Metering Billing Report

Final Report
Good practice in Metering and Billing
Prepared in 2010 and 2011

by the Task Force “Best practice in Metering and Billing”
Euroheat & Power
Avenue de Tervuren 300,

1150 Brussels
Belgium
Tel. +32 (0)2 740 21 10
Fax. +32 (0)2 740 21 19
www.euroheat.org
This report is published by Euroheat & Power whose aim is to advocate the use of District Heating and
cooling as an efficient and environmentally benign energy solution that harnesses resources that would
otherwise be wasted to deliver reliable and comfortable heating and cooling in return.
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Report on Good practice in Metering and Billing
Table of Content:
I - Executive Summary............................................................................................ 4
II - Introduction ...................................................................................................... 5
II.a Scope ............................................................................................................................................. 5
II.b European regulatory developments concerning billing and metering ......................................... 9
III District Heating Customers ............................................................................ 11

III.a Customer categorization ............................................................................................................. 11
III.b Customer requirements .............................................................................................................. 12
III.c Good practice examples – customer relations ........................................................................... 14
IV – Metering in the European District Heating Sector......................................... 18

IV.a Why meter? ................................................................................................................................ 18
IV.b How to meter? ............................................................................................................................ 23
IV.c Different methods of reading ..................................................................................................... 25
IV.d Good practice examples in metering .......................................................................................... 29
V – Billing in the European District Heating sector ............................................... 36

V.a Billing as a Communication Tool ................................................................................................. 36
V.b Tariff structures........................................................................................................................... 40
V.c Structuring/Design of Bills .......................................................................................................... 44
V.d Customer Complaint Handling .................................................................................................... 46
V.e Good Practice Examples Billing ................................................................................................... 47
VI – Conclusion .................................................................................................... 52
VI.a Smart (heat) metering - Towards integrated energy solutions .................................................. 55
VI.b Recommendations, Future outlook and developments ............................................................. 56
Annex 1: Comparative summary of questionnaire ............................................... 58

Legal Disclaimer ................................................................................................... 58
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I - Executive Summary
Within the Euroheat & Power structure of expertise the Task Force “Best practice in Metering and
Billing” has elaborated this report, derived from information on a wide range of European member
states.
The main objective was to investigate existing and innovative approaches regarding billing and metering
in different European District Heating markets and identify good practice examples. To do so an
extensive survey was conducted throughout Europe.
During the elaboration of the report it became obvious that the method of metering and billing in a
certain country depends very much on the regulatory background and historical-District Heating
development. These differ considerably from country to country, which is the reason why European
wide recommendations and conclusions can only be drawn on a general level.
Today European legislation has a major impact on national regulations in the energy sector. Therefore
the European legislative background in this area (energy savings, energy services, standardization,
customer protection, etc.) has been analysed.
The paper elaborates on the different categories of District Heating customers, their diverse
requirements and the importance of good customer relations. In this respect the contractual link
between District Heating provider and its customers, who are not necessarily the end consumer of the
heating service, were identified as being decisive. Also the size of the customer has, in general, a major
impact on the installed metering equipment, which in turn has an impact on the provided information
and services, including the energy bill.
The benefits of metering, which go well beyond being able to create a bill, are identified. The paper
elaborates on the technical basis of heat metering, which is far more complex than electricity or gas and
water metering. Different technical solutions, including evaporative metering and various metering
methods and strategies like manual, semiautomatic and automatic metering are presented and
described.
One core aim of the metered data is to provide the basis for the District Heating bill. As the main
communication tool between the customer and its supplier its importance and added value are
highlighted. Regarding the layout of the bill the report comes to the conclusion that the simpler it is the
better and that graphic presentation increases the general understanding of the consumer. Three key
recommendations regarding customer complaint handling are also provided in this report.
Pricing in the different District Heating sectors is as diverse, as the regulatory background. District
Heating providers often depend on their national legislation when deciding on the tariffs they offer to
their customers. In any case innovative tariff systems that benefit the customer and the District Heating
provider do exist and are presented in this report. The report finishes with providing a general
conclusion and several recommendations
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II - Introduction
II.a Scope
Energy efficiency, the most essential element of District Heating and Cooling, has been identified at
various levels of decision making as the most cost effective and quickest way to reduce emissions,
improve energy security and competitiveness and make the energy process more affordable for
consumers while simultaneously creating employment1.
To reach these objectives, advanced metering and improved billing policies are important drivers. The
bill is the main instrument for the customers to understand how much they consume and how much
they pay for it. A variety of studies showed that increasing customers’ awareness of their energy
consumption immediately provides results. The energy bill as the main information source for customer
has moved into the centre of public interest, as has metering which provides the basis of any energy bill.
So far the focus on a European regulatory level has mainly, but not exclusively, been on the electricity
and gas sector. Because of recent developments in several member states and due to its significance, it
seems to be only a matter of time before the heating sectors overall, but also District Heating and
Cooling, will receive more attention in this respect.
Having confidence in his/her meter readings and being sure that the amount indicated on the energy bill
is correct, are direct benefits of accurate metering and billing for each District Heating customer.
Furthermore and as indicated above customers might also be incentivised to change their consumption
behaviour and save on their energy bill or receive additional information through their bill. Through the
information provided on a bill customers can get in contact with their supplier or learn about new
services and other benefits of District Heating.
Accurate and advanced metering, along with a well-organized billing policy not only provide advantages
for the customer, but are also of significant interest to District Heating providers. As the subchapter
“Why meter?” shows, metering data is essential to optimize the systems operation and to know the
needs of customers. At the same time the bill is the main communication tool between the provider and
customer, providing unique opportunities for improved customer relations, which are important to
satisfy existing customers, while at the same time connecting new ones. The bill should be seen as the
business card that the District Heating provider gives to its customers. Finally, the measurements are
also the basis for the revenues of the utility.
Another crucial viewpoint considering billing and metering from a wider perspective is customer
satisfaction. In the majority of today’s heating markets customers can choose, from a wide range of
heating solutions. With customers increasingly are aiming to reduce their energy consumption, it is ever
more important to satisfy the needs and requests of existing and future customers. These needs vary a
lot from customer to customer and system to system. Through ongoing dialog with customers, suppliers
can best adapt to changing demands, which often go beyond cheap energy prices.
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COM (2010) 639/3final
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Given the various regulatory and technological changes the Energy markets are currently facing and
acknowledging new expectations from customers. The District Heating and Cooling sector has decided
to prepare for these upcoming developments and challenges by establishing a Task Force on “Best
Practices in Metering and Billing” within the Euroheat & Power structure of expertise. The objective of
this group is to elaborate a report on the topic and serve as a platform for information exchange
between experts to ensure that the lessons learned in one country can be of help to others.
To whom is this paper addressed
The report at hand is the collective result of this Task Force and is derived from information on a wide
range of European member states. It is primarily addressed to stakeholders in the District Heating and
Cooling sector to give an overview of how the issues of metering and billing are dealt with throughout
Europe. The report shall highlight good practice examples to provide new perspectives and inspire the
daily work of experts in the District Heating and Cooling sector.
Good or Best Practice examples in the European District Heating sector regarding billing and metering
are directly dependent on the regulatory and technical system setup in each country or region. What
might be a good or best practice example for a given system may not necessarily have the same positive
effects in another country or in an extreme case might even be against national law. Therefore the
examples in this report should not be regarded as a ’one-size-fits-all’ solutions to be implemented in
every country, but as an example of what can be achieved and the techniques that can been used.
Why District Heating?
But why should the European Institutions, national governments or local decision makers care about
District Heating? According to the International Energy Association (IEA) heat takes the largest share of
the overall energy demand in the European Union (see Figure 1). From a global perspective, the market
penetration of District Heating is unevenly distributed, being close to zero in some countries while
reaching as high as 70% of the heat market in others. On a European level District Heating is currently
supplying approximately 9% of the total heat demand. A share which compared to its competitors (e.g.
gas currently holding a market share of approx. 35 % in the residential and commercial sector2) is still
relatively small, provides vast potential for expansion.
2
Eurogas, Natural gas demand and supply, 2010;
http://www.eurogas.org/uploaded/Eurogas%20long%20term%20outlook%20to%202030%20-%20final.pdf
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Figure 1: Shares of total final energy consumption broken down into electricity, transport,
heat and non-energy use3
OECD Countries
21%
37% Electricity
Transport
32% Non-energy use
10%
Heat
World
17% Electricity
47%
Transport
27%
Non-energy use
9%
Heat
The fundamental idea behind modern District Heating, as presented below is to recycle heat that
otherwise would be wasted and to use renewable energies that are locally available, enabling society to
take advantage of unique opportunities that no other energy system can utilise.
3
Source: IEA statistics and analysis 20111
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Figure 2: Fundamental idea of District Heating
In order to reduce primary energy demand and CO2 emissions, District Heat generation in Europe is 81%
recycled heat from various processes such as Combined Heat and Power, waste incineration and
industrial surplus heat, which in turn are based on a variety of fuels including renewables, natural gas
and oil. This share has been constantly increasing over time, as District Heating companies continuously
strive to make even better use of the existing energy potential. The remaining 19% is based on the direct
use of renewable energy sources, such as geothermal heat or biomass, and fossil fuels, mainly for peak
demand.
The further development of District Heating will not only help Europe to achieve greater energy
efficiency, but will also make it less dependent on unstable energy imports, more competitive and a
leader in the combat against climate change. Ecoheatcool4, a study co-financed by the European
Commission, showed that by doubling and improving District Heating across 32 European countries we
could save an extra 404 million tons of CO2 annually (additional to the 113 million tons/year avoided
today) in the time horizon 2020. At the same time, higher energy efficiency will reduce primary energy
supply by 2.6 % (2003) or 2.1 EJ (50,7 Mtoe)/year (equal to the primary energy supply of Sweden).
Higher security of supply will reduce the import dependency to 4.5 EJ (105,4 Mtoe)/year (equal to the
primary energy supply of Poland).
By optimising the use of local resources and combining different cooling sources, District Cooling
represents the sustainable response to Europe’s rising cooling demands. It outperforms electricity
driven air-conditioning with a energy efficiency ratio that is five to ten times higher. This leads to the
project result2, that assuming 25% of Europe's cooling demands were met by District Cooling by 2020, 50
to 60 TWh of electricity would be saved. Not only would we thereby annually avoid 40 to 50 million
tonnes of CO2, but also 30 billion Euros of investment in peak electricity capacity would be avoided.
4
www.ecoheatcool.org
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II.b European regulatory developments concerning billing and metering
Various parts and pieces of European legislation have a direct or, in most cases, indirect impact on the
District Heating and Cooling sector. The most significant are listed below:
 Recast of the EPBD 2010/31/EU9

