Susanne Wixforth, of the Austrian Chamber of Labour, presents at the Vienna Forum on European Energy Law, 2014

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Demand response: informed
and empowered consumers
versus consumer protection
Susanne Wixforth
Austrian Chamber of Labor

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Introductory remarks
The Austrian Federal Chamber of Labour is
the legal representative of 3,2 million
employees and consumers in Austria.
We take the view that consumer protection
and information are a pre-condition to their
empowerment.

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What is the meaning of
empowerment?
From a societal point of view, empowered
consumers should be able to reduce their
electricity consumption as much as possible
without loss of convenience.
From a consumer´s point of view, empowerment
means a cost reduction for comfortable energy
consumption.
Both concepts put together bring the EU closer
to its 20-20-20 energy targets.

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Don´t consumers care about prices?
No switching – consumption at the wrong time
that is the peak time.
Awareness of households about energy prices
and energy efficiency is high, BUT
Consumers are not professional energy experts
who have the knowledge and time to closely
study every day´s price peaks of electricity.
Also, the change of provider is not comparable to
the change of a brand: It is a contract of
continuing obligations providing a service
of general interest.

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Sequence of equipment cascade
Does the consumer dispose of energy efficient
infrastructure, that is an insulated
house/apartment, energy efficient windows,
energy efficient domestic devices? Does he
dispose of the sufficient high income to
establish such infrastructure?
Second question: Is the consumer connected to
receive e-bills and e-information?
Is the consumer at this stage ready for the
installation of a smart meter to manage his
demand?

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Smart meter offers a data flow on household
consumption every 15 minutes subject to
prior agreement.
The consumer will be overnewsed about his
power consumption but underinformed about
the most effective way to save power.
Therefore, the third step must be the energy
advice offered by professionals, preferably
by trusted bodies.
Only at that later stage the installation of a
smart meter might deliver: Reduction of
energy use on the one hand and
reduction of the energy bill on the other.

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Who will foot the bill?
Whereas the EU-directive foresees an 80% roll
out by 2020, Austria implements a roll-out of
smart meters of 95% by 2019. The total cost for
this investment is estimated up to 1,5 billion
Euros.
According to the German Energy Agency, the
cost per household will amount from 60 Euros up
to 240 Euros per year, whereas the benefits will
total between 9 Euros and 42 Euros depending
on the consumption.

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Can this amount be gained by demand
response?
A study (Ernst&Young) commissioned by the
German Ministry of Economics concludes:
For users with low power consumption the
installation cost for smart meters are higher than
the achievable energy savings. Only about 15%
of household consumers, whose energy
consumption is above average, will derive profits
from the roll out.
Why? Flexibility of demand response is limited,
even if the off peak tariffs might be very
preferential.

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Who devised demand response and
what for?
Demand response offers precious information
to the energy providers. The concept of
Demand Side Flexibility has been developed
by suppliers to optimize the sourcing costs of
their portfolio.
It represents a means for portfolio
optimization.

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Clear allocation of roles
Security of supply and capacity management
are the core tasks of energy providers.
Consumers must be protected against
remote disconnection.
Households will never become professional
electricity dealers or speculators on the
blossoming European commodity markets.

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Demand side response shall not be redefined
in such a way that the households have to
offer services instead of the electricity
providers.

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Which problems have to be tackled?
The answer is simple…
Easy access,
transparency,
data protection,
balanced financing and equal benefits for
households and electricity providers.
The road to achievement might be rocky…

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Concept for a feasible framework
The main and highest priority has to be set on
the implementation of energy efficiency
measures.
Priority to regulation by public order law. For
example: obligation that at least 40% of energy
efficiency measures bring about positive
benefits for households. For special targets,
subsidy programs should be established on EU-
level for households struck by energy poverty
(e.g. means from the European Social Fund).

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Personalized energy advice to households by
trusted bodies
Recast of Austrian smart meters roll-out :
Reduction of the roll-out to 80% until 2020
Evaluation of the beneficial effects taking into
consideration the technological development.
Avoidance of stranded costs for less deployed
technologies.
The further expansionary path until 2025
should be based on these findings.

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Tariffs shall be simple and comparable. A
jungle of tariffs blurs the target of lower prices
and more competition.
Base and time-independent tariff for
households, which should be the standard-
tariff. Austria´s relevant legal provision in § 81
(7) of the Electricity Act could be a useful
starting point for eventually harmonized EU
law.

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Thank you for your attention!
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