Your independent energy adviser
0800 051 5770

Smart Meter Roll-Out – a Warning from History

electricity connectionIn April 2009, the Government introduced a new licence condition requiring business energy suppliers to roll out advanced gas and electricity meters to larger business consumers by 6 April 2014.

The energy suppliers provided final reports of their performance to Ofgem, the energy regulator, in May.

As a precursor to the mandated roll out of smart metering to all business and domestic consumers due to commence in 2015 and complete by 2020 the results did not make pleasant reading.

After 5 years and following the closure of the mandatory installation period:

  • Only 75% of eligible electricity customers had an advanced meter installed
  • Only 86% of eligible gas customers had an advanced meter installed

In February 2013 the performance has been:

  • 63% of eligible electricity customers
  • 46% of eligible gas customers

It can therefore be seen that the progress of electricity advanced meter installation has been significantly worse over the last 12 months than for gas customers.

Ofgem also highlighted the “significant difference between the percentages achieved by different suppliers”.

Whilst a 100% performance was not obligated, suppliers were required to use ‘all reasonable steps’ to fulfil the target set. Ofgem have questioned whether this was indeed the case and has announced that they are now looking into whether suppliers have taken such reasonable steps.

Ofgem’s concept of ‘reasonable steps’ include:

  • Did the supplier assign appropriate resources and oversight to address issues that might otherwise prevent meters from being installed?
  • Did the supplier continually review, update and improve procedures and thereby install more advanced meters as a result?
  • Did the supplier seek out and make use of advances in technology which would allow for more meters to be installed?
  • Did the supplier examine and implement more effective and less expensive ways of overcoming difficult installation issues?
  • Did the supplier monitor whether there had been changes to the circumstances of consumers, and take action to make more meter installations possible?

Ofgem have also reminded the suppliers that the obligation for installation is perpetual and although the April 2014 target date has now passed that this had no effect on their obligation to continue to install advanced meters using “all reasonable steps”

Regardless of the performance from hereon in the issues facing installation of advanced metering for larger business customers pales into insignificance compared to the 5 year, 20+ million meter roll out through to 2020.

From the performance to date the likelihood of a successful, timely and uniform installation appear extremely remote.

Rather than waiting for the inevitable failure, a new approach is needed even before the roll out has begun.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.