 RES directive 2009/28/EC
 GHG Effort Sharing Decision 2009/406/EC
 Completion of the internal energy market (Directive 2009/72/EC and 2009/73/EC)
 Eco design directive 2009/125/EC
 IPPC Directive 2008/1/EC
 Directive 2006/32/EC on end-use energy efficiency and energy services
 Cogeneration Directive 2004/8/EC
 Measuring Instruments Directive 2004/22/EC
 Energy Taxation Directive 2003/96/EC
 Large Combustion Plant directive 2001/80/EC
 Directive on national emissions' ceilings for certain pollutants 2001/81/EC
 Landfill Directive 99/31/EC
Concerning billing and metering in the District Heating sector beyond doubt the most important
legislative act on a European level is Directive 2006/32/EC on end-use energy efficiency and energy
services. Member states have faced serious difficulties or misfit in the national implementation of the
Directive and 24 infringement procedures were initially launched by the end of 2008.
In particular Article 13 is of importance to this report as it deals with metering and informative billing of
energy consumption and directly addresses District Heating and Cooling (see extract below). As a
directive is only binding to the result to be achieved, the national implementations differ.
“Article 13
1. MS shall ensure that, in so far as it is technically possible, financially reasonable and

proportionate in relation to the potential energy savings, final customers for electricity, natural
gas, District Heating and/or cooling and domestic hot water are provided with competitively
priced individual meters that accurately reflect the final customer's actual energy consumption
and that provide information on actual time of use.
2. MS shall ensure that, where appropriate, billing … is based on actual energy consumption,
and is presented in clear and understandable terms. Appropriate information shall be made
available with the bill to provide final customers with a comprehensive account of current energy
costs. Billing on the basis of actual consumption shall be performed frequently enough to enable
customers to regulate their own energy consumption.
3. MS shall ensure that, where appropriate, the following information is made available to final
customers in clear and understandable terms … in or with their bills, contracts, transactions,
and/or receipts at distribution stations:
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(a) current actual prices and actual consumption of energy;
(b) comparisons of the final customer's current energy consumption with consumption for the
same period in the previous year, preferably in graphic form;
(c) wherever possible and useful, comparisons with an average normalised or benchmarked
user of energy in the same user category;
(d) contact information for consumers’ organisations, energy agencies or similar bodies,
including website addresses, from which information may be obtained on available energy
efficiency improvement measures, comparative end-user profiles and/or objective technical
specifications for energy-using equipment.”
From a technical viewpoint the Measuring Instruments Directive has a direct impact on the utilized
instruments and is currently undergoing revision. It covers a wide range of measuring instruments from
taximeters to heat meters. Neither the Task Force, nor the report deal in detail with this Directive.
On a European level the issue of billing and metering is also directly or indirectly covered by the various
“smart metering” or “smart grid” efforts and decisions. Again with a focus on electricity and gas and
partially based on the last liberalization package and the Energy services Directive 2006/32/EC, several
institutions look into the subject and try to understand, support and control the development. The
European Commission has set up a Task Force on Smart grids5, while other bodies like ERGEG (European
Regulators’ Group for Electricity and Gas) and CEER (Council of European Energy Regulators) organize
events and elaborate papers. The European Commission gave a smart metering standardisation
mandate (M/441) to the European Standardization Organizations, CEN, CENELEC and ETSI. The general
objective of the M/441 mandate is to create European standards that will enable interoperability of
utility meters (water, gas, electricity and heat), which can then improve the means by which customers’
awareness of actual consumption can be raised in order to allow timely adaptation to their demands
(‘generally referred to as SMART METERING’). As the smart grid development at least in the public
debate seems to be mainly driven by the Electricity meter sector, the interoperability with other non-
electric meters is key.
Although of no direct concern to District Heating and Cooling, as dedicated to the European electricity
and gas sector with the intention to introducing competition in these markets, the different
liberalization packages have gradually brought the spotlight on energy consumer issues. They were the
trigger for several subsequent actions of the European Commission and other stakeholders, such as the
establishment of the Citizens’ Energy Forum6 or a Commission led Working Group on billing, which
produced a “Good practice guidance for billing” for the electricity sector. The main reason and
justification for the Commissions activity is that it assumes that consumers require correct, concise and
comparable information to make informed decisions and thereby be able to participate in the energy
market. In short, information and education on billing shall lead to consumer empowerment.
5
http://ec.europa.eu/energy/gas_electricity/smartgrids/taskforce_en.htm
6
http://ec.europa.eu/energy/gas_electricity/forum_citizen_energy_en.htm
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III District Heating Customers
III.a Customer categorization
District Heating in Europe mainly supplies residential, public, and commercial buildings with space
heating and in most cases with heat for warm water preparation. Often also industrial heat demands are
covered by District Heating.7 District Cooling, for the most part, provides comfort cooling in public and
commercial building, while the industrial and residential sectors are rarely supplied.
Due to the nature of the heating sector, District Heating customers are not always the final consumers
of the provided energy. Depending on the local background and historic developments, many District
Heating companies supply heat to collective or corporate customers, like building-owners or housing
associations. It is the collective or corporate customer who distributes, allocates and invoices the final
consumer, whether it is an apartment or office. This particular feature is also one of the main
differences between the District Heating and electricity sectors. Although both are grid based energies
only electricity is in direct relation with all its customers.
From the viewpoint of a District Heating provider one can differentiate on various criteria between
customers: supplied sector (see above), capacity, contractual relation and customer/consumer needs. In
the following, the difference between the various kinds of District Heating customers will be elaborated
on these diverse criteria.
Size and capacity

As already mentioned above, mainly in the residential sector, one can differentiate between collective
and individual customers. A typical collective customer would be the owner of an apartment building,
while the individual customer would be the different apartment owners or tenants of the block. Another
kind of individual customer would be a single family house, which in some countries is a more common
District Heating customer than in others.
This classification has an impact on the contractual relations (see below) and the technical installations
and possibilities. A collective customer, as well as most corporate customers, will require a larger
capacity and consume more energy over the year. Considering the ratio of the price of the metering
equipment in relation to the cost of the annually purchased heat, one can observe that the larger a
customer the more economical the installation of an advanced metering system is.
Therefore it comes as no surprise that collective customers tend to be more often equipped with
advanced metering system. This precondition allows often for other services to be provided to collective
and corporate customers than to individual customers. Examples would be online real time metering or
advanced tariff models like return temperature- or seasonal fees.
Contractual relation to the customer

For the analyses and understanding of how metering and billing is currently handled, the contractual
relation between the heat provider and the customer is a crucial factor and differs throughout Europe.
One can basically distinguish between two constellations:
7
In general, this paper and the Task Force “Best practice in metering and billing” have not dealt with industrial District Heating
and therefore no information on this sector will be included in this report.
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 The District Heating company is in direct contact with the final end consumer, which can be an
apartment, a single family house or a company owning an office.
 The District Heating company is “only” in contact with a corporate/collective customer, like a
building owner or housing cooperative. In this constellation the District Heating providers have
no direct relationship with the end consumers, leaving another party in charge of cost and heat
allocation, eventually sub metering and issuing of bills.
The kind of contractual relation differs not only between countries, but from system to system. It often
depends on historical developments and legal frameworks. While for example in Hungary the District
Heating provider is in direct contractual relation with every single flat owner/tenant of an apartment
building, French and Swedish providers would be only contracted with the apartment block owner.
If the District Heating company has a corporate/collective customer there is no relationship with the
final end consumer, which limits the potential and influence on additional services. The entity
representing the corporate/collective customer is in charge for the cost allocation and the billing of the
consumers. In some countries (e.g. Sweden) this contractual arrangement has been decided on
intentionally, as thereby the entity that can make substantial changes to the building envelope has an
incentive to renovate and save on the energy bill. Looking at it from a different perspective, if there is no
contractual relationship with the end consumer the utility has no influence on the mode of cost
allocation, eventual sub metering or other information services for consumers.
III.b Customer requirements

District Heating customers, their technical installations and their contractual relations are as diverse as
are their needs and demands for services. The possible services vary from the basic heat supply to the
customer’s substation or maintenance and replacement of technical components, to online services,
remote reading, energy services agreements, energy contracting or sophisticated tariff systems.
Not only do the required services differ between customers, but so do their timing and seasonal
demand patterns. In general residential customers and the service sector will require more energy
depending on the ambient temperature for space heating, while an industry might require energy for
certain processes independently from the season and the hour of the day. This demand also depends on
the performance of the connected buildings and comfort perceptions.
In order to keep existing customers whilst connecting additional customers District Heating has in any
case to provide a product and service that outperforms the competing technologies. Hence customer
relations and customer care are a core activity for District Heating providers. Still the issues are handled
differently throughout Europe largely as a result of the differing contractual relationships between
utilities and end-consumers.
The level of services that can be provided and available information that can be communicated on
energy bills also depends on the installed metering equipment. For example remote meters enable more
frequent reading intervals, which are the basis for services like instant online access to consumption.
While more information is desirable for the District Heating provider as well as the customer, it also
comes at a certain cost. For this reason a balance between the cost and benefits of advanced metering
has to be achieved.
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With more information collected and made available, the challenge of privacy and security occurs.
Although important this report will not deal with such issues.
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III.c Good practice examples – customer relations
 Reko Fjärrvärme – the Swedish system for strengthening customer relations and empowering
the consumer.
The Reko system was the first in the world of its kind and was introduced in 2005. It is a voluntary
system that is owned by the Swedish District Heating Association. The foundation for Reko was and still
is these three values: transparency, comparability and trust.
The purpose at first was to avoid a price regulation imposed by the government, but also to improve
customer relations.
Reko was created after discussions with the biggest customer organisations in Sweden and the main
goal in the beginning was to improve transparency and support the customer in the dialogue with the
District Heating company. The latter was important as many customers felt inferior in relation to the
District Heating company. The system was successful in avoiding price regulation; in fact, to this day
Sweden has no price regulation. The success was built on the fact that the customer was empowered in
reality. To ensure this the launch of the Reko system depended on two things:
1. A majority of the members heat deliveries must be within the system
2. The customers must have a major influence both in the system and in the development of the
system.
Both goals were met swiftly and therefore Reko was successful.
Reko has developed over the years and is today still a system whose purpose is to empower the
consumer through transparency, quality requirements and an independent quality board. The quality
board has the power to exclude member companies that do not comply with the system. Reko is revised
every year to ensure that the system meets market demands and develops in sync with the customers.
The development over the years has brought the system closer to a customer management tool with
the possibility of an independent audit of the company’s compliance to the system if the customer has
complaints.
Reko today consist of these main components
 Customer relations quality requirements
 Quality board
 Transparency document
 Reko meetings with the customers
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And the latest amendment is a requirement for the companies in Reko to educate at least one person in
the company in the Reko system each year. This is to ensure that the quality of the system is upheld.
15
 Hungarian Customer information example
The Debrecen District Heating company informed its customer with the following information
campaign (Hungarian original and English translation) on how efficiently the company uses its
revenues.
16
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IV – Metering in the European District Heating Sector
IV.a Why meter?
Measurement is knowledge
In theory one could have a District Heating operation without meters as long as the customers get what
they need and the company receive the revenues they require.
One obvious answer to the question is the saying “to measure is to know”. The District Heating industry
simply needs to know what the customers’ demands are and how much the company delivers. The data
is the basis for optimising the operation. Optimisation is crucial and includes everything from the
furnace to the customer’s radiators.
District Heating is basically a way of making the overall energy system more efficient. One way of doing
that is to add District Heating to power production thus making it in to what is called combined heat and
power production. This efficiency, however, is outside of the customer’s sphere of interest and is
therefore often difficult to illustrate for the customer. The overall efficiency is one of the main
competitive advantages of District Heating. Efficiency is something that a District Heating company has
to strive to obtain and develop. Making the operation over all efficient is the only way to keep the
competitive edge towards other forms of space heating. Regardless of the legislative environment lack
of efficiency will be a problem, sooner or later. Thus the need to know is great, if not essential, in the
District Heating industry. And one way of attaining this knowledge is to meter.
Another perhaps more unexpected need to meter is the customer’s demand for information. Today we
stand before great challenges such as climate change. One of the major tools of combating climate
change is developing energy efficiency schemes. This involves the customer. The experience from
different countries is that the customer wants to be a part of the solution. This requires metering data.
Information is in demand and the customer can through information save energy and money. Monetary
reasons are great incentives for the customer, but environmental factors are also important for modern
customers and its importance is increasing. But being a part of the solution requires information.
Measurements of the consumption of energy are a very big part of the customer’s process towards
involvement in energy efficiency challenge.
But you don’t have to go so far as the great challenges. The need for data is also a very basic need for
the customer. Many countries in Europe have laws that require building owners to divide the
consumption of heat between the tenants of the building. This can only be done if energy delivered to
the building is metered to begin with.
It is also important for the customer to know that the bill is correct. He or she wants to be certain that
they don’t pay too much or too little for the energy they consume. It is a matter of fairness. Fairness
towards both the District Heating company and towards other customers is important.
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The questions and general answers above are easy to identify but not so easy to carry out and
implement.
Meters – the heart of the business

