MOSL calls for incentives to roll out advanced metering

Non-household market operator MOSL has called for water companies to include metering for business customers in their water resource management plans and PR24 business plans. A report into improving metering in the sector suggested targets and incentives should be set out in the regulatory framework to ensure business customers are not overlooked in companies’ rollout plans.

Commissioned by MOSL on behalf of the Strategic Panel’s Metering Committee, the report sets out a benefit case for rolling out enhanced metering capability to non-household customers and recommends a “technology-agnostic” approach focused on standardising the captured data rather than hardware to avoid stifling metering innovation.

Since the retail market opened in 2017 it has been dogged by “persistent frictions” which MOSL believes can be resolved with the help of better data.

MOSL identified a need for more accurate, timely and granular data to understand consumption, identify leaks and manage demand.

One-third of the country’s water is consumed by non-household users and within that market a very small number of consumers are taking the lion’s share – 1% of customers using 50% of the water. Better data can show when, where, how and when that is consumed.

MOSL identified two main pain points to this end goal – the metering technology in the ground and the responsibilities around who owns versus who reads and benefits from the assets. With Artesia Consulting, MOSL launched a research project into enhancing metering technology via a data driven approach. A follow-up report will address ownership roles and responsibilities.

Martin Hall, market improvement lead at MOSL, explained the vision for the report: “We wanted to avoid just saying ‘we need smart metering’ without any evidence about the technology or what it would deliver because it just sounds a bit hollow.”

Artesia assessed average costs across the industry of adding technology to existing meters, what it costs to capture data and to invest in back-office systems to actually use that data. These costs were crossed with benefits of accurate and timely meter readings, reduction in costs to manually read meters, the savings in managing leakage and cost-saving in water efficiency.

MOSL and Artesia calculated the payback on the technology will be around six years.

There are currently around 1.2 million non-household meters, of which 1% have smart technology, also known as advanced metering infrastructure (AMI) devices or smart metering. These use a network of masts and radio antennae to continually capture data from meters. A further 24% are automatic meter read (AMR) -type meters, which are read via a device that captures information either by walking or driving past the meter. The remaining three-quarters are ‘dumb’ manual read meters – some of which are up to 40 years old.

Hall pointed out there are enormous variabilities in the not only the size and type of consumer in the commercial market and the way those customers use water, but also in wholesalers’ metering programmes.

“Trying to come up with a consistent strategy through that lot is challenging to say the least,” Hall said. “The report shows a strong case for making more of the meters in the non-household market smarter with either the AMR or AMI-type technology.”

‘Technology agnostic’

AMR meters have the potential to be converted to smart meters, Hall explained. The work being done by some companies is effectively installing AMR with the technology to upgrade to smart.

Before mass metering began in the energy sector, standards were written for the type of meters to be installed and the data to gather. For water, Hall said there is simply not the time to lose to do this.

“That costs more money than is available in the water industry so we are taking a standardised approach to data rather than the device technology. Any data sharing will be made easy because all users will have the same data specifications, which will be a more cost effective way of seeing interoperability in the water industry instead of rolling out a single standard of meters.”

This will give flexibility for investment to be retailer or customer-led, not just by wholesalers. Although large-scale rollouts are likely to be wholesaler-led MOSL anticipates add-on technologies could be introduced by retailers that meet the minimum data standard.

“Where it’s appropriate we want to encourage retailers to upgrade rather than wait for wholesalers,” Hall said.

More work will follow to select a “sensible” standard that is fit for purpose for all market players while still leaving room for innovation.

“This technology is still evolving with cellular technologies used to capture data becoming more available, narrowband internet of things is looking really positive,” Hall said. “If we standardise technology we would inhibit its evolution, but a data standard approach will encourage an ongoing technology evolution.”

Alignment with household metering

MOSL “absolutely believes” wholesalers’ rollout programmes should be concurrent with plans for household customers. However, Hall said discussions with water companies suggest not all wholesalers are planning this at PR24, some are proposing household metering programmes only. “That was a disappointing result and we hope this report will change their minds for PR24,” he added.

Historically there has been greater focus on household metering, particularly for advanced metering. “It’s just inertia,” Hall explained. “There has not been attention on non-household metering in the past five years and that is something we would like to see change. There’s justifiable reason to do that.”

This inertia is partly due to an imbalance between the two markets when it comes to incentives and penalty targets around leakage or per capita consumption (PCC), which focus on domestic use.

“Unless the regulatory structure changes to add a performance commitment around either non-household consumption or distribution input there is no incentive for water companies to invest in non-household meters,” John Davies, chief information officer at MOSL, said.

The team explained this report has kickstarted conversations about the state of meters in the market. Many require maintenance that was not included in PR19 investment plans.

Rollout plans also vary depending on whether a wholesaler is in an area of serious water stress, Hall described the “wildly different levels of metering” across England and Wales and attitudes among water companies, but said this is starting to change.

MOSL’s work is facilitating conversations about the benefits of data and in terms of leakage and efficiency that feed into investment thinking.

“Last year when wholesalers were in the early stages of putting together their water resource management plans and PR24 business plans they had said non-household metering would be saved for future AMP periods. Now they’re reviewing that with some evidence and perhaps a broader appreciation of how investment in the two markets can work. We are seeing a move in the conversations with wholesalers,” Hall said.

Part of the solution

MOSL believes enhancing the technology would be a key component for improving how the market operates. “At the moment we are not seeing much switching taking place or retailers offering value-added services, which were key reasons for setting the market up in the first place,” Hall said.

“This is one of three or four elements that need to come together, it’s not the whole answer but an essential part,” he continued. “Get the data right and you’ve got the foundation in place to build a really great market.”