How much progress has digitalization made in Germany? And how could the rollout be accelerated? These are the questions we put to Lars Petereit, Head of Digital Energy Transition and Electrification at the German Association of Energy Market Innovators (bne).
In September 2024, more than one million smart meters had been installed across Germany. This may sound like a lot, but in actual truth this number is disappointing. Germany has around 53 million metering points. These are locations where electricity is measured. In other words, so far only 1.9 percent of metering locations are equipped with a smart meter. This is nowhere near enough, because after all, smart meters are the precondition for making power consumption flexible. Without digitalization there is no flexibility, and without flexibility the energy transition cannot proceed. The digitalization shortfall creates a real problem for the switch to a low-cost power supply and is increasingly threatening system stability.
Germany is lagging behind. Compared with other EU countries, the rollout of smart meters is significantly delayed, placing Germany among the lowest ranks, according to figures by the EU Agency for the Cooperation of Energy Regulators (ACER). The Scandinavian countries, in contrast, set a best practice example with 100 percent smart meter coverage of metering locations. In Sweden and Norway, two thirds of consumers already benefit from a dynamic electricity supply contract based on a spot-indexed tariff, while Germany’s widespread adoption of dynamic pricing remains elusive.
For many applications, the technical requirements placed on smart meters are too high – not everyone needs a Ferrari in their meter box. These requirements must be toned down considerably in the way that other European countries, whose rollout has been successful, have. The German regulations make the rollout complicated and expensive. As a consequence, there is insufficient competition, both when it comes to measuring devices and when it comes to installation services. At the same time, there are plenty of companies who would love to enter the market. With the government-controlled rollout, some 850 German distribution system operators are responsible for the implementation – and they often lack the required know-how and staff.
We need to reset competition-driven digitalization, and this will depend on a comprehensive overhaul of significant portions of the German Act on the Operation of Metering Points. A distinction must be made in the future: According to the legal framework, it must be possible to control energy transition installations, such as solar installations, EV chargers and heat pumps remotely. This necessitates high security requirements to protect against tampering. Smart metering systems are therefore needed. On the other hand, most consumers will not need more than the possibility to have their power consumption measured remotely using a digital power meter without a control component. This is the way to make digitalization happen safely and cost-effectively.