District Heating is used mainly for heating buildings and hot water. Industrial processes and heat used
for other purposes than heating space are minor customer groups within District Heating. But there is a
wide variety of customers using District Heating in Europe today. But they all have in common that they
need information on their energy consumption. Greater knowledge of their energy usage and
consumption is a positive thing. Knowledge enables customers to take informed decisions about their
energy usage and costs and ultimately contribute to a better environment and a sustainable society.
Measurement from a District Heating company’s point of view is concerned with two key ares. One
major matter is productions data. District Heating companies have to have control over their
productions output. This is done today. The other matter is measuring where the energy ends up and is
being used. This is not always done today. This report will concentrate on the latter matter. From a
company’s point of view getting to know your customers’ behaviour is crucial when trying to optimising
the District Heating system. And as efficiency and optimisation is the major part of District Heating’s
competitive edge, meters and their measurements become the core of the District Heating company´s
business.
Metering and the metering system can be divided into two different areas. The first is the measurement
that is done by a meter and the other is reading the measurements. These two systems can be, and
often are, two separate systems. It is only after the readings are gathered that the system is completed.
After reading and reporting the meter data the company has a database of measurements that can be
used for billing or other purposes. The reading and gathering of measurements is an important process
and can be carried out in different ways (se sketches).
When the read measurements are connected to the billing system then the meter data can become
financial information.
For many homeowners and apartment buildings, the space heating or cooling is a dominant part of the
operating cost over the year. In most cases, it is also a cost that can be affected. Heating cost for
industrial facilities tend to be generally lower than the cost of wages and raw material and other inputs
and can thus in some cases have a secondary role in various cost-saving measures. In the heavy energy-
intensive industry's dominant energy in the processes and costs for heating can have a secondary
importance. Therefore interest in energy saving schemes might not be so high in the industrial sector,
although there are many things that can be done in order to save energy and minimize industrial CO2
emissions. For residential and industrial premises, there is a value in increasing the understanding of
heat consumption and how it may affect their costs.
Understanding energy consumption is important for the District Heating company but equally important
is to keep track on the revenues. That can only be done when the metering system is connected to the
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billing system. If you look at it that way, metering becomes essential for the company and its finances
and therefore of great importance for the District Heating company. The financial information put
together with the understanding of energy consumption also enables the District Heating company to
elaborate forecasts on future developments. Metering is, in other words, the basis for not only
optimisation in of day to day operations, but also a basis for planning optimisation in the short and long
term.
Metering is basis for billing

Billing is done yearly, quarterly, bimonthly or monthly. There are different varieties and is based on the
type of customer, or sometimes on historical reasons. Most District Heating companies bill monthly
since fuel costs and other expenses are normally paid monthly. Monthly billing makes it easier to
produce quarterly reporting of results for the District Heating company if the owners or legislators
demand that.
There are two different billing principles. One is preliminary billing and is quite common and the other
one is billing according to actual consumption.
When metering the District Heating company can make sure that the customer pays for just what he or
she has consumed, regardless of meter strategy. It is important for the customer to know that he or she
will be treated fairly.
Preliminary billing
Preliminary billing is basically billing according to the experience of the customer’s needs and
behaviours typically over a one year cycle. That doesn’t mean that the energy isn’t metered. It just
means that the meter isn’t read so often or often enough to be the basis for bills. This principle is quite
simple in its design. The billing and metering system are usually not interconnected to each other.
Instead the company bills the customer after a forecast plan that has been predesigned. The plan can be
comprehensive and take in to account factors such as weather and differing customer behaviours, or it
can be quite simple and just divide up the total sum for the period (usually one year) in to equal
payments in certain intervals (usually 12, one for each month). The system always has to be equalized
at some point.
This means that the customers’ attempts to streamline and conserve their energy usage does not
translate to a change in their bills (and therefore not a financial impact) until the next metering period,
up to a year later.
Billing according to meter read consumption

When billing according to the actual meter read consumption the company needs information on
consumption for that specific billing period for each specific customer. This can be done in different
ways and is not necessarily dependent on electronic communication. However, with electronic
communication billing according to actual meter read consumption is easier and more cost effective and
can be done more frequently. It is, in other words, necessary to have automated reading and
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information gathering (computer systems) in order to be able to bill according to meter read
consumption in a cost effective way.
The major difference between the two systems mentioned above is the connection between the
metering system and the billing system. In the first case, preliminary billing, there is no need to connect
them in real time during the metering period as the balancing of the systems is done just once every
period. It is just at this balancing point that the systems need to connect and exchange information.
When balancing the District Heating company will find out if the customer has consumed more or less
than predicted beforehand. In the latter case, billing according to meter read consumption, there is a
need to interconnect the systems if not in real time so at least before every bill is sent out.
Heat allocation (or sub metering)

Heat allocation is a form of metering. Usually this is done after the central meter for the whole building.
When allocating heat you can use sub metering as one way of dividing up the consumption among the
end customers (consumer), often in blocks of flats. Quite a few countries in Europe practice sub
metering. This is usually done by using evaporators but can also be done using individual meters in each
flat. Evaporative meters can be read by either the tenant or the District Heating company and then
entered into the District Heating company’s metering database. Alternatively they are read by a Service
company who also offers to calculate and issue bills to each tenant.
In some cases the metering of heat consumption in a flat is combined with the size of the flat. When
allocating the company, or a third party, has to take different aspects in to account. Just using the
meters values is not always enough to get a fair allocation of cost of heating between the tenants. In
some countries this is required by law. In that case the legislation in the specific country often demands
that the customer shall be presented with information on how much heat his or her flat has consumed.
Contract
As both metering and billing is a part of the business agreement it is important that the business
relationship is documented formally. There needs to be a contract between the District Heating
company and the customer that clearly states what is going to be metered and billed, how the meter is
going to be read, when the bills are going to be issued and when payment is expected. This is to ensure
that there are no misconceptions of what each party is obligated to do. In some countries the things
mentioned above are regulated in the national legislation. In that case a contract is not needed.
Structure of energy price

In chapter V the report goes into pricing in more detail, but it is worth mentioning that the structure of
the pricing is important when deciding on meter strategy. If the energy price is a small part of the total
amount paid then metering becomes less important and vice versa.
Ownership of the meter and the data

Different countries have different legislative requirements. One fairly common legislative requirement is
that the district energy company owns the meter and is responsible for its maintenance and accuracy.
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But if the District Heating company hasn’t that requirement or if they are free to choose, then the
company has to make a strategic decision about ownership of the meter. Data is needed for almost
everything from energy efficiency to billing. On the other hand the customer may prefer that a third
party is responsible for metering and measurement data.
Methods of metering
Billing that take consumption into account requires metering otherwise the company has nothing to
base its bills on. The company can, if the legislation allows it, make out bills just according to a fixed rate
that is independent of the consumption. But in this report, that is not an option. As mentioned above
the strategies for metering depends on what customers the companies have. But equally important is
the design of the District Heating system. As District Heating systems are local they are very different
and they operate under very different legislative preconditions. This has to be taken into account when
deciding on a strategy on metering.
In trying to meter the billing demands metering strategies can be one of these:
· Manually read meters
· Self read meters (the customers themselves read the meters and then inform the
company of the readings)
· Remotely read meters (via radio or telecommunication)
· Online real time metering (via internet connection or telecommunication, i.e. GSM or
GPRS. This is sometimes referred to as smart metering)
The choice of strategy will of course depend on several things. One is a monetary reason. If the company
needs to invest in communications equipment it will be expensive. However, the automated system can
in the long run be cheaper than a manual more labour intensive system. An automated system gives
feedback faster so the response time for the customer to take energy saving action is much shorter.
Weighing benefits and drawbacks can only be done by each District Heating company with knowledge of
the local conditions.
The technology is rapidly developing new applications enabling new services to emerge. This is often
referred to as smart metering. Smart meters can be the next generation of meters that provides the
possibility to monitor all energy usage in real time in the building. Whether it is something that the
customer wants and benefits from can only the future will tell.
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IV.b How to meter?
Technology
A heat meter is a device which measures thermal energy provided by a source, by measuring the volume
(V) of the heat transfer fluid and the change in its temperature (ΔT) between the inlet and outlet of the
system.
The formula for heat transfer calculations is:

amount of heat transferred = mass x change in temperature x specific heat
A standard flow meter measures the volume and not the mass, so the specific gravity is simply added to
the formula together with the specific heat in the correction factor K.
The formula is now:
amount of heat transferred = volume x change in temperature x K
A heat meter consists of 3 sub-assemblies:

