Utility Week

28 | 12th - 18th MAY 2017 | UtILItY WEEK Customers bring innovative smart energy services and tariffs to market, they are also committed to making "a massive investment in an incred- ibly complex programme that no other coun- try has chosen to do in the way that we have – a way that is inherently expensive". This negative impact on innovation is important, because it is widely acknowl- edged that smart meters themselves will not initiate a transformation in the way energy is consumed. Rather, it is believed that new approaches to retail, which explore bundling and lifestyle-based contracts, and which are enabled by smart meters, will trigger a radi- cal change in the customer experience. Doepel says the squeeze on suppliers' costs, and the room for innovation, has wors- ened over the year. Following the Conserva- tive manifesto pledge to introduce a retail price cap, which "has hit everyone's P&L hard", Doepel believes firms with "dimin- ished scope for revenues and looking to shore up their balance sheets" are increas- ingly concerned about the cost of smart. But despite the cloud of worry, Doepel insists that the future need not be gloomy and fractious. It has already been argued here that smart meters themselves provide no competitive differentiation for suppli- ers – it is what they can offer on the back of them that will make the difference. If suppli- ers accept this, then Doepel argues there is scope for collaboration on the high cost, low value nitty gritty of installation. Such a suggestion has been "taboo" to date, but Doepel insists "the pure econom- ics are pushing people to start exploring different models". He reveals that EY is hav- ing conversations with senior stakeholders about how supplier collaboration – to opti- mise speed and efficiency and control rollout costs – might work. "They are not quite there yet, but there is interest," he says. Ideally, a collaborative approach would give "density" to rollout by pooling the cus- tomers of many suppliers with a mutual installation company – achieving a rollout approach similar to what might have been the case with a network-led programme. Doepel knows there are "some blockers" to achieving this; for instance, supplier con- tracts with installation providers will need revisiting, and commissioning will be tricky due to the many different kinds of meters provided by different suppliers. But he reit- erates: "If you accept that the opportunity to differentiate is post-install, then it frees up opportunity to talk about collaboration." Forming partnerships with rivals to deliver a programme involving direct contact with customers may go against the grain, but chal- lenging times make for strange bedfellows. Smart metering: consumer experience Utility Week research shows… of 1000 UK customers had been offered a smart meter by their supplier had this meter installed in the past six months 13% of customers with smart meters said installation required more than one visit – Government has projected rollout costs on a 95% first-time install scenario across the programme's lifetime 97% This research was conducted in partnership with Harris Interactive said installation was straightforward 60% of all consumers were not aware that the rollout is being funded via their bills 76% said they were happy with the technical and service skills of their installer

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