UK Announces Visionary Smart Meter Policy

December 2, 2009 at 5:51 pm

The UK Government announced today its response to a stakeholder consultation on how to achieve the UK’s goal of providing smart meters – both electric and gas – to all consumers by 2020. It’s a big step forward by adopting the Central Communications Provider option, wherein a centralized communications and data management provider will serve all 47 million smart meters in the UK capturing scale economies (Ontario, Canada is successfully operating a similar model, but without the communications element).

The Government found: “Smart metering will also deliver a range of direct benefits for consumers including: real-time information to enable better management of energy and save on bills; faster switching which will drive competition; accurate bills and fewer problems with billing; a wider range of tariffs and services; and better informed energy advice; lower costs for pre-payment users. Overall we estimate that by 2020 on the basis of 2-3% energy savings, the average dual fuel customer will benefit by £28 per annum.” ($47 USD)

The report also adopted Retailer-led meter purchasing and installation and standard smart meter functionality (more on this in a future blog). It’s also positive that the Government has eased its monolithic position slightly on in-home displays and is open to considering a variety of IHD options – rather than a vanilla, universal device – and even alternative information delivery approaches, such as email and consumer engagement software.

At the same time, the Government missed an opportunity to take positions on many of the items that are listed for consideration in Phase 1 of the stakeholder implementation process, to be completed by summer 2010. Some key items are what happens to smart meters installed before the rollout (i.e. ensuring they do not become stranded), what the requirement will be on Suppliers to install meters (i.e. is there a percentage per year, a final target, or something in between?), what happens when a customer switches (i.e. how does the Supplier recover its investment in the smart meter?), and what the role of the distribution network companies will be (i.e. how do they get the smart grid benefits associated with smart meters?).

With Phase 1 extending to next summer – in line with the timing of the national election – and the detailed design phase following that, it appears procurement of the CCP will take place sometime in late 2011 and implementation will be completed in 2013.

It’s important that Retailers have the ability to start installing smart meters much earlier than that. It appears that Phase 1 could be a valuable opportunity to define everything necessary to allow that to happen, and that smart meter installations could occur in parallel with the CCP implementation (which is exactly what is happening in Ontario, Canada, and Texas).

Let’s hope the UK takes advantage of the Phase 1 opportunity!

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