Study: Implementing Section 14a of the Energy Industry Act (EnWG) in an economically viable manner

Study: Implementing Section 14a of the Energy Industry Act (EnWG) in an economically viable manner

Distribution network operators are obliged to implement the requirements set out in Section 14a of the German Energy Industry Act (EnWG). The framework is in place, but how can implementation be achieved in an economically viable manner?

The focus is currently on smart meter rollout, control boxes, and control chains. However, an objective, comprehensive cost analysis is still lacking. For this reason, we have conducted a joint study with the HORIZONTE Group to objectively examine and evaluate various scenarios.

The first finding is that the differences in total costs are enormous, and the right approach can save millions.

VDE FNN recommendation

The VDE FNN recommendation on grid status determination forms the basis for the implementation of Section 14a of the German Energy Industry Act (EnWG). It describes two ways in which distribution system operators can detect critical conditions

Option 1 – Calculate grid statuses: through modeling and estimation using iMSys and transformer measurements.

Option 2 – Measure grid conditions: through direct measurements at relevant points.

For option 1, the VDE FNN recommends the following iMSys equipment levels with TAF-10, differentiated according to measurement strategy and basic topology:

Facts / Valuation assumptions

For the study, a distribution network operator with the following characteristics was defined as a reference over an observation period of eight years:
1,000 local network stations, each with seven outputs per station

210,000 metering points
Premise: Mandatory installation rate of 30% for iMSys is cost-neutral
The study was conducted by the German Federal Network Agency (BNE) in cooperation with the German Association of Energy and Water Industries (BDEW).

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Results of the Study

RADIAL NETWORKS

Outgoing measurement (€13 million) or transformer sum measurement (€11 million) are economical.
Without station measurement, 70% iMSys TAF-10 is required, which quadruples the costs (€49 million).
Station measurement technology offers a clear cost advantage here.

MESHED NETWORKS

Transformer sum measurement (€8 million) is more cost-effective than output measurement (€12 million), but there are other possible applications.
Without station measurement, 40% iMSys TAF-10 is required, which doubles the cost (€16 million).
Station measurement technology offers a clear cost advantage here.

CLOSELY MESHED NETWORKS

With a mandatory installation rate of 30%, calculation using iMSys TAF-10 is the most cost-effective option (€5 million) compared to station measurement (€6 million or €10 million).
If the mandatory installation rate is ≤25%, the iMSys TAF-10 strategy is uneconomical and more expensive than measurement in the ONS.
A detailed, area-specific analysis is required.

Radial networks Cost comparison

5,9 Mio. € Station CAPEX
4,3 Mio. € Station OPEX
3,1 Mio. € iMSys OPEX total

2,9 Mio. € Station CAPEX
2,7 Mio. € Station OPEX
5,4 Mio. € iMSys OPEX total

27,7 Mio. € iMSys CAPEX
21,5 Mio. € iMSys OPEX total

* Total value over eight years

Conclusion of the Study

Measurement technology makes economic sense in most scenarios. The decisive factor here is the mandatory rollout rate for iMSys. Only in closely meshed networks can a purely iMSys TAF 10-based approach make economic sense – and even then only with a rollout rate of 30% or more.

In addition, station measurement technology allows the network status to be determined more quickly than with an approach based heavily on iMSys, as fewer operating resources are affected and these are directly accessible to the network operator. The cost difference between total and branch measurements is small. The required degree of digitization should therefore be assessed primarily on the basis of operational and planning criteria.

Our Recommendation to you

Station measurement technology is essential for cost-optimized load management in accordance with Section 14a of the German Energy Industry Act (EnWG).

Given the high costs of smart metering systems, it makes sense to limit investments here to the necessary minimum.

The additional installation of iMSys solely to meet the minimum requirements of the VDE-FNN recommendation is not economical in terms of either CAPEX or OPEX (TAF-10 costs). It is therefore more effective to invest in metering technology.

Conclusion: Station metering technology enables the economical implementation of Section 14a EnWG and at the same time creates reliable data for further applications in grid operation and grid planning.

A pure transformer measurement is more cost-effective, whereas an outgoing measurement opens up additional operational and planning applications.
The second VDE FNN option is particularly economical: measuring grid conditions. Without additional iMSys and ideally with 100% equipment of the local network stations.
The implementation of the SMIGHT IQ Copilot is based on direct station measurement (with the addition of individual TAF10 if necessary).

Our consulting services

Would you like to know how you can implement Section 14a of the German Energy Industry Act (EnWG) at a cost reduction of up to 75%?

We will work with you to develop a customized profitability analysis based on your own network data.

We support you in the following areas:

Insight into the study: We explain the methodology, scenarios, and results in detail; practical and tailored to your situation
Identification of individual cost levers
Clear recommendations for action for your rollout strategy

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