Smart meter rollout consultation launched in U.K.

Malcolm Wicks,
Energy Minister,
U.K. Government
London, U.K. — (METERING.COM) — August 6, 2007 – Following the announcement in its Energy White Paper to rollout smart meters and real time visual display units to households and businesses, the U.K. government has launched a consultation on the billing and metering policies outlined in that document.

In particular the consultation is seeking views on the proposals to promote awareness of domestic energy use through a requirement on energy suppliers to present consumption data, preferably in graphical form, on consumers’ bills and to provide real time display units to certain customers, and to require the installation of smart meters for business customers above a certain energy usage threshold, where it has been proven to be cost effective.

In addition the consultation is soliciting views on the introduction of smart metering in the remainder of the business sector and the domestic sector over the next decade, and how these smart meters might be so deployed, including the method and costs of doing so.

The consultation says that the government, in its response to the European Energy Services Directive, considers that there is evidence that smart metering would be cost effective for a bloc of business customers with medium levels of use, and proposes to require that these customers be provided with smart meters. However, the government believes that for the smallest business customers and in the domestic market at this time smart meters do not appear to be financially reasonable and proportionate in relation to the potential energy savings (exceptions, in which smart metering is theoretically cost effective, being prepayment meter customers or those to whose meters it is difficult to gain access, representing around 25% of this market).

However, the government expects this position to change, and says it is committed to promoting that change. Smart metering technology, and in particular the communication technologies necessary to support smart metering, is still evolving, and at the same time, the range of costs is becoming more fully understood and is falling.

The consultation says that there are several approaches that may enable the government to realise its vision for rolling out smart meters over the next ten years. Illustrative options put forward for comment include:

  • Taking no further action beyond mandating smart meters for business and providing policy certainty, and then relying on suppliers to take forward the agenda
  • Requiring all new and replacement meters to be smart
  • Requiring all meters to be smart within 10 years (or a similar timescale).

All of these assume that an interoperability standard is required between suppliers to avoid the need for customers to switch meters when they change supplier and, as a result, minimise the potential for asset stranding reduce the risk of asset stranding.

With respect to the billing changes, the consultation says the government will ensure that information showing the customer’s energy consumption for the current billing period compared to the same period in the previous year is provided on domestic customers’ bills as soon as possible. In doing so, flexibility will be given to gas and electricity suppliers to deliver this in the most appropriate manner.

At the launch of the consultation energy minister Malcolm Wicks said that smart meters in every home and business will play a key part in reducing the U.K.’s carbon footprint and cutting its energy bills. “It is vital that we make best use of this emerging technology that will not only help cut our energy use but reduce our bills too.”

The consultation will end in October, with responses available the following month. Between December to March 2008 changes will be introduced to the supply licences for the three core policies on billing, displays and smart meters for business. At the same time suppliers should begin to prepare for compliance with the new licence conditions, with a view to reaching the May 2008 implementation deadline for the Energy Services Directive.