Sidelining smart meters in PR24 would be ‘missed opportunity’

Not including smart water meters in PR24 business plans would represent a “missed opportunity” to reduce consumption and leakage, according to Arqiva.

The smart infrastructure provider has published a new report commissioned from Artesia, which recommended that all water companies have a smart meter component in their upcoming business plans and urged Ofgem to challenge those that do not.

“PR24 covers the period up to 2030 and if smart metering for leakage reduction and consumption issues isn’t adopted in that period then you’re looking at 2030-35, which means the sector is running out of time. That’s the risk,” director of smart utilities networks at Arqiva, Peter Baker, told Utility Week.

He said the 2025-30 period will be critical for the sector and believes smart metering has to be a component of the settlement.

“If we’re really serious about tackling leakage, lowering consumption and addressing the water deficit we have, then you have to do it in PR24. If we wait seven or eight years for the next review, then those risks would become a lot more material,” Baker said.

The report published on Monday (23 May) addresses the benefits of advanced metering infrastructure (AMI), commonly known as smart meters, compared to automatic meter read (AMR) or “dumb” style meters. It builds upon a report published last year about the costs and benefits of smart metering.

One of the recommendations in the report is for all water companies to have a smart meter component in their plans and that Ofwat should challenge those that don’t. Baker said it would otherwise be “a missed opportunity”.

The report highlighted that performance commitments in PR24, the draft framework of which is due to be published in July, are expected to include certain targets relevant to smart metering. These include the customer satisfaction measure C-Mex, leakage reduction, per capita consumption (PCC) targets, asset health and supply interruption measures, and operational greenhouse gas emissions.

It suggested AMI would benefit companies’ asset health through heightened monitoring to identify supply interruptions. On operational emissions, which will be a new commitment in the upcoming price review, the reduction of consumption via metering would lower the amount of water and subsequently of wastewater that needs pumping and treating.

Thames and Anglian, which have both begun rolling out smart meters during the current asset management period, reported improved billpayer engagement that resulted in simple behaviour changes that reduced consumption, Baker said.

“Homes with a smart meter are typically seeing around a 15% reduction in consumption,” he explained. “This is achieved just by people becoming more aware of what they are using. It doesn’t all have to be policy and mandates – the cost and consumption benefits are clear to be seen.”

Anglian added meters in Newmarket, a town the company uses as a ‘shop window’ for innovation, with consumption falling 8% over a 12-month period – a saving of 12,500 litres per day, according to the report. Baker said that on average, leaks are found in one out of every four properties that have a smart meter installed.

On the current pace of rollout, which recently passed the millionth meter installed, Baker said: “Everyone would like to go faster because the benefits have surpassed all expectations. Some of the reports by Anglian and Thames about water efficiency, the leakage reduction across the two companies is in excess of 70 million litres of water daily saved through smart metering. That surpassed their expectations.”