DIGITAL WEEK: suppliers told to complete smart meter rollout by mid 2025

Recently Scottish and Southern Electricity Networks (SSEN) announced it will use ‘near real-time’ data to respond to power interruptions (see below). It said that a million of its customers now have smart meters and the Department for Business, Energy and Industrial Strategy said that the end of March 2021, there were 24.2 million smart and advanced meters in homes and small businesses across Great Britain, representing 44% smart coverage across the nation. Ofgem also says that three million non-domestic meters (across two million sites) are within the scope of the smart meter mandate. Around 70% are microbusinesses but the group includes some pubs and restaurants, shops, schools and local authority buildings. At the end of Q1 2021, 45% of non-domestic meters were operating in smart mode, with 1.46 million smart meters and advanced meters across small non-domestic sites.
How long will it be until all consumers and small businesses have smart meters? Before the Covid lockdown slowed the rollout in 2020 the target date had already softened, to require 85% of meters to be installed by the end of 2024. But Ofgem said the pandemic also reinforced the importance of smart meters, noting: “COVID-19 has brought into sharper focus the benefits of moving to digital services across the economy, including in energy. For example, consumers with smart meters being better able to monitor their energy use and those with smart meters in pre-payment mode being able to top-up remotely from the safety of home.” It says, “The case for smart metering has never been more compelling than it is now”, and it wants to highlight role of smart metering in supporting the UK’s net zero commitment. “The Energy White Paper positioned smart metering as an essential infrastructure upgrade which will make the energy system more efficient and flexible, helping to deliver net zero emissions cost-effectively.”
Covid measures slowed the rollout dramatically, but Ofgem says most energy suppliers have now returned to pre-COVID-19 installation levels and in some cases are installing at a higher rate. Now a new framework that will come into effect from 1 July, there will be binding annual installation targets for all suppliers and Ofgem will give suppliers until mid-2025 to complete their rollout. Suppliers will be required to set annual installation targets and report progress against them on their websites under the revised obligation which will commence on 1 January 2022. The obligation extends to small energy suppliers, suppliers in controlled market entry and gas-only new entrants.
In its summary of responses to a consultation on new targets Ofgem gave short shrift to suppliers who argued that consumer demand was delaying the rollout. It disagreed with energy suppliers’ claims that consumer attitudes have worsened as a result of Covid and that negativity would have an enduring impact. It said evidence “does not show that underlying attitudes have changed …Similarly, we do not consider that the evidence used to support our consumer demand projections is over-optimistic or unrepresentative of consumers’ preferences across the board.”
It said that there was no evidence of an increase in ‘hard-to-install’ premises – in fact, completion rates have slightly improved, suggesting that energy suppliers are benefiting from past experience in relation to expertise, consumer engagement and operational capability. It acknowledged that during the remaining rollout there will be a growing proportion of customers who do not want to accept a smart meter but said those installations will not be technically any harder to complete. In contrast, new solutions meant some premises which been technically ineligible are now eligible.
Instead, Ofgem said that rates of installation in 2018 and 2019 suggested that some energy suppliers had been reducing their installation work force, “to the point when it is now insufficient to meet potential consumer demand”. It added that, “some energy suppliers are delivering consistently better completion rates than others, which continues to suggest that it is possible for other energy suppliers to improve their performance significantly.”

Small suppliers
The regulator also declined to give an easier ride to smaller suppliers – defined as those with fewer than 150,000 accounts.
Smaller companies feared they would have less buying and borrowing power, putting up installation costs, and they disagreed with Ofgem that their customers were likely to be more positive about smart meters because they were engaged enough to switch. But Ofgem said they had not presented evidence that their disadvantages outweighed advantages.
The argument that their costs would be disproportionately high because Their argument wrongly implies that the entire deployment cost is incurred in-year, when instead it is spread over the lifetime of the smart meter asset. This reverses the effect and highlights that a large energy supplier with higher penetration and a larger customer base will be in fact paying more on a per-customer basis as a result of costs incurred in previous rollout years being spread into the current year.
It said implementation costs alongside other growth costs for a small supplier were ‘well understood’ and may be lower because they small suppliers tended to use newer, lower-cost technology options and had not incurred the costs of testing activities. What is more, meters are procured by not directly by the supplier but through third parties who manage the meter assets and have scaled buying power.

Smets 1 relief
The regulator had some positive news for suppliers who feared they would have to replace early-version (Smets1) meters alongside new installations. It said the project to enrol Smets1 meters in the central DCC hub was “operating at pace” – a tranche of 3 million was adopted in February – so it expects there to be relatively few Smets 1 meters that would have to be replaced. Nevertheless it promised to review an obligation that requires al Smets 1 meters to be replaced with SMets2 versions by the end of this year.
One respondent said that drawing a line to 100% smart coverage by mid-2025 was rather arbitrary and that setting accurate annual targets was impossible, as demonstrated by overly optimistic projections made by large energy suppliers to Ofgem in past years.

SSEN combines smart meter data with call handling
Scottish and Southern Electricity Networks (SSEN) announced it will use ‘near real-time’ data to respond to power interruptions. Smart meter data, now available from one million of its customers, will be used in identifying the fault location, providing updates on households returning to power and reducing the duration of power interruptions.
Currently SSEN finds out about interruptions through systems monitoring and customer calls. Now customer contact staff responsible for customer interactions and engineer dispatch have been trained to use the information provided by smart meters.
If there is a power cut SSEN’s system will check if there is an existing issue or planned supply interruption. If not, the system will alert staff and support a targeted response.
When the power is restored at a household level SSEN will be updated and staff alerted.
Following a repair smart meters will be able to update SSEN on network performance, to help identify nested or secondary interruptions on the network.
Automatic supply status checks will establish when a customer calls whether a power problem is internal to their property.
Automated filtering will ensure SSEN focuses on alerts affecting its own customers and network.
Later stages will see smart meter information used to support customers by enhancing network planning, load forecasting, and network operations.
Paul Fitzgerald, SSEN’s Smart Meter Programme and Performance Manager said: “Alerts sent directly from smart meters will help us to reduce the duration of interruptions by providing information to aid location and confirm exactly which customers are off supply. Alerts will also confirm when all supplies have been restored in near real-time. Remotely checking the supply status of an individual or group of properties improves our response to power outages and service to customers”.

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