* Pioneer Italy has smart meters in 90 pct of homes
* Two-way meters cut reading cost, give real-time usage data
* EU utilities to spend 15.8 bln to install 110 million meters
* Boost for meter makers Landis+Gyr, Itron, Echelon
By Stephen Jewkes
BOLOGNA, Italy, May 30 (Reuters) - European utilities are taking a cue from Italian state-controlled power provider Enel , the pioneer of digital electricity metering which has driven installation levels to more than 90 percent in Italian households.
The smart meters allow utilities to collect real-time data on customer consumption and manage networks remotely, eliminating the need to send out costly technicians and visits by meter readers.
France plans to deploy 35 million by 2020, Spain 13 million by 2018, while the UK will kick-start efforts in 2015 to cover 30 million properties over five years.
A report by Berg Insight estimates around 15.8 billion euros will be invested to install 110 million smart meters in Europe by 2017, a potential boon for meter makers like Switzerland's Toshiba-owned Landis+Gyr - Europe's market leader - and Itron and Echelon of the United States.
But take-up has been patchy so far despite a European directive in 2009 requiring 80 percent of EU households to have smart meters installed by 2020 as part of an environmentally-driven scheme to promote greater awareness of energy use.
For consumers, the meters are a way to monitor their energy use, though critics say the devices are costly, of little practical use and a threat to data privacy.
"Customers are increasingly aware of their own consumption patterns and are more motivated than ever to save energy, thanks also to the information provided by the smart meters" Livio Gallo, Director of Infrastructure and Networks at Enel, told Reuters.
Enel, which has placed 40 million meters worldwide since 2001, has invested 2 billion euros ($2.6 billion) in installing 34 million with its own clients, saving 500 million euros a year.
It is betting on repeating the experience abroad.
Enel plans to invest 1.4 billion euros to install 13 million meters in Spain and Latin America. It also aims to deploy in Romania and has piloted its technology with utilities in Russia, the Philippines, Hong Kong and China.
Countries can mandate meter deployment through the regulator, with guaranteed return on investment for the utility, or favour a market-driven approach where utilities decide whether, where and when to invest in meters.
The risk of the latter is that take-up may disappoint.
An initial market-driven approach in Germany, Europe's most promising meter market, fell flat and a more regulation-based approach is now being considered.
Compared to the average smart phone, smart meters are actually quite dumb. They relay information back and forth in real time and can provide accurate and transparent billing.
But for many people that's not enough.
"It's downstairs in the basement. Yes, it's got information and I think it can tell you things, but who's got time for all that? I need to see it on a screen in my home," Bologna real-estate agent Salvatore said.
Apps displaying energy dashboards on smart phones, able to show a consumer how much energy he is using at any time or place, are in their early days. They could help personalise energy tariffs, steering consumption to greater savings.
"If you see usage information on a regular basis, you see opportunities to save. The average savings is 10-20 percent on an energy bill just from seeing usage patterns," said John McDonald a director for GE Energy Management's digital energy business in the United States.
Gas meters are also smartening up.
Italy's regulator wants digital gas meters to be rolled out from 2014 and distributors like Italgas, owned by Snam, have already carried out trials with suppliers to test technology.
An industry source said that with some 18 million gas meters to replace, manufacturers would not be able to get up to speed to meet demand unless rollout was gradual.