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UTILITY Week 18th December

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UTILITY WEEK | 18TH - 24TH DECEMBER 2015 | 15 Operations & Assets Analysis T he smart meter rollout due to start next year will bring accurate billing and increased energy efficiency, and it will open the door to the connected home. It also brings a ra of expected benefits to electric- ity distribution network operators (DNOs), but those benefits are far from guaranteed. DNOs are in an unenviable position. Hun- dreds of millions of pounds of revenue has been removed in the current price control because of the anticipated benefits of smart metering. But these benefits are by no means certain and are not under DNOs' control. Continuing problems with power alerts, differences in communication system opera- tors, the number of foundation meters likely to be installed and any further delay to the programme will hit DNOs in the pocket and undermine customer service. While gov- ernment and the Data and Communication Company (DCC) are showing willingness to improve the situation, there is no DCC con- tract obligation to do so. That said, DNOs are hopeful that the pro- gramme will still deliver. The Energy Networks Association (ENA) says: "Delivering smarter networks is the real, long-term prize from smart metering and the potential benefits can reduce costs, increase network efficiency and improve cus- tomer service." One of the main benefits expected of smart metering from DNOs is increased vis- ibility of the network through the "last gasp" notification. This is an alert sent by the meter to the DNO as the power is lost. Due to the way network systems currently operate, they cannot tell that there has been a power fail- ure for three minutes. One of the communications service pro- viders behind the DCC network, Telefonica, initially presented a notification delay of up to ten minutes several months ago, by which time many customers will already have taken it upon themselves to notify their DNO by phone. DNOs say that without this alert, the ben- efits of smart metering for networks evapo- rates, beyond the move to smart grids in the future. So it was a concern for DNOs to dis- cover that minimising this delay was not top of the agenda for the Department of Energy and Climate Change's smart metering team when faced with so many other challenges. While the alert was always part of the specification DNOs were working to, it now appears that there is no such requirement in the contracts with communications service providers to provide instant notification, and it is only through pressure from the DNOs themselves that the issue is being made a priority. Telefonica has said it will reduce the alert delay for two minutes above the initial three- minute period. But this will only be for the first two years aer the mass rollout because smart meter numbers will be limited. Beyond this, it plans to add another three minutes because of concerns around mass power cuts expected aer storms. If high numbers of customers lose power at once, the number of alerts could overload the communications systems. DNOs are pushing back on this extra three minutes. The way forward could be to look back at storms from the past ten years to quantify the actual numbers of customers who can be expected to lose power and be reconnected at any one time to give the com- munications service providers confidence that their systems will cope and the extra minutes will not be required. A second and potentially more detri- mental problem for five of the six DNOs is differences in the way the two communica- tions service providers have designed their systems. The alert times for Telefonica in the centre and south of the country, and Arqiva in the north, are unlikely to be the same, even if they are shortened, and could result in bespoke solutions being required in call centres that service both areas. DNOs are concerned that this will result in different service levels depending on loca- tion in the country. It will also complicate the comparison process by Ofgem for measuring performance. DNOs can be understandably disappointed that the expected seamless and identical service across the board will not be the case come what may. A Decc spokesperson said providing outage alerts was an "important benefit" to network operators. "Network operators are currently in discussion with the DCC to ensure the design meets the needs of both operators and bill payers," Decc said. Concerns with the smart meter rollout from a DNO point of view do not end there. The network companies share the concern expressed by SSE's director of metering and smart transformation Sara-Jane Asquith recently that foundation meters present a "massive risk" to the smart rollout. While the DCC is confident that these early meters will be incorporated into the DCC network at some stage and will not become stranded assets, they do not have the ability to provide the "last gasp" and "first breath" alerts at all. These alerts reduce operational costs and are integral to customer service, especially for vulnerable customers. Neither can the meters provide maximum demand require- ments necessary for future network planning or remote voltage alert changes which DNOs use for monitoring the health of the network. SSE expects a quarter of the total number of smart meters installed to be foundation meters. It is also not guaranteed that the smart meter rollout will start on time. Any further delay will interfere with contracts already set up by DNOs in order to become DCC users and push the benefits case further back in the price control. The ENA said: "Any further delay to the operational launch of the DCC systems is very likely to lead to an increased deploy- ment of foundation smart meters [reduced functionality] which, when coupled with the potential for differences between the sys- tems used to deliver information from smart meters, will risk erosion of the long-term benefits vital to delivering long-term cost savings and the enhanced end-to-end system performance that will make our energy con- sumption truly smart. "It is vital that the industry is joined-up to make customer service a top priority if this is to be a success." Will DNOs see smart benefits? The financial benefits that should accrue from smart meters have already been factored into DNOs' price controls, but will these savings actually materialise? It's doubtful, says Lucinda Dann.

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