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HomeD: Regulatory and Policy

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Introduction

The regulatory and policy framework is currently undergoing changes to get up to speed on smart meter roll-out. Changes include updating energy licences and codes, for example requiring energy companies to roll-out smart meters. Additional license-able activity has been introduced including the provision of communication between suppliers and other parties, and smart meters in consumer premises.

Key regulations and licencing

The key regulations governing the UK energy sector are the Electricity Act 1989 and Gas Act 1986, which have been amended many times[1]. The Energy Acts, 2008 and 2011 govern these changes in relation to smart metering[1][2]. The Acts prohibit activities such as supplying electricity without holding a licence to do so. Licence holders must comply with the Licence conditions and this is enforced by Ofgem, the Gas and Electricity Markets Authority[1]. Under the licence conditions sit the industry codes detailing the technical and commercial obligations[1].

Data and Communications Company (DCC)

The Data and Communications Company (DCC) was a new licensed entity to the energy supply system in September 2013. The DCC is currently setting up and is expected to be fully operational by April 2016 as the sole provider of remote communications services for smart meters[3]. For the first six months of operation it will be under a contingency period governed by DECC "to enable the DCC’s systems and services to come together with the energy companies’ systems and processes in a coordinated start to the main installation phase"[3]. Further detail on this under 'Licensing' below.

Smart Energy Code (SEC)

Under the DCC license, the Smart Energy Code (SEC); a new industry code, was established which sets outs the rules, rights and obligations of all parties for the new metering obligations. The SEC is a multiparty contract which sets out the terms for the provision of the DCC’s Smart Meter Communications service, self-governed by a panel of SEC party members and regulated by Ofgem[3]. A consultation of the SEC content and related supply licence amendments was launched in July 2015; responses are expected to be published late 2015. Further detail on this under 'Licensing' below.

Timeline of the background smart metering policy development

Below is a timeline of the background policy development, and the development stages (Tranches 1 to 6) relating to Smart Metering.

A timeline of the policy leading to smart meter rollout, governing regulation and licensing [2, 3, 4, 5, 6, 7, 8]
[4] [5] [6] [7] [8] [9] [10]

Smart meter roll-out plans and timetable (incl. opportunities for involvement, data issues, support for vulnerable etc)

Overall progress and plans

We are currently at the Foundation Stage (since December 2012[11]). We are expected to enter the 'mass-roll out' phase April 2016, which is later than the most recently revised date of December 2015. The delays are caused by difficulties in developing specifications and protocols and there is now further delay in notifying SMETS2 and GBCS which has a knock on effect to the DCC[12][13]. Whilst it is important to get the roll-out right, delays are resulting in increased cost, for example energy companies who have invested in training, such as British Gas are keen to keep the momentum going so they can continue to keep the trained installers in work[13].

DECC have named the current phase the 'Transition phase' of the Smart Metering Implementation Plan (SMIP)[12]. This is considered to be the stage where commercial, technical and regulatory plans will enable energy suppliers to roll-out the smart meters, in collaboration with the DCC. The Government are working with industry and consumer groups to develop the regulatory framework.

The role of energy supply companies

Energy companies are responsible for the roll-out of smart meters, DECC and Ofgem can impose financial penalties if they do not meet targets. The energy companies must sign and work to the Smart Metering Installation Code of Practice (SMICoP). Previously, there was discussion about the opportunity for District Network Operators (DNOs) to lead the roll-out as they could easily lead roll-out on a street by street basis, however this could have created issues clarifying ownership and leasing of meters[13]. Also, they do not have a regular customer relationship - except recently through the Priority Services Register customer care.

Previous research by Zoe and Simon, here at CSE identified the risks of energy suppliers delivering smart meters, since many people have a general mistrust of energy suppliers[14]. The key risk they identified was the fact that the programme cost control system relies on "competitive pressures in the energy supply market", which is also intended to ensure benefits will be passed to consumers - highlighted as naive. In addition, they identified potential conflicts with data use; the need for privacy may undermine the potential benefits of having smart meters in the UK[14].

