More accurate settlement with smart meters could lead to £50 million saving in U.K., study finds


London, U.K. — (METERING.COM) — March 25, 2011 – Using more modern, advanced electricity meters to make electricity settlement more accurate in Britain, savings of more than £50 million over the next five years are possible, the nation’s balancing and settlement services provider ELEXON has found.

In a cost-benefit analysis of half hourly settlement for larger non-domestic customers, ELEXON found that an investment of £35.1 million in changing systems and processes could lead to savings by suppliers of £85 million by making electricity settlement more accurate.

Approximately 164,000 customers fall in this category, accounting for 18 TWh of annual energy, or 10 percent of the non-half hourly market‘s energy.

The costs comprise a one-off transactional cost of £4.1 million to change all the customers to half-hourly settlement by 2014, along with annual operational costs of £6.2 million.

The benefits are estimated at £17 million annually, resulting from better risk management for suppliers and potential less exposure to imbalance costs, more accurate demand forecasting, more cost effective tariffs, reduced carbon emissions, peak load shifting and demand side reduction.

The analysis was based on data provided by the suppliers, appropriately baselined, and forms part of a broader profiling and settlement review. Other findings from the supplier survey were that there is support from most parties for half hourly settlement at some time in the future, and it is more efficient as the settlement uses the data recorded by the meter, rather than load profiling and non-half hourly estimates.

In a statement ELEXON comments that moving to half hourly settlement for the larger customers is an excellent opportunity for suppliers to trial half hourly settlement ahead of the rollout of domestic smart meters to 29 million homes in Great Britain by 2020.