Utility Week

UTILITY WEEK | 3RD - 9TH MAY 2019 | 15 Policy & Regulation Installation rates According to the latest figures from the Department for Business, Energy and Indus- trial Strategy (BEIS), five million smart meters were installed in homes and busi- nesses across Britain in 2018, an increase of 3.5 per cent on the previous year. In total, almost 14 million smart and advanced meters are now operational. That said, the latest figures from BEIS also indicate that installation activity by large energy suppliers was down by 16 per cent in the final quarter of 2018 compared with the same period of 2017. Several big six suppliers have spoken out in response to this and have insisted they are "committed" to meeting their obligations. SSE, which recently paid £700,000 to Ofgem's consumer redress fund to make amends a'er failing to meet its gas smart meter targets in 2018, believes the govern- ment should take a more "flexible" approach to the 2020 deadline. A spokesperson for the company says: "Our commitment to the smart meter rollout and meeting our milestones won't relent, but we continue to believe that the government should adopt a flexible approach to the 2020 deadline to ensure the programme offers consumers value for money and customers' experience remains positive." Despite the negatives, BEIS still insists this "world-leading" upgrade will see smart devices becoming a "cornerstone" of the move to build a smarter energy system of the future. A BEIS spokesperson says: "Millions have already chosen to have a smart meter and take control of their energy bills. We've said everyone will be offered a smart meter by the end of 2020 to reap these benefits and we will meet that commitment, with suppli- ers maintaining the rate of installations in this latest quarter. "This world-leading upgrade has seen more than five million smart meters installed in 2018, which will become a cornerstone of our move to a smarter energy system of the future, bringing benefits to consumers and industry worth up to £40 billion." Meanwhile, the latest figures from the DCC show more than 500,000 SMETS2 devices have now been installed. A spokesperson for the DCC says: "SMETS2 installation rates are rising and the DCC continues to support energy suppliers with their smart meter rollout plans." Regulatory interventions But what is Ofgem's take on the rollout? While not responding directly to Utility Week's request for comment, Ofgem pointed to previous interventions it has made throughout the rollout. A recent notable intervention from the regulator saw challenger supplier Avro Energy, which was ordered to become a user of the DCC by 25 July. Ofgem issued Avro with a final order on 3 April, which means the supplier could be banned from taking on new customers from 26 May if it fails to comply with the order. All suppliers were required to become DCC users by 25 November 2017 to help drive the installation of next-generation SMETS2 meters. Meanwhile, suppliers with more than 250,000 customers are required to set indi- vidual annual targets for their installations, which are monitored by Ofgem. Similar to the already mentioned case of SSE, EDF was another big six supplier that paid into the redress fund a'er the supplier failed to meet its annual installations target for its customers in 2017. In both cases, the regulator decided not to pursue formal enforcement action against the suppliers because of the steps they took. Ofgem says it "is closely monitoring suppliers' approach to the rollout of smart meters and will hold suppliers to account if they do not meet their obligations". Deadline extensions Another key sticking point in the rollout has been the extension of deadlines. Initially, the end date for regular SMETS1 installations was set for 13 July 2018; it was then pushed back to 5 October, before being extended further to 5 December. Meanwhile, the deadline for prepayment meters was set for 15 March this year. Following the deadline, installations of SMETS1 meters do not count towards the rollout – and here lies another problem. Recently it was revealed that several big six suppliers were continuing to install SMETS1 devices, even though the deadline had long since passed. Companies have cited technical issues in the DCC's northern region, namely Scotland and northern England. Some suppliers claim they have been unable to install SMETS2 meters due to problems connecting to the DCC's network. The DCC insists it is supporting suppli- ers to rectify the problems in the North and that the suppliers have been "testing better hardware". Delays to the process have resulted in the delivery taking longer to implement. Mark Coyle, chief strategy officer at so'- ware company Utiligroup, is of the view that offering smart meters is "only the start of a complex process". Coyle adds: "It is possible to make the customer offers by 2020, but the delivery was always going to take longer than that based on the delayed rollout commencement for SMETS2 meters and the complexity in reaching all properties." Still, this particular incident highlights the myriad issues that have plagued the smart meter rollout from conception and look set to continue to haunt suppliers until completion. Even as recently as the beginning of April, BEIS delayed the start date of an obligation on energy suppliers to install a smart meter when replacing a traditional meter, or fitting one for the first time, to 30 June – three months later than originally planned. With the tabloid media turning the smart meter rollout into a bogeyman, it seems every one loves to hate a struggling govern- ment initiative – and this is no exception. There is no denying that smart meters are the future of energy consumption – our lives are governed by handheld smart devices already. Yet the smart meter rollout has so far been deeply flawed. The public needs more confidence in the devices – so far they have little to shout about. Almost 14 million smart and advanced meters are now operational

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