1) a volume flow meter – either a mechanical type or a static type.
2) a means of measuring the temperature between the inlet and the outlet line - usually a pair of
Resistance thermometers and
3) a calculator for integrating the two measurements over a period of time or an amount of volume flow
and accumulating the total heat transfer in the units of either kWh, MWh or GJ.
Figure 3: Heat meters’ sub assemblies
Heat meter
Volume temperature Calculator
The heat meter can be COMBINED; where the 3 sub-assemblies are separable during verification,
installation and service, HYBRID; where the parts may be separated during verification, but after that
shall be treated as inseparable or COMPLETE; where the parts always are inseparable. Hybrid and
complete meters are often referred to as “Compact heat meters”
According to the requirements by MID (Measuring Instrument Directive 2004/22/EC) heat meters shall
comply with the standard EN 1434. This includes an Examination of type and design (EN1434-4; pattern
approval tests) and Inspection of produced meters (EN1434-5; Initial verification tests)
MID has not yet been implemented in all EU countries. Even when there are no national regulations for
the control system, it is common to follow the MID as it secures the quality and reliability of the meter.
The MID and the initial verification regulates only the installation of new heat meters. Several countries
have implemented a national regulation for a control system to ensure the overall performance and
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accuracy of all installed meters. The control system can be based either on full control of all meters or
on random-sample testing of a few representative meters from the installed population of meters. The
period of time between testing shall be balanced to avoid unnecessary costs and yet to make sure to
find meters being outside the MPE (Maximal Permitted Error).
The legally obliged party is responsible for the correct selection and dimensioning of the heat meter and
to ensureing the meter is appropriate and suitable for the installation, including demand for
classification of protection and environment.
Precondition for selecting a heat meter is:
 the meter shall be suitable for technical and ambient conditions at the point of installation
 the meter shall offer excellent stability and accuracy during the entire expected lifetime
Furthermore some strategic requirements may be added:

 the meter shall be simple to upgrade with new remote reading technology (AMR, , Smart-
metering) and be prepared for operational control
 the meter shall be from an innovative and reliable manufacturer
 the manufacturer shall show both environmental and social responsibility.
The installation of Heat meters shall follow the EN1434-6 (Installation, commissioning, operational
monitoring and maintenance) as well as the specific guidelines laid down in the manufacturer’s
installation manual. When the meter has been installed, it shall be inspected and sealed by a competent
authority (persons or organizations charged with the responsibility for the heat meter and/or its
installation)
Heat meters are usually described as “Mechanical” or “Static” depending on which type of volume flow
meter is being used.
Mechanical type meters are using a volume flow meter with a radial impeller or a turbine. The rotation
of the impeller is converted into electrical impulses, expressing the volume flow. The impulses are then
sent to the calculator.
Static meters are identified by having no mechanical parts moving inside. Mainly two types are used for
heat metering: electromagnetic-inductive and ultrasonic. The electromagnetic-inductive type was earlier
a popular choice, but due to a rapid and intensive development most static heat meters are today based
on ultrasonic volume flow meters.
Advantages of these meters...

 Static meters are not damaged by overload and they are much less sensitive to pollution and
particles in the water which will influence the service life-time of the meter.
 Static meters are not influenced by angle of installation.
 Ultrasonic type meters do not depend on conductivity in the water and can operate several
years on a single battery.
 During the recent years, the cost of static meters has decreased, and the price difference
between mechanical and static meters has become much smaller.
The benefit from this is a significant longer service life time with lower costs for maintenance and
replacement of defective meters as well as less customer complaints and disputes on the billing
accuracy.
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Heat cost allocators are typically installed and used when the heating circuit does not allow the
installation of heat meters, for example in larger buildings with a vertical heating system and a larger
number of flats. With one heat meter covering the entire building and one cost allocator mounted on
each radiator, it is possible, after reading all installed meters, to calculate a consumption-dependent
share of the total heat consumption for each apartment. Heat cost allocators are often used for sub-
metering and therefore normally managed by the building administration company or a dedicated
service company. A heat cost allocator is either based on evaporation of a special liquid or made as a
battery operated electronic device, of which the later also allow logging and remote reading of data.
Methodology - different approaches

The meter is usually installed at the point of delivery (point of billing), meaning the sub-station, the
individual home or even the radiator. A heat meter installed in the substation will measure the total
consumption for all residential area connected after the substation, and a sub-metering system will then
be required for individual billing. Sub-metering is regulated only in a few countries.
Maintenance, reading etc. is easier to administer when the meter is owned by the provider of heat. A
heat distribution system will always have a certain loss of heat energy, and this may be considered when
the locations of heat meters are decided. Heat loss from a sub-station in the basement of a building can
be regarded as a contribution to heating of the building. Heat loss from a substation in a separate
building is not, and may be regarded as a general cost.
Cost, of purchasing the meter

The cost of heat metering is usually covered by the heat provider, and then in some way added to the
heating cost. Finally it is therefore paid by the heat consumer. The way this cost is put on the consumer
varies from being invoiced directly at the time of installation, being charged as a separate monthly or
annual “meter fee” or simply just added to the cost of heating
Purchase and installation of meters

The initial cost of installing a meter covers the purchase, delivery, inspection (when applicable)
installation and registration of the meter change at the consumer end. Reliability and expected service
life of the meter is worth considering as the purchase price is only a part of the accumulated cost.
Usage and maintenance

Heat providers in for example Denmark recommended that the heat consumer read and record the
meter data at least on a monthly basis and compare the actual consumption with expected consumption
which is calculated in advance by the heat provider. The consumer is also instructed to report
irregularities such as info-code information to the heat provider immediately when found. It is good
when the heat provider has the right to access the meter without pre-warning in order to read the
meter data and to perform random inspection of the meter installation.
IV.c Different methods of reading
Manually read meters

This is a very common strategy throughout Europe. Usually the heat provider will install the heat meter
and then manually read the meter once or twice a year. This is then basis for the billing.
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The up side is that the company has a good insight into how the customers use their energy as they pay
a visit to every customer at least once a year. The downside is that it takes quite a long time to collect
the meter data and to detect possible errors in the system, both for the customer and for the company.
Figure 4: Schematic diagram of manual meter reading
Self-read meters
Self-reading originally emerged from the manual reading system. In this strategy the company involves
the customer in the meter reading process. Usually the District Heating company installs the heat meter
and then through contractual agreement sets up a system for customer consumption reports. This can
be done in several ways, via, post, telephone or internet. The prevailing system today is based on post.
The customer simply gets a prepared form which the customer then returns after filling in the present
meter digits (data). The company then punches in the data from the forms into their metering systems
which in turn is connected to the billing system.
Remotely read meters

Remote reading covers a wide variety of different techniques. In this report we have divided them into
meters that can be remotely read but require some activity from the company or their contractors and
meters that simply can be read from a computer without activity from the company or their contractors.
Figure 5: Schematic diagram of semi-automatic meter reading
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Remote reading of data is possible from all newer heat meters, usually by optical interface on the meter
or via a specific module with the required interface. Remote data reading can be manual (Walk-by or
drive-by), from the face of the meter or from outside the building via a portable device or it can be fully
automatic (AMR).
The reading can be based on a wired system which then requires a cable to be run from the heat meter
to the point of reading or it can be based on a wireless (radio) system which is simpler to install and
operate. Both solutions must be protected against unauthorized reading of data. Wired systems can be
based on M-bus or one of many industrial standards such as LON®, N2, ModBus, BacNet. Wireless
systems are for example Wireless Mbus, ZigBee®, Z-Wave and other Radio (Mesh)
These systems are mainly used for remote reading over shorter distances. Systems such as tcp/ip, GSM
and GPRS are better for remote reading over longer distances.
With the above methods it is possible to establish semi- or fully automatic data reading systems, where
all meters are read frequently at regular intervals.
The reading system can be established exclusively for the heat meter, or the heat meter can be
integrated in a bigger system covering all the utility meters in the area. The bigger system may involve a
so-called gateway which is dealt with under the M/441 and EN13757.
Online real time meters

A full Automatic Meter Reading system can be set up in such a way that it performs real-time reading at
a certain interval of time or on demand. The data reading is done with less manpower and without the
need to access the premises and thereby without disturbing the privacy of individual consumers.
Local or national regulations may require that the consumer is notified in advance when the reading will
take place. In case of discrepancies MID dictates that the reading from the meter display is definitive.
The benefits of AMR are more frequent and precise meter readings which allow billing according to
actual consumption. It will also allow much more efficient customer services; the meter data can be
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made available on a web server where the consumer can see his own data presented in a graph or in
real figures, of course well protected against unauthorized access. When combined with other data
about e.g. the weather, it becomes an excellent tool to implement further energy saving activities.
Combined with data for “normal” consumption it can immediately reveal tampering or a defect meter.
Figure 6: Schematic diagram of automatic meter reading
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IV.d Good practice examples in metering
Independendly form the installed metering equipment, it is the main aim of metering to provide the
District Heating provider and its customer with reliable data. This data is the basis for billing or
eventually other services. As Good practice examples two different solutions are presented. From a
multitude of examples the following two exemplarilly examples were choosen.
- Detailed consumption report
This example stems from the Finnish District Heating company Tampere District Heating Ltd that
supplies 2,300 GWh of district heat to more than 5000 customers in the city of Tampere and the nearby
municipalities of Pirkkala and Ylöjärvi. The length of the District Heating network is 600 km. The market
share of District Heating is as high as 90%. There are ca. 180,000 inhabitants in the district heated
dwellings.
Tampere District Heating Ltd has completed the implementation of smart metering including automatic
meter management (AMM). The solution covers all of the company’s heat metering points. The project
was carried out during 2009-2010.
Before the actual AMM project was carried out about half of the existing heat meters had to be
renewed in order to be suitable for remote reading. In the AMM project, each heat meter was provided
with a communication module. Communication between the heat meters and the system is carried out
with a combination of M-Bus and GPRS technologies.
Tampere District Heating Ltd has a long-term agreement with a service provider, who is responsible for
the daily gathering and delivery of hourly consumption data to the District Heating company. The
agreement includes both the hourly values of heat energy, water flow, flow and return temperatures
and the monthly readings of heat energy consumption and water flow. Measurement data of hourly
values are transferred to the District Heating company’s customer information system daily and monthly
readings on the beginning of each month.
Experiences of the AMM system and the benefits of it have been exclusively positive. The project was
completed as planned and the targets have been achieved and even exceeded. Both the District Heating
customer and the company benefit from AMM implementation. Furthermore, the investment has been
economically viable.
Smart metering provides the District Heating company with the opportunity to offer new services to its
customers, thereby ensuring customers' satisfaction with their heating system and heat provider. Such
advantages include:
 the customer is no longer required to send monthly meter readings to the District Heating
company,
 District Heating company can analyse the customer's heat consumption on the basis of
hourly values which offers fast and excellent precision,
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 District Heating company can offer measurement data-based tools to its customers e.g.:
 identifying faults in the customer’s equipment or inefficiencies in the heat exchanger
 accurately define the actual need of contracted heat capacity and water flow,
 the customer can follow his own heat consumption more precisely which creates greater
potential for energy efficiency.
AMM enables correct and prompt consumption based billing. Furthermore, the implementation of
AMM has:
 reduced the amount of inaccurate meter readings,

