British Gas won the arms race to rollout SMETS2 last month when it announced it had installed a second-generation smart meter before any of the other suppliers. Now Npower and Eon have announced trials too – but what stage are they all at, how did they manage to get there first and how can others follow suit?
The first SMETS2 meter was installed by British Gas in August, in a semi-detached house in Surbiton, South London, as part of a consumer trial which the suppliers has since said will provide the foundations for the large-scale deployment of SMETS2 meters next year.
Following British Gas’s triumphant announcement of its SMETS2 milestone, fellow big six suppliers Npower and Eon were quick to confirm that they too will trial SMETS2 meters in customer homes this year, with wider rollouts going ahead in 2018.
Good news. But it has been a long time coming. It was in 2009 that then-energy secretary Ed Miliband announced that the UK would embrace smart meters. He said: “Smart meters will empower all consumers to monitor their energy use and make reductions in energy consumption and carbon emissions. They will also mean the end of inaccurate bills and estimated meter readings.”
Now, eight years down the line, the mass rollout of fully capable smart meters in homes and small businesses across the UK still has yet to build up a head of steam. And doubts about whether the structure and technology specifications behind the programme are fit for purpose, have refused to fall away.
What’s the big idea?
SMETS2 meters offer functionality that is critical to the success of the smart meter rollout and the delivery of its value case for both customers and the energy industry.
Core SMETS2 functionality includes providing “first gasp” and “last breath” notifications to network operators of outages and supply restoration. It also includes completely transparent billing for customers, and seamless switching between suppliers. However, this ideal is far from being a reality – despite the advanced stage of the rollout, with its looming 2020 deadline for completion.
Today, millions of early generation and SMETS1 meters are in the field and more are being deployed every day as suppliers work to keep up with the rollout targets and final testing of SMETS2 meters grinds on.
The high penetration of SMETS1 and SMETS1-capable meters in the field, coupled with persistent challenges in bringing SMETS2 meters to market, is problematic for a number of reasons.
For suppliers and customers it means a sub-optimal smart experience, with hampered switching (around 65 per cent of consumers who have tried to switch supplier post-smart meter installation have lost smart functionality, according to recent Utility Week research), and the lingering concern of DCC enrolment challenges down the line.
For energy companies, it also means a continued need to support the higher technology and installation costs of SMETS1 meters while SMETS2 niggles are worked out. And the need to keep meeting targets also poses a growing risk of stranded SMETS1 assets as the cut off date for their deployment – June 2018 – approaches.
In response to the latter issue, the Department for Business, Energy and Industrial Strategy recently launched a consultation to gain industry feedback on possible ways in which it could soften the SMETS2 transition deadline. It has suggested possible derogation arrangement for suppliers rolling out SMETS1 at scale, in order to avoid supply chain inefficiencies and, crucially, any stalling of deployment.
But this potential reprieve does little to ease the urgency with which suppliers are working to achieve the long-anticipated offer of truly smart meters. Here, Utility Week explores what three suppliers are doing to forge ahead with the transition
Catherine O’Kelly, industry development director at British Gas, says the company “made a strategic decision to invest in the programme early during its foundation stage to help our customers benefit as soon as possible”.
She says it was this but also the company’s rigorous training programme and attention to detail that meant it was able to be the first past the post: “We have worked closely with the DCC [Data and Communications Company] and our meter manufacturers through a flexible and agile testing programme to ensure our readiness to install SMETS2 meters.”
As to the timings for the SMETS2 mass rollout, the short answer is “as early as possible”, but she says the programme “is now fully geared up to cut across from SMETS1 to SMETS2 installations… and based on current time scales, we will commence a pilot this year followed by installs at scale in early 2018”.
Not willing to be too far led on how many are actually out there, she says simply: “We are currently in a test and trial phase and have successfully installed a small number as part of a very gradual and carefully controlled exercise.”
As part of this test and trial phase, British Gas will be reviewing the customer experience before it rolls out at scale, but at the time of going to press the company was unwilling to share any customer reactions to date.
Following “high customer satisfaction levels” with its existing one million SMETS1 installations, Gillian Baker, director of field operations and smart metering at Eon, says “the company is now focusing on installing SMETS2 meters and the remote upgrading of our existing one million smart meters as we get ready to move to the next phase of the rollout”.
Last month, a spokesperson told Utility Week that once it had “ironed out the final details and complexities” the company would start mass rollout. And Baker says they began installing SMETS2 meters this month, although she adds that, like the rest of the industry, it is currently at the testing phase.
As to how it has managed to be among the frontrunners in the race to install SMETS2 meters, she says having been ahead of the game with SMETS1 is making the process an easier one. “We began installing smart meters early because we wanted to learn more about how we could fit them in the best and most efficient way for our customers. As a result, we’re now better placed for the remaining smart meter rollout, providing the right technology to enable our customers to take more control of their energy use.”
She adds: “As one of the first suppliers to start installing smart meters, we remain committed to providing them for our customers’ homes and businesses, so they can see the benefits for themselves sooner rather than later.”
Looking to the future, she says the company’s key objective “is to engage customers in something they don’t have to have, but that will give them much more control of their energy use, accurate bills, and the freedom to move supplier whilst retaining their smart meter”.
She says next year will be an important time for smart metering, and adds that SMETS2 will make a big difference to both the company and its customers.
Npower is holding back on its install figures until it publishes its full year financial results for 2017 next year, but a spokesperson did tell Utility Week that it had “recently started a small scale pilot installs of SMETS2 meters”. It added that customers had responded positively to these installations, and that there are plans in place to start a wider rollout of SMETS2 meters next year.
are plans in place to start a wider rollout of SMETS2 meters next year.
Smart meter progress
The government and Ofgem have a target to roll out 53 million gas and electricity meters to all homes and small businesses in Great Britain by the end of 2020.
In its latest quarterly update, published in August, the government said there are now over 7.68 million smart and advanced meters in homes and businesses in Great Britain, installed by both large and small energy suppliers.
Scottish Power said it has installed approximately 635,000 first generation smart meters to date, and anticipates SMETS2 installation beginning in summer 2018.
SSE has installed more than 600,000 smart meters so far, and expects to begin installing SMETS2 meters “in the coming months”.
EDF Energy has installed more than 400,000 smart meters and is “well underway” with testing the new SMETS2 meters. It will conduct pilot installations by the end of the year, with mass rollout expected in 2018.
Independent suppliers are at varying stages in their smart meter rollouts.
Utilita head of marketing and communications Jem Maidment said: “Utilita has more than 900,000 SMETS1 meters in its portfolio, and more than 88 per cent of our 580,000 domestic customers have a smart meter – the highest percentage of any supplier in the country. We have no set date for rolling out SMETS2 meters.”
Ecotricity has installed more than 10,000 SMETS1 meters so far, and plans to start its roll out of SMETS2 meters in the second quarter of 2017. First Utility declined to reveal the number of smart meters it has so far installed, but said it aims to begin installing SMETS2 meters in 2018.
Meanwhile, Robin Hood Energy has installed approximately 11,000 smart meters to date and will start rolling out SMETS2 meters in May 2018. And Ovo Energy says it has installed 660,000 individual meters in customers’ homes since 2013. It will begin to trial SMETS2 meters in homes over the coming weeks.
A spokesperson for Bristol Energy said: “In Bristol Energy’s first year of business, we fitted a small number of SMETS1 smart meters to existing customers, as part of an initial trial. We are now focusing on rolling out SMETS2 meters to all customers from April 2018 onwards.
“This will be done in stages. We will start with the most vulnerable customers, those on prepayment meters, and people who would most benefit from a smart meter.”