BEIS acts against SMETS2 transition risks

Government proposes flexibility options around smart meter milestone to avoid supplier and customer detriment

The Department for Business Energy and Industrial Strategy (BEIS) has opened a consultation on the actions it should take to avoid negative impacts arising from the transition to SMETS2 meter installation in the national smart meter rollout.

A statement on the BEIS website said that the consultation had been launched in recognition of a number of risks faced by suppliers if the current end date for the rollout of SMETS1 meters remains in place, without any flexibility.

The statement said that the existing cut-off date for the installation of SMETS1 meters – 13 July 2018 – had been put in place to “support and incentivise an efficient transition to SMETS2 meters”

But it admitted that “despite detailed planning” a smooth transition to installing exclusively SMETS2 meters at scale may take time”.

Without the introduction of flexibility around the SMETS1 end date, BEIS fears there could be “a temporary reduction in the rollout”. Other risks include suppliers being unduly burdened by stranded asset costs and unpredictable supply chain dynamics which could in turn lead to increased costs to consumers via rollout inefficiency.

To mitigate such risks, BEIS suggests three possible alterations to the current smart meter programme timeline which would introduce some flexibility for individual suppliers around the SMETS1 cut-off date, though the consultation document stresses that it does not propose altering the end date as such.

The options put forward by BEIS include:

• Creating a proportional post-end date SMETS1 installation allowance – all suppliers would be allowed to install a number of SMETS1 meters after the end date equal to or not greater than the number of SMETS2 meters they have installed before it.
• Introducing a time limited derogation – suppliers who meet set eligibility and evidence criteria would be allowed to install SMETS1 meters for up to a maximum of three additional months after the end date.
• Introducing a quantity and time limited derogation – suppliers who meet set eligibility and evidence criteria would be allowed to install a limited number of SMETS1 meters up to six months after the end date.

Interested parties have until 10 November to respond to BEIS’s consultation.

The transition to SMETS2 installation in the national smart meter rollout has become an increasing point of tension for industry players and consumer groups.

On both sides there is a worry that the continued rollout of SMETS1 meters – which have limited smart functionality, cannot reliably be switched between energy suppliers while retaining smart functionality and are unable to communicate with the central DCC communications system – could push up rollout costs and block some consumers from the biggest potential benefits of smart metering.

At the beginning of the rollout, it was originally only intended that around 500,000 SMETS1 meters would be installed in homes and businesses across GB. However, due to a variety of technical problems and delays for SMETS2 meters, SMETS1 installation has forged ahead to the point where over 6 million SMETS1 or “SMETS1 capable” meters are on walls.

This summer, EDF Energy’s managing director for its customers business, Beatrice Bigois, told Utility Week that continued delays to the final stages of testing for SMETS2 meters means the timescales for transition remain unclear.

She emphasized that all suppliers are working hard to iron out persistent security and operational issues, because the arrival of SMETS2 meters: “will make our lives much easier, and it is really much less expensive, because the asset life for SMETS2 is longer. And then some components in the meters are less expensive too.”