 enabled significant acceleration in billing based on actual consumption,
 improved the management, operation and maintenance activities of the District Heating
network by enabling better:
 optimisation of network dynamics
 optimisation of network pumping
The next page provides an example of a detailed consumption report of a building (in this example an
apartment house in Tampere). The consumption report provides the building owner with hourly meter
readings for an entire year. These readings include the heat demand, water flow, as well as the District
Heating water temperature levels of the inlet and outlet. The customers can examine their operational
data on the District Heating company’s website.
The data and the presentation of it on the consumption report can still be upgraded as to provide
sophisticated energy services for the customers. The information should be intelligible to all types of
customer.
30
- Communication with customers through a webiste:
CYEL (Compagnie de chauffage urbain de Cergy-Pontoise) a French District Hetaing provider north west
of Paris provides its customer with online information through its webiste www.cyel.fr.
The websites informs customers and interested parties in a simple and graphical way about the
environmental and economic benefits of District Heating, what kind of tariffs are available, the local
network, real time information about the service status, and many other services.
The customers can also have access to their last monthly billing from this site.
Picture 1: Screenshot of website on real time information and service status

Picture 2: Screenshot of the website contact page for customer’s requests, complaints, billing
information, hot line…
33
Picture 3: Screenshot of the website page on billing information
34
Picture 4: Screenshot of the website page on the customer satisfaction survey
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V – Billing in the European District Heating sector
V.a Billing as a Communication Tool
The bill as a communication channel of the utility
Introduction
The bill is first and foremost the basis for a utility’s revenue stream. But reducing its role to that of a
mere receipt would not do justice to the importance of billing in District Heating. Under normal
circumstances the bill is one of the few instances where a utility is in direct communication with its
customer. Usually establishing only a one-way communication, the bill still provides a valuable
communication channel for the utility. However, as it has been pointed out, it has to be taken into
account that there are many different types of District Heating customer. Customers vary from housing
companies to end consumers. There are instances in Europe where the bill is only issued to investors
like banks. In that case additional information can be provided to the other parties involved.
There are different reasons as to why the bill is a valuable and important communication channel:
● In a functioning customer relationship it is the only communication that will occur regularly in
relatively short periods of time. Therefore the bill acts like a business card of the utility. This is
also important in the context of customer complaint handling, which will be subject to further
analysis under V.d.
● In a dysfunctional customer relationship the bill will most likely be the motive for customer
complaints. Possible conflicts therefore need to be analyzed beforehand and addressed
accordingly.
● The bill also functions as a tool for communicating the value proposition of the utility. The
customer expects a product that fulfills his or her needs and is ultimately “worth the money”.
This value proposition which is the basis of the whole customer relationship is renewed every
time a bill is issued.
Necessary information
In order for the bill to function properly as a communication channel it needs to contain certain
necessary information. This is also important in the context of the structuring and design of the bill.
The first information that needs to be enclosed and visible on first sight is the sender, in our case the
utility. Ideally the sender information does not only comprise of information on the utility itself, but
contact persons or contact groups (sales, services, accounting etc.) responsible. Especially when dealing
with complaints it is important that information from the customer reaches the responsible person or
group within the utility’s organisation as fast as possible. A reference such as a billing number and/or a
customer code may prove helpful in this regard as well. The chosen hierarchical level should not be too
high in order to be able to involve different management levels in further communication, which can be
important for complaint handling in particular.
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Not only does the customer want to know who the contact person or group is but also how to establish
contact. It is therefore necessary to enclose the contact data. This also includes modern forms of
communication, such as e-mail services. Where applicable the customer should also be informed about
the service hours.
The subject matter or reference is usually not a matter of grave concern in a District Heating bill. There
are however instances when the bill also incorporates information on for instance price amendments or
changes in tariffs. The subject matter should in these cases be formulated carefully and in a positive
way, targeting a customer friendly atmosphere.
The salutation is another necessary part of billing that needs addressing. Salutations should in all cases
be personal and not general. Customers want to be addressed as real people.
Careful thought should be put into the level of language used in the bill. General technical terminology
should be avoided if they are not absolutely necessary for the understanding of the information.
Wherever possible the standard language should be utilised. In the same context abbreviations should
be avoided. This however also depends on the customer relation and the qualification of the customer
in general. District Heating customers are very diverse and so is their knowledge about energy related
issues. Wherever utility and customer meet on equal terms in this regard, a more technical language
may be regarded as more professional.
Useful information
Along with the necessary information the utility may also want to provide additional useful information.
A way of creating a positive atmosphere is putting the bill in the right context of the energy market,
reassuring the customer that being connected to District Heating is valuable both for the customer
personally, as well as society in general. The benefits of District Heating will be elaborated upon further
in the following chapter. An introduction for a price increase could read as follows:
“Dear Ms Smith,
District Heating is the smart solution for the environment. 70 % of the heat you receive is recycled waste
heat from electricity production. The efficient use of fuels benefits the environment as well as your
energy bill. Nevertheless, the fuels we use are also influenced by the fuel costs. The average price for
natural gas has increased by 10 % this year and therefore we must adjust the prices. Fortunately due to
the efficient use of the fuels in our system, internal savings and our tariff structure we can avoid passing
the full price increase on to you. The additional charge is structured as follows...”
The benefits of District Heating and Cooling
Introduction
37
The ecological benefits are a big advantage for District Heating and Cooling in comparison to other
technologies for heat supply. These benefits have usually played a role in the acquisition of customers
under market conditions or the political decisions that lead to a mandatory connection to a District
Heating network in a regulated environment. With growing legal requirements on information provision,
for instance about energy saving measures it is however also important to reassure the customer.
Connecting to District Heating is an environmentally friendly and efficient way to provide space heating
and warm water preparation. This may sound trivial to people involved with the sector but is sometimes
a not well known fact among the customers. With the ongoing debate on climate change, fuel
dependency and energy efficiency, quantitative assessment of environmental impacts become more and
more important for people and companies alike. In this context the bill may be used as a tool to
communicate the benefits of District Heating and help customers assess their environmental footprint
and learn about the positive effects their use of District Heating has on the ecological challenges of
today. This can also help avoiding negative connotations with the bill.
The benefits of District Heating and Cooling
The benefits of District Heating and Cooling are in general the efficient use of various heat sources which
otherwise would be wasted. This can range from fossil based combined heat and power plants to the
use of industrial waste heat and geothermal installations. District Heating and cooling therefore help
reducing greenhouse gas emissions, primary energy consumption and improving the energy system. As
an energy efficiency technology District Heating and Cooling works differently from other energy
efficiency measures such as insulated windows. District Heating and Cooling have no direct influence on
the end use of energy, although as studies have shown District Heating customers on average consume
less energy than consumers of competing heating systems. Instead of focusing on the end use
consumption it is therefore important to focus on the primary energy consumption by evaluating the
energy that is delivered to the buildings. Directive 2010/31/EU of the European Parliament and of the
Council of 19 May 2010 on the energy performance of buildings (Buildings-Directive) therefore
determines that the energy performance of a building shall include a numeric indicator of primary
energy use, based on primary energy factors per energy carrier. When utilising such a system the benefit
of District Heating can be demonstrated by comparing the different primary energy input for delivering
the same amount of heat for various heating solutions. Due to the utilisation of various heat sources and
large shares of recycled heat the primary energy factor will in general be favourable towards District
Heating when compared to other heating solutions. European standards, such as EN 15316-4-5: 2007:
“Heating systems in buildings. Method for calculation of system energy requirements and system
efficiencies. Part 4-5: Space heating generation systems, the performance and quality of District Heating
and large volume systems” include electrical power as well, “using a primary energy factor according to
that part of the fuel mix, which is replaced by heat and power cogeneration”. These European standards
demonstrate the increase in efficiency using combined heat and power in District Heating. This will
reflect the efficiency gains of using energy efficiency technologies such as District Heating and combined
heat and power and mirror these gains in an equally low primary energy factor. Since according to the
Buildings-Directive the primary energy consumption of buildings shall be based on primary energy
38
factors the benefit of a District Heating supply will directly affect the energy performance of a
customer’s building and can be linked directly to legal requirements.
The primary energy factor itself may be too abstract for the average customer to fully comprehend if
said customer is not dealing with energy related issues on a daily basis. In the context of the heating bill
it may also not be appropriate to explain the system of primary energy factors or the consequences it
implies. In order to demonstrate the benefits of District Heating and encourage the customer’s choice it
may therefore be necessary to put the primary energy factor in a context and relate it to other possible
heating solutions and known dimensions. The system of primary energy factors allows for an easy and
holistic comparison between different systems by showing the primary energy input needed to deliver a
unit of energy to the building. In order to communicate this to the customer standard cases for different
heat demand can be presented.
For instance to deliver a standard heat demand of 20,000 kWh/a a District Heating system with a
primary energy factor of 0,7 would need an input of 14,000 kWh/a of primary energy, while an
individual oil boiler with a primary energy factor of 1,3 would need a primary energy input of 26.000
kWh/a. In this example District Heating would help saving 12.000 kWh of primary energy per annum or
roughly 1.200 l of heating oil or 3.192 kg of CO2 per annum, using a specific emission factor for heating
oil of 266 g/kWh and not factoring in losses in conversion since the building envelope is the border of
this examination. This example can easily be expanded to reflect more and different standard cases as
well as different heating solutions to fit the local conditions, where for instance natural gas boilers may
be the dominant market players in the heating market.
Due to the system of primary energy factors the benefits of connecting to a District Heating system are
easily demonstrated. District Heating systems can reach very low primary energy factors if they
incorporate high shares of heat from combined heat and power and/or renewable energy
sources/waste. The Ecoheatcool study (citation needed) has shown that primary energy factors of
District Heating systems can approach zero.
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V.b Tariff structures
The structuring of tariffs is one of the most complex parts in billing in the European District Heating
sector. District Heating is a commodity that supplies the customers’ needs, a necessary investment that
is not connected with emotions. Therefore it is difficult to develop an understanding for the level of
prices, rates and tariffs. As a consequence it is essential to transport the content of tariff structures
easily to the customer. However, in Europe there are several different systems how tariffs are
structured. The next part will concentrate on the Pricing of District Heating and Tariff items.
The fundamental idea of District Heating is to replace primary fuels by infrastructure investments,
enabling the transport of surplus and renewable heat that otherwise would be wasted or remains
unused. When discussing the possible impact of any form of regulation on District Heat, it must be taken
into account that infrastructure costs are comparatively higher than in other sectors, while the costs for
energy (waste heat sources) are lower. This results in a somewhat higher share of the capacity
component in the overall heating price.
In fact, District Heating represents an energy service, where the supply of a comfortable indoor climate
and warm water (including all necessary investments in boilers, connection of surplus heat suppliers,
heat exchangers, storage facilities, network and fuel costs) is outsourced. Through the
monthly/quarterly/annual bill, comprising at least a fixed capacity fee and a variable consumption fee
(and in some cases connection fees, flow fees and seasonal fees), the District Heating provider is
reimbursed for its services and long term investments.
The pricing-policy and procedures throughout Europe are as diverse as are their technical set up and the
regulatory framework they depend on, including the influence of regulation of other forms of heat
supply. Therefore no uniform conclusions can be drawn for the entire European District Heating sector.
Where not under the influence of some form of price regulation, District Heating providers tend to set
their prices below their customer's next best alternative and prices are subject to the market
conditions).
Today there exists no comprehensive and up to date study on the pricing of District Heating exists today.
The main factors for the price setting seem to be the prices of the utilized fuels, the price and availability
of surplus heat sources, the efficiency of the provider, as well as the above mentioned regulatory
framework, the prices of alternative heating solutions and market conditions. Even within countries
prices and tariffs vary significantly depending on the local preconditions.
Legal Framework
The legal framework is the basis of pricing in the District Heating sector. It is a point of principle whether
there is a price regulation actually. It differs throughout the European countries. However, due to
developments in the past in parts of Central and Eastern Europe the pricing of the District Heating sector
is regulated by a pricing agency based on legal guidelines. This agency is responsible for supervising this
regulation and accomplishing the guidelines according to law. Of course each European country has got
its individual, national laws and consequently its own guidelines regulated by different authorities.
40
Prices are calculated according to the so called price-formation law. Furthermore the competition board
often is involved in price-setting and controlling the observation of the legal guidelines. The responsible
authorities differ in the European countries.In contrast to the regulated European countries there are
countries, e.g Italy and Sweden where the pricing of the District Heating sector is not regulated.
Calculation of price
The calculation of price is very complex. The composition of the price varies throughout Europe and
furthermore in its calculation. The District Heating company’s dilemma is on the one hand to cover its
investing costs and on the other hand to provide heat at a competitive price. At the beginning it is
important to decide between cost and market price. In any case, staying competitive with other heating
systems (e.g. oil, gas, heat pump, electricity and biomass) is essential. Therefore in some cases prices
have to be adjusted in order to assure competitiveness.
The basis for the District Heating price on the bill, however, is the consumption. Usually costs are
charged per provided kWh. So applied to an apartment house there is one common meter situated in
the District Heating substation measuring the use of DH in kWh. Another calculation model concentrates
on the size of apartments. There is a basic charge of DH per month per m² of useable living space.
Therefore the heating costs are then divided between the apartments. Charging of the use of warm
water in m³ is based on a similar principle. The use of DH is metered either by specialized companies or
by the DH companies themselves. As a consequence costs thereby incurred have to be paid. The
question is now whether there is a meter fee or any other price for metering services. Principally most
countries have no meter fees or other allowances for metering. However, if there are meter fees these
costs can be shown explicitly on the bill in some countries. Another part of key importance to customers
is the VAT (Value Added Tax). In Europe there is no standardized percentage rate, so the amount of the
tax varies from 5% to 25%, but in most European countries the VAT is between 19% and 25%. Many
countries try to enhance ecological useful developments; therefore taxes are reduced if the renewable
energy share is over a certain percentage rate.
All in all it it is clear that a balance between costs and competitiveness must be established.
Tariff items
Composition of tariffs and its structure
As explained before the calculation of price is a rather complex topic. Therefore in a next step it is
important to analyze the composition of tariffs and its structure. Tariffs can be structured in fixed and
variable price that is based on the consumption. As investments in the DH sector are much higher
compared to other sectors prices are driven by fixed costs. A third part, the connection fee also has to
be kept in mind. All in all there are five different types of tariff items that are in use. First there is the
fixed part, which is difficult to calculate that should cover the fixed costs to some extent. Furthermore
there is the tariff of capacity that is in some way a semi-fixed tariff. The flexible part shows the
consumption of heat or warm water of the customer. Another tariff item that is worth mentioning is the
tariff of return of temperature or flow fee. This gives the customer an incentive to increase efficiency in
41
the substation or heat exchanger. There is yet another type of tariff which varies with the season which
implies frequent metering. Moreover there is a connection tariff that implies a fee for the connection to
the grid itself.
All in all it has to be considered that the mix of the tariff items and the awareness and use of them have
a strong effect on the customer to save energy.
The different tariff items are combined

