DCC delayed again

Until the data systems are in place, suppliers cannot start installing fully functioning smart meters, making an already difficult rollout even harder. Mathew Beech reports on the DCC’s tribulations.

Ten months have passed since the Data and Communications Company (DDC) was originally meant to have gone live.

The vital national data and communications infrastructure, which is central to the smart meter rollout, was first due to have been up and running by December 2015, but subsequent repeated delays have seen this pushed back to April 2016, then August, then September and now the latest deadline is the end of October.

Capita, the company to which the government awarded the £175 million 12-year contract back in 2013, has said this latest delay, which pushed the entire programme to the very end of its contingency timescale, came as the infrastructure was in the “final stages of testing”.

The implications for the entire smart meter programme could be significant, with timescales for its delivery becoming ever compressed and more demanding on the energy suppliers.

The scale of the challenge facing suppliers is huge.

There are currently around 4.2 million smart and advanced-style meters operating in UK homes and small business premises.
EU legislation requires that at least 80 per cent of the population have a smart meter installed by 2020, although the government insists its aim is to have offered every customer a smart meter by the end of the decade.

This equates to 53 million meters, all of which will be the newer SMETS2 specification once the DCC has gone live, providing customers with full functionality, including the ability to switch suppliers and retain the smart capability. To achieve this, a more than five-fold increase in installation rates is required once the DCC goes live.

KPMG power and utilities director Amy Marshall says: “Once the DCC, which will deliver the infrastructure to support the mass rollout, goes live we expect to see installation rates increase rapidly. Based on the smart meter figures released this week, almost one million meters will need to be installed every month between now and the end of 2020 to ensure all 53 million smart meters are ready by 2020.

“This is a huge challenge for the industry, with an average of less than 200,000 meters currently being installed per month by large suppliers in 2016.”

The result, if that figure of 53 million installations by 2020 is to be met, will be an increase in the cost of installations as suppliers throw money at the problem. This means the government’s estimated £214.50 per installation will rise, with those costs ultimately being fed back to the consumer.

Citizens Advice chief executive Gillian Guy warns: “It’s crucial that the government is clear on whether the compressed timetable for installation will result in additional costs to consumers.”

EY partner Rob Doepel adds: “The further DCC delay will inevitably add additional cost to the UK’s Smart Metering Implementation Programme. It’s time for all parties – government, regulators and suppliers – to work together to reconsider the current rollout plan and agree a realistic and, more importantly, efficient rollout timeframe.

The impact of the ever-diminishing timeframe for smart meter installations comes when you compare the last four annual smart meter projections from the government (see graphs).

The peak year in the first projection foresees just over ten million meters being installed in 2018 following a ramp-up over the preceding six years. By the latest (2015) projection, the peak is just short of 14 million meters in 2018, with a much steeper ramping up. WiFore chief technical officer Nick Hunn says this latest prediction “is pushing the bounds of credibility”.

One energy consultant tells Utility Week that the UK leaving the EU could impact on how the smart meter rollout is conducted by suppliers – and the end result.

He says that in order to get close to the 80 per cent target, the easiest installations will be targeted, leaving the difficult locations – often home to the more vulnerable customers who could stand to benefit most from smart meters – until a later date, possibly post-2020. Post-Brexit, the adopted EU law could be changed by the UK government to remove the need to hit the 80 per cent target, potentially seeing suppliers get close to that mark and declare it a “good enough job”.

However, the confidence from the government, Capita and, at least publicly, those involved in the smart meter rollout, is that the 2020 deadline, while tough, will be met.

The DCC now has a go-live date of 31 October, and it is aiming to be ready to function by 22 October. The programme is not in the red zone, and only has an amber warning.

Progress with the system is being made – despite the delays – and the phrase “forecast to be within release timescales” features heavily. A spokesperson for the DCC says: “The national data and communications infrastructure is in the final stages of testing and is making good progress. We are working hard to deliver the network at the earliest possible opportunity to the energy industry.”

If the various milestones and deadlines can be met, the smart meter rollout may prove to be a success and delivered on time. But this success is likely to come at an additional cost.