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The Department for Business, Energy and Industrial Strategy is to proceed with plans to drop the Early Rollout Obligation for SMETS2 smart meters.
Removing the obligation will “not change the onus on industry to test SMETS2 meters in a timely way” or lead to a risk of delays, the Department (BEIS) said in an open letter.
The proposals were supported by a majority of stakeholders who responded to a consultation, with most agreeing the Early Rollout Obligation (ERO) has met it objectives and now risks “forcing energy suppliers into investment and deployment decisions which could cause negative customer outcomes”.
BEIS does not expect to a see a “material increase” in the installation of SMETS1 meters above current projections due to the scrapping of the ERO, as large suppliers will retain commercial and financial incentives to install the meters as soon as possible. This is partly on the basis the meters will support services which are in line with their likely business strategies.
Large suppliers are also obliged to become users of the Data Communications Company (DCC) within six months of its go-live date and will be “reliant on driving an early ramp-up in SMETS2 operations in order to meet 2020 targets”.
One alternative raised during the consultation was to set a later compliance date but BEIS said this is “not a suitable option” as it would leave “superfluous” regulation in place. The Department also noted calls for a new programme milestone to give the market confidence in the “stability and scale” of the DCC. It said it will be monitoring the rollout as part of routine information gathering and does not believe a new milestone is necessary at the moment.
“We have not though ruled out additional milestones or obligations should it become necessary for ensuring energy suppliers take all reasonable steps to rollout smart meters by the end of 2020”, it added.
The ERO requires suppliers which are large enough to qualify to install a minimum number of SMETS2 and enrol them with the DCC by 17 February 2017. BEIS floated proposals to remove the ERO after being advised that the obligation had met its objectives and could lead to “poor operational decisions whereby meters would be installed without having undergone full testing of the associated processes”.
The majority of the smart meter network went live on 10 November following a series of delays by the DCC. The full network has now gone live.
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