in various ways to create the algorithm
for calculating the bill:
Fixed ……………..….%?
and /or Flexible…………….%?

and /or Flow fee……………%?
and /or Capacity…………..%?
and /or Connection……….%?
-------------------------------------
Total energy bill 100%
In general it must be considered that there are consumption dependent and consumption independent
costs, overall it can be combined in energy and connection fee. In order to cover the investment costs of
the District Heating Company the costs e.g. for connecting new customers have to be a part of the tariff.
Therefore the connection fee is another part of the tariff that is consumption independent whereas the
consumption dependent part is the usage of heat. Furthermore the connection value of the transfer
station affects the fixed part of the price and is therefore part of the consumption independent part.
To conclude it has to be considered that there are fixed and flexible parts of the price and therefore the
customer has the possibility to affect the price by saving usage only to a limited extent.
Issuing of bills and the District Heating contract
Bills can be issued once a month but are harmonized once a year. Customers have to pay advances
monthly which are harmonized at the end of the billing period. However, this flow depends on the
agreed contract. If harmonization is not used then the total consumption is charged every month. The
duration of contracts varies between 1 month to 6 years, and in some countries they are even unlimited.
Depending on the contract duration companies have the possibility to adjust the prices at a certain point
in time (depending on the contract period) according to the amendment clauses in the contracts if they
are foreseen. In the case of a regulated market this price adjustment must of course be in coordination
with the national price authorities.
Even though the topic of pricing in the District Heating sector depends on several different parameters
the development of the price of DH is much more stable than the development of other energy sources
42
(e.g. gas and oil). Increasing prices or decreasing primary energy prices are passed on with a certain
delay(and therefore to their benefit), and with longer intervals, to the end-customer. However, the main
aim is to improve the utilization of energy and to ensure a higher degree of efficiency. As a conclusion
energy can be used at a lower price as less energy is needed for the same outcome.
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V.c Structuring/Design of Bills
What information is needed?

It must be very clear for the customers, what they are paying for. The bill or invoice can be a monthly or
quarterly bill, where you pay for the amount of energy you have used and the fixed cost for the
month/quarter. Or it can be an annual reconciliation bill, where the customer already has paid on
account over the year.
The following must be provided on the bill:
Name of the customer (can be the house-owner or the tenant)
Address of the place of consumption
Name and address of the company sending the bill
Information about the energy, that has to be paid for:
The period of consumption
Consumption in-dependent pay/ Fixed pay: Can be meter fee, paying for the installed
capacity, paying per square-meter of the house etc.
Consumption dependent pay/ Variable pay: Calculated as the amount of energy in MWh
or GJ or it can be calculated as the amount of District Heating water which has been
delivered in cubic-meters.
Good layout – simplicity / detailed information

Most customers have no interest in spending too much time reading and understanding the bill from a
District Heating supplier. Therefore good care must be taken of the layout so information is very clear
and easy to understand. The core information of a bill should not be more than one page long, in any
case the most important information must be on the first page: Name and address of both
customer/owner and heating supplier, period of consumption, the total amount of money that has to be
paid and the final day of punctual payment.
On the next page, possibly the back side, the total amount to be paid must be separated into in fixed
pay (consumption in-depended) and variable pay (consumption depended). The basis of calculating
which for the fixed pay means the square-meter, installed capacity, meter fee etc. and for the variable
pay means cubic meter of water or amount of energy in MWh or GJ must be visible. The unit price of
each part must also be visible.
Additionally there can be information, or links to the company’s website for information, about
consumption, payments etc. in previous years. –.This will be expanded upon later.
44
Evaluation of energy consumption in comparison to similar customers / customers
Once a year the customer must receive the information about the amount of energy used according to
other similar houses. This is a requirement from in the EU-directive “Energy performance of buildings”
(2010/31/EU ). According to this directive the energy company must once per year inform the customer
about his energy performance during the last 3-5 years and compare his energy consumption to similar
houses. In order to do so, the customers must be grouped for comparison by objective criteria. National
standards may apply.
The age of the house, whether it has been renovated or rebuilt, how many people are living in the house
and the general behaviour of occupants also play a role in the energy consumption/performance and it
will never be possible to make a perfect benchmark.
Reference to websites for further information on billing, energy savings etc.

