Making smart use of smart meters

https://www.linkedin.com/pulse/making-smart-use-meters-maxine-frerk/

The long-awaited NAO report on smart metering is now out. For the most part it just tells the story that anyone with any involvement with the industry (and most readers of the Daily Mail) already know – that the rollout has been delayed, that costs are higher than expected and the number of SMETS1 meters installed – where customers cannot currently switch – is significantly higher than originally envisaged.

The NAO is measured in where it attributes blame for this (more complex than government expected plus DCC were slow in correcting certain defects). The BEIS team are commended for their achievement but warned not to allow a team culture to develop that is defensive and resistant to inconvenient truths. The problems to date are viewed as “not fatal to the viability and value for money of the programme” and rightly there is strong focus on what needs to be done from here in.

The headline grabbing recommendation is that BEIS should look at the case for changing the 2020 end-date for the rollout. Since no-one believes this is achievable – including NAO - it would seem to be a no-brainer to revisit it, to provide clarity around expectations, and to avoid the costs that NAO argue come with an unduly rushed rollout.

Other recommendations are around pressing harder on delivery of the benefits. The particular focus of the NAO report is on energy saving – the need for clearer advice to customers and closer monitoring of the savings.

On the issue of peak load shifting and time of use tariffs they note that the delays to half-hourly settlement mean that early savings will not materialise. However they also note BEIS’ expectation that the benefits in the 2020s will be higher than originally envisaged because of the faster than expected uptake of EVs. Which all makes sense.

However, what the NAO doesn’t pick up on (and was beyond its remit) is the importance of the actions required to deliver on these benefits. As Sustainability First and CSE have argued, Ofgem’s proposal to provide an opt-out (or even an opt-in in some cases) for customers providing half hourly usage data into settlement risks undermining those benefits. It opens the door for suppliers to cherry pick and game the system and for savvy high peak users to opt out, ultimately increasing the costs for everyone else. “Market wide” half hourly settlement should do what it says on the tin - but use data minimisation and other privacy enhancing techniques to help address privacy concerns.

And as the NAO note, the potential benefits from a more flexible energy system have not been fully reflected in the smart meters business case because they require other additional changes to deliver them. But they do still require smart meters and the data they provide.

So smart meters are critical to the future energy system and half hourly settlement is critical to delivering those benefits.

And in the spirit of the NAO recommendations – if not the letter – Ofgem and government should be looking hard at how the data that is collected through smart metering can be used to maximise the benefits from what the NAO confirm has been a somewhat more expensive programme than originally anticipated.