Ontario Smart Meter Deployment Project

By smartgrider In Advanced Metering Infrastructure, Case study Posted 2014-07-19

The Netherlands

Market structure:Liberalised market structure: network operators and energy retailers unbundled. Energy production, trading and retailing have become commercial activities. Smart meters are owned, installed and maintained by the public distribution system operators
Number of retail customersAppr 7.0 million
Electricity consumed-2011Over 120 TWh
Peak Demand for Power-201117 MW in the transmission lines -Tennet TSO figure updated in 2013
Net Revenue to Distribution Companies€32.693 million Euro.
Distribution Network• Electricity: 309.502 km
• Gas: 135.229 km
• Heat: 4.894 km
ContactHenk van Elburg.
Senior consultant, NL Agency,
Ministry of Economic Affairs.


Ontario Smart Meter Deployment Project

In 2011 the Dutch parliament accepted a revision with respect to the smart meter in the Dutch Electricity Act andthe Gas Act. This revision mandates net operators, who are the owners of the smart meters, to offer households and small businesses a smart meter with minimal functional and technical requirements. Actually this entails two meters, one for electricity usage and one for gas. The smart meter rollout takes place following a two-stage approach. From 2012 until 2014 a small-scale rollout is in place for experience purposes. During the small-scale rollout, up to 500.000 smart meters for electricity and gas will be installed in cases of regular meter replacements (e.g. depreciation), newly built houses, large scale renovations and on request by customers. Based on these experiences, from 2014 the rollout will continue on a larger scale, eventually offering every household (and small business) a smart meter. The aim is to have a smart meter fitted in at least 80% of households and small businesses by 2020, as mandated through the 3rd Energy Package.

When offered the opportunity of receiving a smart meter, households and small businesses have a legal choice in accepting this meter, ranging from having no smart meter at all to a smart meter fully equipped to provide interval data to the network operator for self chosen energy management services. For privacy reasons when accepting a smart meter, the customer subsequently has to authorize the network operator to automatically collect consumption data for requested purposes such as bimonthly energy reports, annual billing, switching supplier and moving home.

The revised law also mandates energy suppliers to provide consumers with bimonthly home energy reports as a standard feedback service. Additional regulation has been developed to set out the minimum information requirements for these energy reports. Providing consumers with more detailed smart metering feedback services for household energy management such as displays and internet applications however are considered to be a market responsibility without regulation. The customer is free to choose and authorize any commercial service provider offering (real-time) smart meter data based information services beyond the minimum regulated level. In order to give market players access to the measurement data, the network operators have set up uniform authorization and authentication procedures. These procedures ensure that individual measurement data is only used for the specific purposes for which the customer has given his or her consent.


Objectives & Benefits

The goal of the two-year small scale phase is to gain experience with and detect bottlenecks in an early stage before the next phase, the large scale roll out of smart meters in the Netherlands. The Dutch Energy Regulator (named Nma) supervises the rollout and the consumer satisfaction with installation and issues for example related to privacy protection and security issues. Additionally, NL Agency (part of the Ministry of Economic Affairs) monitors consumer energy savings and economic developments that are expected to come with the introduction of smart meters and new service providers.

In the Netherlands the smart meter roll out is part of a broader new energy market model for domestic and small business users. Apart from the desire to correct and avoid administrative problems, following the liberalisation of the Dutch energy market in 2004, other main drivers were to stimulate competition in the energy market (e.g. easy switching for consumers between suppliers), improve operational efficiency for market parties and support energy savings for end use users. Demand response related objectives, such as limiting consumer peak load demand on hot summer days, played a less important role because of the temperate climatic conditions. The Dutch tariff system today has been based primarily on fixed rates. The only basic and static form of demand response in the Netherlands so far is the option to choose a meter that allows a fixed switch between two tariffs: day and night/weekend tariffs. However, it is expected that the rollout of smart metering in the Netherlands will encourage some introduction of commercial based flexible tariff schemes. Except for these national reasons, the legal roll out proposal was also designed to meet the requirements of the European Energy End-use and energy Services Directive (ESD, 2006/32/EC). The Dutch government states Article 13 is a claim for smart meters and bi-monthly home energy reports.


