Consumers with smart meters could slash their energy consumption by more than 10%, the communication obtained by EurActiv reads.
Smart meters, which are conceptually and technologically linked to grids, allow customers to consume energy away from peak energy times by, for example, programming washing machine cycles to run in the middle of the night.
But only around 10% of EU households currently have a smart meter, despite an updated electricity directive in 2009's third energy package which intended to deliver them to 80% of European homes by 2020.
John Harris, vice-president of Landis and Gyr, a market leader on smart meters, told EurActiv that there had been "enough wiggle room in the third energy package that the member states could do what they wanted – and very little was done on the ground".
This paper was "praiseworthy" by comparison, he said.
The communication warns of "stricter regulation for the implementation of smart grids" by 2012, if member states are still making "insufficient progress" to implement the roll-out of smart metering systems - because of the close relationship between smart grids and meters.
Incentives in the making
The paper also signals forthcoming regulatory incentives for smart grids, a possible revision of the Energy Services Directive, and even a possible intervention to define a network code if progress in implementing the existing work programme is not made this year.
To monitor progress, EU member states will be requested to provide action plans with targets for the implementation of smart grid systems.
Policymakers see smart grids as a tool to reduce network losses, increase the reliability of the grid and allow large amounts of intermittent renewable power to be connected to the grid. Moreover, they allow consumers to sell energy back to the grid.Jessica Stromback, executive director of the Smart Energy Demand Coalition, welcomed the Commission's new tone.
"I think it is an excellent start," she told EurActiv, "and as they move forward they will see the areas they need to address for the further development of regulatory frameworks".
Today's communication was flagged last year in a policy paper which estimated that smart grids could save the EU €52 billion annually.
Bridge the investment gap
The communication says that a "considerable gap" in investment will need to be bridged to achieve that because while "grid operators and suppliers are expected to carry the main investment burden" of grids, they are unlikely to do so without "a fair cost-sharing model".
But according to Stromback, the problem facing smart grids is primarily one of legislative and regulatory frameworks.
"The investment is there," she told EurActiv. "Siemens, EDF and Schneiders are ready to roll if they only could. They're only being stopped because the capacity markets and wholesale markets which are necessary to sell energy savings are still non-existent at the moment."
Eurelectric, the association representing the EU electricity industry, also welcomed the communication.
But the group's chairman, Peter Birkner, added that "missing incentives – both in national regulation and in the overall European energy policy – are slowing down the necessary smart grid investments".