It is a good service to inform the customer where further information can be found. It can be at the
District Heating suppliers’ website, for instance if the meter is read remotely this information can be
available by using a password on the company´s website.
The customer can also be guided through where to find further information about tariffs and basis of
their calculation. Information about energy savings will also be valuable for the customer.
Information on how to complain

Even though District Heating companies always make an effort to send the correct bills to the customer
errors do occur. Customers can also for other reasons find the bill unfair or unsatisfactory and may want
to check whether it is correct. That’s why it is appropriate to provide information on the bill on how and
where the customers can complain over their bills. References can also be made to a website(s) where
complaints over the energy suppliers or their bills can be made.
More details on how to handle complaints can be found in the next part of this report.
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V.d Customer Complaint Handling8
Customer complaints are a private communication between a company and its customer who
communicates his/her dissatisfaction on a certain subject.
Complaints can also be one of the top level indicators for screening markets, regarding economic and
social outcomes for customers, and identifying where intervention may be needed.
A high level of complaints may indicate problematic issues, but it can also reflect the good functioning of
a market where customers participate actively, being aware of their rights and therefore expressing
their dissatisfaction when a difficulty occurs.
Regarding service providers, the very first step of the complaint process is to allow customers to submit
their complaint without any barrier that would discourage them from doing so and without any
discrimination between some categories of customers. Accessibility and availability of their customer
services is a key issue for ensuring customers’ confidence.
From a customer point of view the following recommendations reflect the need, for availability and
transparency of information, simplicity of procedures and effectiveness. It is in the interest of the
District Heating provider to satisfy its customers by providing a service that outperforms the
concurrence and taking care of possible request and complaints.
 Customers should be provided, on their bills, with the contact details of the service provider’s
customer service.
 Customers should be provided by their District Heating provider with the relevant contact
information of the relevant bodies (regulatory agencies, Ombudsman etc.) in case they want to
complain. The most convenient channels for contacting these bodies should be proposed, among
the following options: address, phone number, website, email, face to face contact point.
In particular:
- Customer service call centres: They should be able to inform customers about the steps towards
the investigation and eventual resolution of a complaint, and the name(s) and contact information
of the relevant third-party body.
- Service provider websites: Any information on complaint handling must be easily found on the
website, including the steps towards the investigation and eventual resolution of a complaint, and
the name(s) and contact information of the relevant third-party body.
 To submit a complaint to a service provider, a wide range of channels should be available, and, as a
minimum, post-mail and phone.
8
For the elaboration of this chapter information of the “GGP on Customer Complaint Handling, Reporting and
Classification” by the European Regulatory Group for Electricity and Gas (ERGEG) was used.
46
V.e Good Practice Examples Billing
As elaborated above, the bill is the main instrument for consumers to understand how much they have
to pay for the energy they consume. In this sense the bill can be an important tool helping consumers
manage better their consumption. At the same time it is the main communication tool for a District
Heating provider to communicate with its customers and receive its revenues. In the District Heating
sector there are many examples that fulfil the criteria of a “good” bill elaborated above. The following
two examples were randomly chosen and present an example of a single family house and an entire
apartment building.
- Danish Budget example
The following example is a translation and the original of an exemplary Danish informationsheet, which
is provided together with the bill. Simply by inserting its own meter reading in the coloum “Actual meter
reading” and comparing it with the figure indicated under “Expected meter reading”, the budget sheet
provides the customer (single family house or apartment) with the opportunity to keep track of its own
monthly consumption and see if the household consumed more or less than in previous years.
This can be an incentive to reduce the housejolds consumption, by changing its behaviour and use of
warm water. In addition it enables the customer to compare its consumption with previous years.
47
Name Customer identification number: ………………...
Address Address of consumption: ………….….……………...
Date: ………………….
Budget for meter reading 2010-2011

This table shows the expected consumption of heat per month next year.
At the end of April 2010 (30. April 2010) your meter reading was 96,345 MWh.
Budget for meter reading

Expected meter
Expected reading
Month % consumption (ultimo month) Actual meter reading
May 4,0 0,681 97,026
June 3,0 0,511 97,537
July 3,0 0,511 98,048
August 3,0 0,511 98,559
September 4,0 0,681 99,24
October 9,0 1,533 100,773
November 11,0 1,873 102,646
December 13,0 2,214 104,86
January 15,0 2,554 107,414
February 13,0 2,214 109,628
March 12,0 2,043 111,671
April 10,0 1,703 113,374
Total 100,0 17,029
This building is registered as being 130 m2
Year 2007-2008 2008-2009 2009-2010
Heat consumption 16,904 15,914 16,065
2
Consumption MWh/m 0,126 0,119 0,120
Average consumption for similar houses
2 0,126 0,114 0,125
(MWh/m )
Trends in consumption
MWh/m2 pr. år
0.15
0.1
0.05
0
2007-2008 2008-2009 2009-2010
Year
48
49
- Consumption report
The next page provides an example of a Consumption report of a Finnish building (in this example an
apartment house). The consumption report provides the building owner with monthly and yearly
temperature corrected heat consumption over a time period of five years. Thereby it is easier for
customers to see the impact of building modifications or for example detect technical malfunctions.
The data is provided in an understandable, graphic manner and therefore it is also of use to non-experts.
The report also includes information on
- accounting of energy costs from the previous year