Planning for Success & Making the Business Case

The Dutch deployment plan for smart meters took advantage of earlier experiences with smart meter out roll in Western Europe, notably Sweden and Italy were the percentage of smart meter penetration and acceptation is close to 100%. Also the UK and Spain developed plans for a 100% roll out of smart meters. Although privacy issues are recognised in Europe, the have not played such a prominent role as in the Netherlands. The reasons for this are not entirely clear except that it is part of a process of growing awareness.

The estimated energy savings in Western Europe range from a few percent to exceeding 10%. Other savings include costs for call centers and meter reading. Furthermore a positive effect is expected on comparing energy retailers by households and switching between them. In 2010 DNV KEMA calculated that in a standard situation of 100% smart meter acceptation and smart meter reading there is a positive business case of 770 million euro net worth. An important condition however is that in case 20% of the households accept the smart meter but refuses the smart meter read out, this business case is seriously compromised, while the households still have the benefit of the digital port. This and the additional costs for security and privacy issues are important modifications to previous calculations made in 2005 by the DNV KEMA (see note 1).


Current Status & Results

As already mentioned, the rollout of smart meters in the Netherlands officially started in 2012 following a two-stage approach. From 2012 until 2014 a small scale rollout will take place for experience purposes. The small-scale rollout will take place only in case of regular meter replacements (e.g. depreciation) or new meters to be placed in newly built houses and finally renovated houses and new meters on request by customers.

Part of the small-scale experience phase is a national monitoring programme to provide evidence and insights in the expected energy saving effects following the introduction of smart metering. By order of the Ministry of Economic Affairs, NL Agency designed a monitoring programme to assess the effects in household energy consumption and support the upcoming decision for an optimally designed universal full smart metering rollout. In order to draw practical lessons on the experience and expertise of relevant (market) actors, a suite of large and scientific designed trials across the country is now being assembled in close cooperation with the Dutch public network operators. Following similar national trial programmes in the UK (EDRP) and Ireland (CBT), the Netherlands is the third EU-Member State to perform such a series of consumer trials to deliver differentiated evidence for the energy efficiency potential to a range of smart metering based feedback methods on energy consumption and associated costs and to contribute to balanced decisions favouring the future rollout of smart meters. The Dutch monitoring program covers the largest and statistically most robust smart metering behavioural trials conducted nationally to date and are expected to provide a wealth of public available information on the impact of smart metering enabled initiatives on Dutch electricity and gas consumers.

The monitoring program distinguishes two types of informational stimuli for dual fuel metering (electricity meters and gas smart metering leveraging the electricity smart metering communications infrastructure).

1. Effect of cost and consumption overviews

On the one hand, the programme will focus on the actual measurable reduction effects in customers’ electricity and gas demand achievable through the use of smart meters in combination with bimonthly home energy reports. The reports will be required to give a comprehensive account of the customer’s energy usage and associated costs. Part of this will be a comparison of the customer’s consumption with the equivalent period in the previous year, and a comparison with the consumption of their peer group. These comparisons should be provided in graphical format where practicable. This is similar with the informative billing requirements in the EU Energy Efficiency Directive (2006/ 73) although the informative statement need not necessarily be paper-based.

For the effect monitoring of the home energy reports, a representative sample of over 30,000 anonymous residential electricity and gas consumers with smart meters throughout the country will be involved in the trial. A control group, made up of app. 300.000 consumers with traditional meters and who are not provided with any additional information about energy consumption, will be included by the statistical advisors to ensure a robust experimental trial design. Their energy consumption will be recorded as well to enable comparisons with the households that have received interventions under the trial programme.

2. Effects of additional information stimuli

On the other hand, a suite of additional smart metering services trials is programmed to investigate the behavioural and potential measurable reduction effects in customer electricity and gas demand achievable through the use of smart meters in combination with other (free market) energy monitoring and managements systems. These interventions include in-home displays, web-based information systems and community-based concepts. In total over 1,400 residential consumers throughout the country will participate in additional metering services trials. The participants are allocated across different population groups and connected to control groups by the statistical advisors to ensure a robust experimental trial design. Unlike the effect monitoring of the bimonthly home energy reports, sample sizes in this ‘alternative’ programme category will not appear large enough to ensure robust statistical soundness. Therefore, the results in this program category should not be qualified as fully representative and reliable from a statistical point of view.

