] NIST: National Institute of Standards and Technology [13] NTA: National Telecommunication Administration [14] NTO: National Telecommunication Operator [15] OPEN: Open Public Extended Network Metering Project [16] PLC: Power Line Carrier communication [17] U-SNAP Alliance: Utility Smart Network Access Port [18] SGCC: State Grid Company of China [19] SM-CG: Smart Meters Coordination Group
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Reference [1] ERGEG: Status Review on Regulatory Aspects of Smart Metering, 19 th October, 2009 [2] ERGEG: Smart Metering with a Focus on Electricity Regulation, 31 st October, 2007 [3] Ignacio J. Prez-Arriaga: Regulatory Instruments for Deployment of Clean Energy Technologies, July 2009 [4] John F. Caskey, Smart Meters: The American Perspective, 24 th February, 2010 [5] Daniel Hec: Responding to the EU Mandate M/441 on smart metering standards in Europe, 24 th February 2010, Workshop on Standards: Better regulations and innovation, Madrid [6] Johannes Stein: Update on the European context in the field of smart grids and on ongoing and/or future standardization activities, 24 th February, 2010, Madrid [7] Arturo Lorenzoni : The importance of Demand Response and Real Time Pricing for electricity, European Energy Institute, Block 5, week 2, 2007, University of Padua and Bocconi University, Italy [8] CEER&ERGEG: Smart Grids and smart energy regulation can help implement climate change objectives [9] Pol-Kumar Cuvelier and Philippe Sommereyns: Proof of Concept Smart Metering, 20 th
International Conference on Electricity Distribution, Prague, 8-11 June 2009 [10] Rob van Gerwen, Saskia Jaarsma and Rob Wilhite, Smart Metering, July 2006, Netherlands [11] Jorge Vasconcelos: Smart Metering: An Overview of Technological and Regulatory Challenges, New Energy Solutions, Florence School of Regulation, February 6 th , 2009 [12] Jorge Vasconcelos: Survey of Regulatory and Technological Developments Concerning Smart Metering in the European Union Electricity Market, 2008/01RSCAS Policy Papers, Florence School of Regulation [13] Ari.T.Manninen: Elaboration of NMT and GMS Standards from Idea to Market, University of Jyvskyl, 2002 [14] Sangram Gayal: Comparative analysis of GSM and CDMA technologies: A Security Perspective, Network Security Solutions Ltd. Pune [15] Gerd Bender: Shaping Technology as a Means of Transforming Society: The Case of the GSM Standard for Mobile Telecommunication, Science Studies, Vol. 12(1999) No. 2, 6482 23
[16] Jens C. Arnbak: Technology Trends and their Implications for Telecom Regulation [17] Christopher Drane, Malcolm Macnaughtan, and Craig Scott: Positioning GSM Telephones, University of Technology, Sydney, IEEE Communications Magazine, April 1998 [18] Rudi Bekkers, Geert Duysters and Bart Verspagen: Intellectual property rights, strategic technology agreements and market structure: The case of GSM, Research Policy 31 (2002) [19] Moe Rahnema: Overview of the GSM System and Protocol Architecture, IEEE Communications Magazine, April 1993 [20] Joseph Fagan, Michael Hindus, and Michael Murphy: From Policy to Implementation: The Race to Build a Smart Grid, May 7, 2009 [21] Institute for Electric Efficiency: Utility-Scale Deployment of Smart Meters, February 2009, available on www.edisonfoundation.net/iee/issueBriefs/SmartMeter_Rollouts0209.pdf [22] Nicolas Arcauz: Open Public Extended Network metering Second Workshop: Project Update, 4 th February 2010, Brussels