Directive 2006/32/EC on energy end-use efficiency and energy services (the Energy Efficiency Directive) contains provisions regarding the installation of “intelligent metering systems, with the aim of better informing customers of their consumption and helping to increase energy efficiency awareness” by 17 May 2008. Intelligent metering systems or “smart meters” have the capacity to display and transmit information about energy consumption (principally gas and electricity) on an almost real time basis. As different appliances in the home can give distinctive recognisable “signatures”, that information may reveal details about occupancy and certain activities in a person’s home. As such, the installation of smart meters and the capture, ownership and onward transfer of the information they provide raises privacy concerns that governments and/or distribution system operators across the world have addressed with varying degrees of success and prior consideration.

In the Netherlands, the bill implementing the Energy Efficiency Directive sought to make the installation of smart meters compulsory when an existing meter is replaced, a new connection is made in a new building or when a building undergoes major renovation.

Following consumer concern as to the mandatory nature and scope of information that would be acquired, the Dutch consumer organisation commissioned a report by Tilburg University as to the legality of such a requirement. That report concluded that the compulsory installation of smart meters in private homes would infringe the right to privacy as stipulated in the European Convention of Human Rights and the Dutch Data Protection Act.

After a lengthy debate in the Upper Chamber of Dutch Parliament in 2009 on their compulsory installation which concluded with the Upper Chamber requesting the bill be amended so that installation was voluntary, the Dutch Minister of Economic Affairs (MEA) promised to amend the bill to accede to its request. To date the MEA has not submitted a revised bill.

Under Article 8(2) of the European Convention on Human Rights, the right to respect for a person’s private and family life, home and correspondence can be overridden, subject to certain other conditions, where in the “interests of….the economic well-being of the country". The Dutch debate is therefore now focusing on the balance between the claimed environmental and economic benefits in understanding and controlling energy consumption in the home against the legitimate right to keep one’s domestic activities private.

What is clear is that the scope of data collection, its ownership, its sharing, its security and secondary uses (commercial and public) in this sphere will receive more attention as consumers and privacy groups become more aware of the potential of these devices and that unless these concerns are addressed adequately the potential of smart meters and smart grids may take longer to realise.

On a more general note, wider privacy issues arise as more and more household and consumer items are enabled to collect and transmit information and this is connected back to the individuals using or owning them: we expect further regulation and enforcement in this area as consumers wake up to what is already collected and used in this way.