All trials in the national monitoring programme will be performed by or in cooperation with the largest Dutch network operators Liander, Enexis and Stedin (representing approx. 90% of all meter connections in the Netherlands) under the scientific supervision of academic statistical advisors. The statisticians will analyse the consumption data collated from the trials to determine the customer response to the smart metering enabled measures tested in terms of the impact on their overall electricity and gas usage. Pre-trial and post-trial surveys of trial participants will also be conducted to draw demographic, behavioural and experiential conclusions from the trials. Due to the different nature of the trials, technical issues and other issues, most pilots have taken place at different times.
NL Agency oversees these pilots and is responsible for undertaking the design and coordination of the monitoring programme on behalf of the Ministry of Economic Affairs. As part of this work, NL Agency is also responsible for monitoring market developments of commercial based smart metering services. Finally NL Agency will arrange a series of stakeholder meetings with representatives of consumer associations, academic institutions, metering and/ or service providers in order to discuss and find broad support for the outcomes of the national monitoring program.

This way the monitoring program provides robust and fact-based public information about the possible energy saving merits of smart metering services for residential (and SME) consumers in the Netherlands. In addition, the impact of different services on consumer behaviour and attitude might help cast light on the relative attractiveness of various media, function and design options for specific metering service concepts. The key trial findings related to the actual, behavioural and attitude effects on household electricity and gas consumption are expected to be an important source of information for parliamentary evaluation of the small scale roll out in the second half of 2013. The statistical evidence from the trials will also provide relevant consumer information for the commercialising and/ or deployment of these smart metering enabled informational stimuli by free market players. If so desired, the results can also be inputted into future cost-benefit analysis to derive consumer usage-related benefit values.


Lessons learned & Best Practices

The original plan.

In 2008, the Dutch government presented a first legislative proposal to bring the smart meter under the responsibility of network operators in the regulated domain in combination with a mandated rollout to all households. Following consultations in the market sector, the Ministry of Economic Affairs proposed the following meter market changes:

  • All small users will be given a smart meter;
  • The grid operators will be responsible for rollout. The grid operators will own and maintain the smart meter and be responsible for a total distribution;
  • The meters will become part of the regulated domain of the grid operator, being considered as part of the physical infrastructure;
  • The cost of the hardware (meter hire) will be regulated;
  • The energy retailers will be responsible for all customer-related processes and metering data management;
  • The smart meters must comply with the basic functionality and technology mentioned in the smart meter industry standard NTA-8130 and technical requirements according to the Dutch Smart Metering System Requirements (DSMR) set by the Dutch association of network operators.

To meet the obligation arising from the above-mentioned ESD to provide regular feedback to consumers about energy consumption, the government stated a preference for setting a minimum frequency of 6 times per year (every two months).

The government proposed a mandated rollout as a prerequisite, because it was expected that a smart metering rollout in a liberalised market, without further regulation, would probably reach no more than about 30% penetration. In that case, several of the smart meter benefits mentioned above would not be realised.

The rollout will partly be funded from the current meter tariff. This tariff will be stable in the first years of the roll out and should remain unchanged or even drop. To date the meter charge has not been regulated and has increased by up to 100% since 2001. The Dutch regulator (NMa) has stated in 2008 that there was no relation between the increased tariffs and the actual costs of the meter.


Revised plan 2010: voluntary roll out of smart meters

In 2009, after intense political debate, the Dutch Senate declined to approve a mandated rollout of smart meters because of privacy and security concerns raised by the national association of consumers (Consumentenbond). To solve the stalemate, the mandatory roll out of smart meters was turned into a voluntary rollout. Furthermore the revised proposal settled security concerns by introducing additional security guarantees. This proposal was approved by the senate in 2011. In the revised proposal the consumer has the following legal options when offered a smart meter:

  • The option to refuse the installation of a smart meter and keep the traditional meter;
  • The option to have a smart meter fitted (or once it has been installed), but opt out of sending meter readings automatically (so smart meter functions as a traditional meter, a meter reader is still required);
  • The option to have a smart meter fitted, with standard meter reading frequencies of which the most important are: final billing in case of switching energy supplier or moving house, once a year for annual billing and bimonthly meter readings for additional energy advice in cost and consumption overviews.
  • The option to have a smart meter fitted, with full automatic and wireless smart meter reading.