- comparison with benchmarked energy consumption in the same user category (= reference
value)
50
51
VI – Conclusion
Metering and billing are often two sides of the same coin. Metering can be used just for monitoring
production and consumption but as most District Heating companies today are dependent on revenues
in order to keep the company going metering is also the basis for billing.
Metering should also be regarded in the broader context. As mentioned in the report thereare , and will
be, restrictions for using energy. Energy saving schemes are being developed and some have already
been introduced. Almost every energy savings scheme is dependent on measurements in order to be
able to evaluate the effect of the scheme. Thus metering is needed and sometimes even demanded by
authorities across the whole of Europe. The demands and legislation of each country varies a lot so
there is no way of singling out one single best way of achieving demands of government.
Not only does the legislation vary from country to country, the technology varies as well. As can be seen
in the appendix, the task force sent out a questionnaire at the beginning of the project. The answers
were very disparate and no clear pattern of status on metering and billing could be identified. This is
mainly due to the fact that District Heating is both a heterogeneous business and is built up using
different technologies and both are a result of the fact that District Heating operates under different
legislations. When discussing metering, the technology used is an important factor. The basics of
metering energy within the flowing water are the same but the technologies that are used vary.
Different countries have, often for legislative reasons, chosen different technologies when metering
heat consumption. The development over the years has been a trend towards getting information on
consumption back to the customer closer to the actual usage of the energy. This means that the
gathering of information has to be done faster and more closely to the period in which the energy was
used. In the report there are examples on how to speed up the feedback process.
From a technical point of view the task force notes that the hardware needed to meet present and near
future demands is available on the market. It is just a matter of choosing the technology appropriate for
the District Heating company.
A central and a key stakeholder are the consumers. Without them there would not be any District
Heating systems at all. The consumers have different roles in different countries mainly due to
legislation on consumer rights in the District Heating business and the contractual relations. But one
thing that is common for all consumers regardless of regulation is that they are using the heat.
Therefore, when discussing metering and billing, one has to take into account the consumer incentives
and behaviour. The report points towards technological solutions but in the end it all comes down to
what information the consumer is presented with and how, if at all, the consumer can act upon the
presented information. The report points out the importance of well thought out tariffs and overall
information on energy usage. Without a strategy for information to consumer, whether it is through a
bill or other form of information, the measurements will not contribute to any kind of consumer value.
So what is billing and metering used for and what can be said about metering and billing in Europe
today?
There is no controversy in metering. Measurements are needed in order to be able to evaluate and
develop both the company’s internal activities as well as the customer relations. Basically one can say
that metering has five distinct areas where it is used. These are:
 Environmental purposes (energy saving)
 Customer dialogue (relations)
52
 Financial information (bills and revenues)
 Overall performance of the District Heating operation (keep optimizing)
 Competition towards other form of heating space
In this sense metering and the meter is the basis for all of the above mentioned areas. This can be good
to keep in mind when deciding on strategies for metering. What/which area(s) is/are important for the
District Heating company in question is often dependent on the national legislation.
What is good practice in metering? Good practice in the sense of metering that is beneficiary for both
company and customer is also often dependent on the national legislation. But from a technical point of
view there are today a wide variety of different ways to meter District Heating. It is maybe not the
meters themselves that are complicated. The variety and complexity seems to be more associated with
reading the measurements and gathering the data.
There is no best practice in metering. Good practice is as mentioned dependent on legislation, but it is
also very much dependent on chosen metering strategy. Metering cannot be seen as only a technical
solution on its own. The whole metering system has to be taken into account. However, there is one
thing that emerges as more important and that is fast and accurate feedback to the customer. This is to
ensure that the customer can respond and take measures to save energy if it is necessary. This can be
done in several ways and is in the end up to the District Heating company to find the optimal solution
for its customers.
What is good practice in billing? Billing is one channel through which the District Heating company can
communicate with the customers. Bills are of course financial information and revenues for the District
Heating company but they are also information on energy usage to the customer. Information on energy
usage/consumption and amount to pay can be presented on the invoice but it is not necessary. Here, as
in the other, areas the national legislation affects the District Heating bill. There is however one
denominator for all countries and that is simplicity. The bill needs to be easy to read and understand for
the customer. It is, however, not so easy to obtain simplicity. The report shows that the tariff structure
needs to be thought through thoroughly and the tariff structure should give the customer incentives to
save energy in a way that benefits both the customer and the District Heating company.
Energy is usually something that the common man does not think about and that puts pressure on
District Heating companies to present information that is understandable for the customer. The task
force has found that billing is often the start point for a dialogue between the District Heating company
and the customer. The dialogue is important and must be treated with respect. It is a clear advantage if
there is a structured system for the dialogue.
In a first attempt to structure and generalise the different characteristics of national District heating
sectors and based on the lessons learned during the elaboration of this report the matrix of Figure 7 was
created. Due to the generalisation several detailed specification cannot be considered, which leads to a
simplification. The matrix below describes characteristics in different markets according to the state of
development and regulatory principals. This can be useful to have in mind when studying metering and
billing processes in each separate case. Different preconditions will have a profound effect on
technology used and information needed, both for the customer and the company. The descriptions in
each box in the matrix are derived from the comprehensive questionnaire that was sent out to the
countries at the start of this project.
53
Figure 7: Regulatory / Development - Matrix
State of District Heating Development
Refurbishment ,in
need of upgrade
Expansion/New (low Consolidating (high
(often [not always]
level market share) level of market share)
high level of market
share)
There seems to be a great
There are a lot of
deal of detail in the
similarities to the box on
There seems to be a more regulation in this case. Many
the left. However there is
general approach to District things are carefully defined
one main difference. The
regulated Heating and the regulation on and regulated. Often
regulation seems to be
i.e. some kind of District Heating in this case. metering and billing is
aimed at protecting the
Subsidies are, in this case, often targeted with extensive
strict claimed to be necessary for regulation on how and when
customer to a greater
governmental extent. This is often
speedy development. On the metering should take place
expressed in regulations
intervention other hand regulation to ensure and what information should
that make it more or less
customer protection are also be revealed to the customer.
impossible for the company
present. In some cases the meter is
to enforce deviations from
separately charged for by the
the contract.
company.
This market setup that some
mature markets have chosen
has some regulatory There is not much
frameworks aimed both at information; however
market based
Regulatory principals
There is not much information the industry and the market based influences in
i.e. lack of strict on this case, but the consumer. The emphasis lays this state of development
governmental information that is available on customer protection and are often argued to be
points in the direction of the right to information. In efficient way of distributing
intervention. financing reasons to choose this these markets there are resources (monetary) to
Emphasis on setup. The regulatory often regulations on areas where they are
bilateral contracts framework is almost always information content. In the needed. Metering and
and agreements. general or even unexacting. case there is no regulation billing is sometimes
there are often voluntary regulated to ensure
schemes aimed to provide customer protection.
the customers with
necessary information.
In this setup the hybrid is often
in form of letting private There is not much
Hybrid operators build and operate information; in the case that
i.e. a mix of the Seldom used as
District Heating. The there are some hybrid
refurbishment either needs
two mentioned regulations target customer influences it is often used as
capital from the financial
above. Some security and protection. a means to incorporate
market thus a market
Operations are often protected incentives for some of the
areas are strictly based system is preferred
from competition from market actors. Information is
regulated and or it needs capital from the
alternative heating and in important in consolidated
some areas are state or municipality and
return the operator has to markets therefore metering
thus regulation is
left to the market deliver heat to customers in a is essential. In this setup it is
preferred. Hybrid does not
actors to define certain period for a price that is used both as information for
fit in this setup.
in most cases regulated. energy conservation and as
and agree upon Metering is mostly just used as financial information.
basis for billing.
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VI.a Smart (heat) metering - Towards integrated energy solutions
Optimal energy solutions can only be achieved when more emphasis is put on the dynamic interaction
between generation, distribution and demand of a single energy system but also between the different
services provided at cities / regions level. This integrated approach is the basis of the development of
Smart Cities and smart metering has a key role to play in this context.
No official definition of the term “smart metering” exists and therefore it is used and understood in
different ways. Anyhow there seems to be a common understanding that a smart meter is a meter that
records time of use of energy consumption and makes this information available.
The Energy Services Directive (2006/32/EC) mentions in Article 13 the need to provide final consumers
with competitively priced individual utility meters that accurately reflect the final customer's actual
energy consumption and that provide information on actual time of use. In addition the third
liberalisation package for the electricity market (2009/72/EC) requires the implementation of
"intelligent metering systems". Such systems must be in place for 80% of electricity consumers by the
end of 2020.
As already mentioned in chapter II.b, the European Commission gave a smart metering standardisation
mandate (M/441) to the European Standardization Organizations, CEN, CENELEC and ETSI. The general
objective of the M/441 mandate is to create European standards that will enable interoperability of
utility meters (water, gas, electricity and heat), which can then improve the means by which customers’
awareness of actual consumption can be raised in order to allow timely adaptation to their demands
through the interaction between the different energy networks at city / region level (‘generally referred
to as SMART METERING’). As the smart grid development at least in the public debate seems to be
mainly driven by the Electricity meter sector, the interoperability with other non-electric meters is key.
Mainly driven by the electricity sector, “smart”, “intelligent” or “advanced” metering has received a lot
of attention and current R&D efforts seem to be in line with permanently developing customer
expectations. It is in the heat metering manufacturer’s interest to use and be in pace with the
momentum generated by the electricity market. Through the above described mandate 441 it seems
that the interests of District Heating are for the moment sufficiently covered.
Like for electricity or gas the smart heat meter is a multifunctional meter that provides plenty of
valuable information. It makes available data about the use of energy: what type (heating, cooling, hot
water), how much, where, and when it was consumed.
A smart heat meter fulfils additional requirements unique to the heating and cooling sector. Where
necessary it supports systems that provide cooling in summer and heating in winter, enabling
differential billing. Because of a variety of connections to sensors temperature and flow, the smart heat
meter can provide an exact picture of energy consumption including system temperature monitoring.
More specifically smart heat meter could also be able to control a control device that manages delivery
of heating or cooling to the customer. The smart heat meter has communication technologies such as,
GSM, M-Bus, LONWorks or ZigBee, which provide a flexible interface for integration into BMS and AMR.
55
Two-way communication can even widen the possibilities and should represent the standard in the
future. Services based on a smart meter include instant failure and leakage detection systems, system
optimisation both on the primary and secondary side or generation projections.
“Smart” heat meters provide benefits for both consumer and utilities, but do definitely come at a
certain cost. As a technology competing with other heating solutions, it will be crucial for District
Heating providers to outperform their concurrence and provide customers with the services they
request.
Concerning technical issues it might not be the heat meter itself that requires further improvement but
its interaction with the entire energy system. As the Smart Cities European Industrial Initiative and
Technology Platform should be up and running in 2011, with the establishment of a Stakeholder
Platform scheduled for the beginning of the year and the launch of the first call for Smart City proposals
in mid-2011, the District Heating sector should be sure to be part of these developments.
More specifically it would be important to establish a mutual understanding for the term "smart heat
grid". This also includes specifying the open data interface and especially the needs from District Heating
companies' point of view.
VI.b Recommendations, Future outlook and developments
Intentionally the Task Force decided not to recommend a particular technical metering system or
specific legal framework conditions, as the vast local variations and historical backgrounds do not allow
for it. Still different system operators as well as legislative decision makers should be inspired by this
report and be enabled to further improve their national local systems and practices.
During the elaboration of this report and its frequent meetings the Task Force noted that considering
metering and billing in the District Heating sector, the existing hardware and therefore metering
equipment is fit to meet current demands and expectations by customers and District Heating providers.
It is a question of cost and benefits, as well as of legal requirement that are the main denominator of the
installation of a certain metering technology. Changing customer expectations have to be anticipated by
our sector to succeed in keeping current customers and connecting new ones.
Regarding the energy bill the main conclusion and recommendation that can be drawn from this report
is to keep it simple and understandable. Some good examples are presented in this report and it has
been shown that “good” bills can be generated regardless of the metering or cost allocation (e.g.
evaporators) equipment in place.
Regarding pricing of District Heating, the report does not include a description and analyses of the
different national systems, due to their complexity and diversity and because it would have been
beyond the capacity of the group. Detailed comparative information on this topic does so far not exist. If
necessary this task would require the setup of another Task Force.
Looking at the issue form a wider perspective and not only considering the metering “hardware” and
general billing policies the heating markets as a whole are characterised by considerable changes and as
a result the District Heating sector faces a variety of challenges.
56
The public debate has identified Climate change as a threat to mankind while at the same time
increasing dependency on foreign energy imports put the economic prosperity and development of
European at risk. Through a variety of trends backed by legislative measures on several levels, European
heating market will change in the mid- and long term future. District Heating will profit from these
challenges, if it is able to adapt and further develop its “smart” technology. Therefore the Task Force
recommends investigating the setup and demands of future heating markets as well as the
requirements of its customers. Such assessment strategies should be elaborated to even further
develop District Heating and allow it to cost-effectively meet the upcoming challenges and conditions.
Another outcome could be the development of new services or products for our sector, to ensure a
prosperous business development.
This report and the interaction of the Task Force with a variety of stakeholders representing customer
interests has shown that the customer expectation concerning heat are not fully understood and are
partially contradicting. While it is obvious that heat customers prefer low energy prices, the supply of
sustainable or “green” heat comes at a certain cost. At the same time many customers do not seem to
know or care how their apartments and houses are heated as long as it works. Therefore Security,
Stability and Trust are key to satisfying customers. The District Heating sector would be well advised to
further investigate customer expectations and deepen its relation with entities representing this group
of stakeholders.
In several countries specific systems were set up by the District Heating sector to improve
customer/consumer satisfaction and communication between the supplier and its customer. A certain
level of autonomy of these systems was necessary to ensure participation of consumer (groups). As far
as the Task Force has seen these systems have been successful in their aim and it could be worthwhile
to further spread the idea of these voluntary systems, in particular to those countries where problems
persist.
On a European level the Commission is expected to work on and present several pieces of legislations
and Communications with direct impact on billing and metering, but also for the more general issue of
consumer protection/empowerment. (e.g. Directive on energy efficiency and savings, Communication
on Consumer Policy Strategy, Communication on consumer Empowerment). It will be crucial for
Euroheat & Power and its members to continue to share its knowledge and view points and proactively
support the commission in its efforts to maximize the efficiency of energy use throughout the European
Union.
57
Annex 1: Comparative summary of questionnaire
For the elaboration of this report a questionnaire was established and answered by District Heating
stakeholders throughout Europe. The comparative summary of these questionnaires can be accessed at:
www.euroheat.org/Files/Filer/documents/Publications/billing_metering_summary.xls
Legal Disclaimer
Euroheat & Power accepts no responsibility or liability whatsoever with regard to the information of this
document.
This information is:
 of a general nature only and is not intended to address the specific circumstances of any
particular individual or entity;
 not necessarily comprehensive, complete, accurate or up to date;
 not professional or legal advice
58

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Final Report

Good practice in Metering and Billing

Prepared in 2010 and 2011

Avenue de Tervuren 300,

III District Heating Customers ............................................................................ 11

IV – Metering in the European District Heating Sector......................................... 18

V – Billing in the European District Heating sector ............................................... 36

Annex 1: Comparative summary of questionnaire ............................................... 58

To whom is this paper addressed

Why District Heating?

 Recast of the EPBD 2010/31/EU9

1. MS shall ensure that, in so far as it is technically possible, financially reasonable and

Size and capacity

Contractual relation to the customer

III.b Customer requirements

1. A majority of the members heat deliveries must be within the system

Reko today consist of these main components

 Customer relations quality requirements

 Reko meetings with the customers

Meters – the heart of the business

Metering is basis for billing

Billing according to meter read consumption

Heat allocation (or sub metering)

Structure of energy price

Ownership of the meter and the data

The formula for heat transfer calculations is:

A heat meter consists of 3 sub-assemblies:

Figure 3: Heat meters’ sub assemblies

Furthermore some strategic requirements may be added:

Advantages of these meters...

Methodology - different approaches

Cost, of purchasing the meter

Purchase and installation of meters

Usage and maintenance

IV.c Different methods of reading

Manually read meters

Figure 4: Schematic diagram of manual meter reading

Remotely read meters

Figure 5: Schematic diagram of semi-automatic meter reading

Online real time meters

Figure 6: Schematic diagram of automatic meter reading

- Detailed consumption report

 reduced the amount of inaccurate meter readings,

Picture 1: Screenshot of website on real time information and service status

The bill as a communication channel of the utility

The benefits of District Heating and Cooling

The benefits of District Heating and Cooling

Composition of tariffs and its structure

The different tariff items are combined

and /or Flexible…………….%?

Issuing of bills and the District Heating contract

What information is needed?

The following must be provided on the bill:

Name of the customer (can be the house-owner or the tenant)

Address of the place of consumption

Name and address of the company sending the bill

Information about the energy, that has to be paid for:

The period of consumption

Good layout – simplicity / detailed information

Reference to websites for further information on billing, energy savings etc.

Information on how to complain

- Danish Budget example

Address Address of consumption: ………….….……………...

Budget for meter reading 2010-2011