Utility Week

8 | 6TH - 12TH SEPTEMBER 2019 | UTILITY WEEK Policy & Regulation Analysis A er years of planning, the latest smart meter installation figures published by the government on 29 August mean the 2020 deadline is all but impossible to meet. Hampering the rollout is the fact that for the most part, installation rates are decreasing every quarter. According to the figures, just short of 15 million devices were in operation as of the end of Q2 2019, a 4.2 per cent increase on the previous quarter. Yet rates of installation among larger suppliers fell 2.2 per cent compared to Q1. The definition of large supplier used by the Department of Business, Energy and Industrial Strategy, encompasses those companies usually referred to as the big six together with mid-tier retailers. Why the slowdown? As the 2020 deadline looms ever nearer, why then are we seeing the decrease in the rate of such installations? Michael Jary, managing director of Energy Tech Consultancy, believes the answer lies with the nature of the rollout itself and how it was mandated that suppliers take responsibity for the devices, rather than the network operators. He says: "If you strip it away – why is it even necessary to rely on customer demand for these things? It's because it has been policy for this to be a supplier-led rollout. "I think that approach was a historic error and therefore it became something that was very fragmented and disjointed from a technological perspective, fragmented from a delivery and operational rollout perspective, and then it necessitated suppliers to actually ask customers permission to install rather than it being a mandated rollout." Furthermore, Jary argues, the most receptive customers already had meters installed, therefore the rollout will slow from here on in. He continues: "It's an entirely natural phenomenon which is experienced in all mass rollouts of anything in any major campaign, in that it's the most receptive customers that sign up first. "The second half is the final tranche of customers who are the most sceptical or who are the least available to have somebody come round and install the meter." The industry has seen the rate of installation fall on several occasions. The first quarter of 2018 saw a 6 per cent drop in domestic installations by larger suppliers, while Q2 saw a 1 per cent rise. The following four quarters saw decreases by as much as 10 per cent. From January to the end of March this year, just over one million meters were installed by large energy suppliers, split between 457,900 for gas and 573,700 for electricity. This represented a 6.7 per cent fall from Q4 2018 and a 17 per cent drop in the Q1 installation rate in 2018. Energy UK, the industry trade body, says in regards to the deadline it is important for suppliers to know what their obligations are post-2020. A spokesperson says: "Any target must be realistic, apply to all suppliers in the market and be supported by wider government policy – as well as being underpinned by an updated assessment on the costs and benefits of the rollout. "The energy industry will continue to work with the government and other partners to enable the programme to be delivered in full and cost-effectively." Perhaps one of the more disappointing figures published in the report is the fact that 2.7 million smart meters were "dumb" as of 30 June, with BEIS suggesting these are currently in "traditional mode". "Going dumb" is a phrase seen in many national news stories on the rollout and refers to first-generation (SMETS1) devices losing smart functionality, oen when a customer switches supplier. This is currently being rectified by the Data Communications Company (DCC), which is in the process of connecting SMETS1 devices to its central network. That said, the fact that one-fih of smart meters have no smart functionality makes for grim reading. Some experts are even claiming that 24,000 meters per day need to be installed in order to hit the "impossible" December 2020 deadline. Mission impossible Peter Earl, head of energy at Comparethemarket.com, says: "Hitting the December 2020 installation deadline for smart meters is mission impossible for energy providers. Suppliers would have to install over 24,000 smart meters a day for Smart meter rollout: now comes the hard part The latest smart meter installation figures reinforce the long-held view that the 2020 deadline is now impossible to meet – and the rollout is slowing down rather than speeding up. Adam John reports. Not so smart: many meters have 'gone dumb' when customers switched supplier

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