The revised law proposal also required the Ministry of Economic Affairs to perform a recalculation of the national cost-benefit analysis performed in 2005 regarding the business case for the introduction of smart meters in the Netherlands.[1] Two major changes that prompted a new cost-benefit analysis were:

  • The smart meter will only be read once every two months in the standard situation. Only if express and unequivocal permission has been obtained from the consumer, more detailed reading can be done. In the 2005 analysis detailed reading was still the standard situation.
  • The consumer will have the option of refusing the smart meter. This means that the consumer in question will keep his or her traditional meter. In the case of new construction and renovations of houses and small buildings it is compulsory to install a smart meter, and there is no obligation to replace it with a traditional meter at the request of the consumer. In this case the consumer can have the smart meter treated like a traditional meter by registering it as ‘administratively off’.

Considering a situation of almost 100% acceptance of the smart meter as well as almost 100% standard readings, the updated cost-benefit-analysis still showed a positive business case result of approximately EUR 770 million. The main beneficial items (in order of positive contribution) are energy savings, savings on call centre costs, a lower cost level as a result of the market mechanism (increased switching) and savings in meter reading costs. Assuring the freedom of choice for the consumer, the revised law proposal passed in the Dutch House of Parliament on 9 November 2010. The Senate approved the revised proposal in January 2011.

[1]Prior to the original proposed changes in the Electricity Act and the Gas Act, which included a mandated rollout of the smart meter, a thorough cost-benefit analysis was conducted in 2005. This cost-benefit analysis, performed by KEMA by order of SenterNovem (now Agentschap NL), resulted in an expected positive business case of approx. EUR 1.3 billion (SenterNovem, 2005).

Next Steps

The next big step will be the start of a large scale role out of smart grids, as the pilot projects are reaching their final phase in 2015 and international lessons are being learned. Specific actions still are necessary concerning the regulatory framework, standards and interoperability, cyber security and privacy, consumer awareness and behaviour, new products and services.

Key Regulations, Legislation & Guidelines

Regulator NMA website:

Handbook Smart Grid Pilot Projects Regulation (in Dutch):
Part I 
Part II

“Intelligente Meters in Nederland: herziene financiele analyse en adviezen voor beleid.” (KEMA 2010)
“Energy in the Netherlands 2011.” (Collaborating Dutch sector organisations) 
“Innovation contract Smart Grids. Headlines of a Public Private Partnership and Innovation Agenda 2012”


The Dutch Smart Grid Policy

Smart grid policy is part of the national top sector approach and energy is one of the nine top sectors. Within the top sector energy “smart grids” is an important pillar that contributes to the overall goals of 16% renewable energy, 20% CO2 reduction in 2020 and yearly energy savings of 2%. The top sector energy aims to be of world class in its respective technology fields and assure the competitive position of the sector and the Netherlands with respect to energy. The Dutch top knowledge institute (TKI) for smart grids plays a crucial integrating role for the different technologies connected to the grid and large scale role out of renewable energy sources, related devices and energy storage.

Without smart grid these would lead to higher fluctuations in energy demand and production, unbalances in the grid and higher investments into the energy infrastructure and its maintenance. Finally the application of ICT and smart meters makes it possible to deliver direct feedback to the end consumers concerning their energy usage. According to several studies this can lead to greater awareness and between 3 to 10% energy savings, less CO2 emissions and lower maintenance costs of the grid. In addition new products and services can be developed on top of this smart grid. To explore these new applications and business cases a program of demonstration projects was initiated in 2011 and a year later the TKI for smart grids launched its R&D projects.

※ Information in this case was provided and compiled from existing sources by the Dutch NL Agency, Directorate Energy and Climate.

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