Norway Announces 2-year Delay in Deployment of Advanced Metering System (AMS). New deadline: 1.1.2019

The Norwegian Ministry of Oil and Energy announced on 18 February 2013 that it will delay the deployment of smart metering, also called advanced metering system (AMS) for 2 years until 1 January 2019.

Full AMS-deployment delayed until 2019

In the letter, the Ministry describes the process as "huge and demanding" for many actors. Grid companies have facing many challenges of different natures when complying with their new obligations, and the Ministry estimates that they need better time to secure good processes. Therefore the Ministry is officially asking the Norwegian Water Resources and Energy Directorate (NVE), the energy regulator, to prepare the necessary amendments to the currently binding Regulations on AMS and replacing the former deadline of 1.1.2017 by the one of 1.1.2019. Nothing prevents distribution companies to implement the scheme earlier, notes the Ministry. NVE must send its comments and proposals for amendments by 15 March 2013.

More transparent rules for granting exemptions

In the same letter, the Ministry also calls on NVE for precising the criteria for exempting some distribution companies from installing AMS at some consumption points. The grounds for granting exemption are currently defined in § 4-1 of the Regulations and cover two situations: (1) metering points with very low and unpredictable consumption; (2) points where the installation of the smart meter is at the disadvantage of the consumer. The Ministry, following on that the calls from the industry, is asking more detailed rules to be drafted by NVE in the amended Regulations (e.g.: using a threshold value of 1,000 kW/year, which would also indirectly exclude some small district heating systems, etc.).

A National Central Data Hub and the Nordic End-User Market

Another central issue which needs clarification from the authorities is the establishment of the national data hub, which will be essential for the collection and utilisation of data towards the consumer. The Nordic Energy Regulators, gathered within NordREG, have developed a common strategy for the implementation of a Common Nordic End-User Market (see previous post here). The two topics are closely interrelated, and any delay in the implementation of AMS will also delay the implementation of the Nordic end-user market. This is also due to interactions between investment strategy within the sector which needs clear signals.

This also illustrates how dependent the national electricity systems, and above all the markets, are from each other now in Europe. We will probably see how foreign partners react to the announcement of the Norwegian ministry in the coming days, for better or for worse.

Background

NVE adopted on 24 June 2011 new rules providing for the large-scale deployment of smart meters (amendments to Regulations of 11.03.1999 nr. 301, Forskrift om endring til Avregningsforskriften). The Regulations set that, by 1 January 2017, all customers in Norway must be equipped with smart meters. The deadline applies equally to all parts of the country.

Pursuant to the Regulations, grid operators bear the responsibility for installing smart meters at all measurement points located within their concession area by 1 January 2017, with a 80% coverage by 1 January 2016 (§4-7). They are responsible for the registration, gathering and storage of metering data (§3.1, §4-5), as well as the installation of the meters (§4-1; subject to some exemptions). Operators must provide the collected information on consumption on the Internet in a manner that allows comparison (§4-4). The provision of information to consumers on the Internet by grid operators is already applicable as of 1 January 2014. When conducting these different tasks, the grid operators remain subject to the principle of neutrality (§8-1). 

Grid operators also bear a series of reporting obligations as to procurement plan and deployment strategy towards NVE. This last obligation, among other things, is giving NVE a good overview of the investments and plans in the sector. A first report came in February 2012, and the new one is still awaited. It will certainly reflect the doubts mentioned by the Ministry in its letter as to the level of preparedness of the distributors.

A first letter was already sent by the Ministry to NVE in December 2012 with almost the same content, but it was immediately withdrawn. The publication of the new letter is a first step towards the adjustment of the national strategy for AMS in Norway, but certainly not the last one.

References: press release, 18 February 2013, NVE, "Utsatt frist for utrulling av AMS".