Utility Week

UTILITY WEEK | 29TH JUNE - 5TH JULY 2018 | 29 Customers Market view T en years ago in his speech on climate change, former prime minister Gordon Brown said: "For every household over the next decade, there will be the offer of a smart meter that will allow two-way commu- nication between the supplier and customer, giving more accurate bills and making it eas- ier for people to generate their own energy through microgeneration and sell it on to the grid." This speech was the prompt for a report from Generis Technology, Smart Metering in the UK: Policy, Technology and Market Driv- ers, also in 2008, which we prepared jointly with the Manchester Business School. In it, we made predictions about the move to smart meters, looking at the different options and routes, challenges and potential unin- tended risks. So where are we ten years on? The idea was fundamentally about transforming the way households buy and use gas and elec- tricity, to both save money and cut emissions, by having smart meters provide accurate information about energy usage and ensure customers pay only for the energy they use, rather than an estimated amount. Critically, the priority was addressing the issue of fuel poverty, for example by explor- ing new types of prepayment schemes. How- ever, the programme failed to gain pace and has subsequently fallen behind schedule. The government might estimate that the roll out of domestic and non-domestic smart meters will generate benefits of £16.7 bil- lion, with domestic devices saving £47 on the average bill per year by 2030, but to date, the £11 billion project has been beset with problems. A complex market One reason for this is that the UK market is fragmented, because of the impact of dereg- ulation, and this has resulted in significant complexity. It's also fair to say that ten years ago we did not foresee the massive explo- sion in issues around cyber-security, or the detailed legislation such as the General Data Protection Regulation (GDPR) and the effect this would have on the industry. However, these forced changes around data management are resulting in better business practice with regards to the use and storage of personal data, and smart meters are an additional way of ensuring this is achieved within the energy sector. In addition, with initial safety concerns and the perception that smart meters turn off "switch savvy" consumers, the introduc- tion of smart meters has been met with some considerable scepticism. But in most cases, such concerns have proved to be unfounded: the rollout is providing the first opportunity for a national safety check, because part of the engineer's meter installation process is to check installations for soundness, thus identifying any potential dangers to health and safety. The reality is that smart meters are part of a secure ecosystem and use an encrypted wireless network and there is no personal information stored in them beyond how much energy is being used. The current aim is that by 2020, all smart meters should be connected to the same communication net- works, giving customers the flexibility to switch between suppliers more easily than ever before. The smart energy transformation Ten years on, we're moving ahead with pace. Only with a transformation to smart energy and smart meters will the UK be able to have a reliable and sustainable energy system. The Netherlands' smart meter rollout con- tinues to draw interest as a good test case for how to digitalise electricity and gas measure- ment at scale. The European Union member state mandated a smart electricity and gas meter deployment aer a cost-benefit analy- sis of €770 million of positive benefits. In addition, there was a recognition that smart meters present an exciting new opportunity for innovation. Now, with the right data that can be analysed and processed properly, energy suppliers can improve retail processes with accurate billing, and allow distribution sys- tem operators to manage power quality and outages, with the smart meter acting as a connected platform to enable third parties to create new products and services. We would argue it is critical to keep sight of the priorities and the associated opportu- nities switching to smart meters offers the UK. While these immediately fall into the areas of data access, billing transparency, energy efficiency, performance, and compli- ance, smart meters could eventually rede- fine the energy supplier's role to that of an energy adviser. In-home displays will provide real-time feedback and empower customers to analyse their consumption patterns and maximise savings with flexible pricing schemes – all according to individual energy requirements. And from an industry viewpoint, these will integrate new technologies and innovations across the power grid. Analytics and technology offer even more exciting possibilities for the future. Imagine a smart meter dashboard that predicts usage, provides money back on innovative pre- payment schemes and eradicates issues such as fuel poverty and debt. Smart meters also provide the chance to improve energy con- servation, usage at off-peak times, as well as integrating the supply of renewable energy options back to the grid to improve reliability at peak times. Advances in the Internet of Things and big data analytics also pave the way for mul- tiple devices to be connected, supporting companies in offering variable pricing plans based on consumption patterns. For energy and utilities companies, this could improve grid intelligence and provide predictive mod- els that combine historical data and weather forecasts to integrate the supply of renew- able resources. Smart meters are undeniably a force for disruptive good in the dynamic energy mar- ket. We're excited to support the next wave of adoption by businesses and consumers to ensure they can fully embrace the advan- tages of the emerging smart energy market. Phil Mansbridge, head of sales and product Development, Generis Technology Smart meter progress report The smart meter rollout has proved more complicated than originally envisaged, but the benefits it promised are no less real and progress is being made, says Phil Mansbridge.

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