Smart Metering Installation Code of Practice (SMICoP)

The SMICoP sets out the legislation in relation to consumer care. The document is set out in two sections: A: The Code of Practice and B: Code Governance. Section A outlines the legislation relevant during the pre, during and post Smart Meter installation stages (the parts underlined highlight areas relating to vulnerable customers):

Pre installation

  • Relevant legislation and regulation: Including preparing site access, marketing, advertising, Data Protection Act 1998.
  • Relevant accreditation: This is for the installers including National Skills Academy for Power and Gas Safe Registration.
  • Promoting the code: To build confidence with customers.
  • Engagement and Customer Awareness: Ensuring that information is clear and concise - also tailored for vulnerable groups with specific needs.
  • Scheduling visits: Installers must communicate visit plans effectively with customers.
  • Recruitment: Installers must be appropriately qualified, sasafe safe registered pass a DBS check.
  • Training and accreditation: Installers must be suitably trained and able to treat vulnerable customers in the correct manner. This includes taking "all reasonable endeavors" to identify vulnerable customers with specific needs "such as visually impaired, hearing impaired, and those with low levels of literacy". Where vulnerable people have not been previously recorded, this should be recorded appropriately; "where appropriate the appointment should be arranged with the carer or person with legal responsibility over the customer, and they should be present during the Installation Visit."[15]

During installation

  • Relevant legislation and regulation: Gas/electricity acts relevant for safe working practices and quality control, in addition to data protection and consumer protection.
  • Relevant codes of practice: Meter Operation Code of Practice (MOCOPA), Meter Asset Manager's Code of Practice (MAMCoP), Ofgem Approved Meter Installers (OAMI) and Safety Net for Vulnerable Customers (which installers become members to).
  • Testing the system: Installers must test the full system including WAN, HAN and IHD once installed.
  • In Home Display (IHD)/newly named: must be offered and located suitably for the occupant - especially if they have mobility problems.
  • Demonstrating the system to the customer: This section is fairly extensive and sets out clear guidance on ensuring customers understand how to use the system safely and are aware of all the relevant information. This includes demonstrations suitable for those with specific needs such as visual impairment, hearing impairments, low levels of literacy and any other known vulnerability.
  • Incomplete installations: Customers must be aware why the installation is incomplete and all equipment must be left safe with process in place for re-booking.
  • Provision of energy efficiency guidance: Energy efficiency advice must be offered to domestic customers during the installation visits and provided in a format that is suitable for the needs of the customer (incl. visually or hearing impaired, and those with a low level of literacy or otherwise known to be vulnerable.)
  • Marketing: Customers must consent prior to the installation visit for chargeable products and services. Marketing ends following customer request and is conducted in a fair, honest and transparent manner without pressuring customers or exploiting customer's inexperience, vulnerability or loyalties.
  • Sales: Transactions not to be conducted during domestic visits but okay for micro-business customers, if conducted in a fair and appropriate manner.
  • Incomplete installations: For an installation that cannot be completed in one visit the customer must be aware of the reasons why, the site is left safe and processes are in place to re-arrange the visit.

Post installation

  • Relevant regulation: Gas and Electricity (Consumer Complaints Handling Standards) Regulations 2008.
  • Relevant codes: Not applicable.
  • Customer feedback: Each member must ensure that the customer has available means for providing feedback and this information is taken into account for future visits.

In addition to the pre, during and post installation criteria, fault resolution and complaint resolution is included within the SMICoP document:

  • Fault resolution: Smart Meter faults must be identified and rectified as soon as possible following reporting, with the customer being informed of the fault details wherever possible. IHDs should be replaced or repaired if found to be faulty within 12 months of installation.
  • Complaint resolution: Relevant regulation - Gas and Electricity (Consumer Complaints Handling Standards) Regs' 2008 and Energy Ombudsman Scheme
  • Complaint procedures: The customer should have clarity as to whom to go to if they have queries or problems, reasonable endeavours should be made to investigate customer concerns and take appropriate steps to resolve the issue.

Vulnerable support

In 2013, work was carried out by the Smart Meter Central Delivery Body (SMDB), now Smart Energy GB, on finding effective ways to engage with all audiences[13], including vulnerable groups. The SMICoP outlines the minimum level of additional support smart meter installers must provide for vulnerable customers; including those with hearing and visual impairments, low levels of literacy or other known vulnerabilities. However, Jenny Saunders of NEA stated that she was unsure enough was been done and that the scope of 'vulnerable customers' should be extended to include those who have language barriers and caring responsibilities[12]. More on this is included within the Social/Cultural Wiki page.

Other vulnerable support resulting from smart meters could be through the increase in accurate data to energy suppliers leading to increased support to householders. Suppliers argued that having daily access to data will enable better assistance to those in debt and prevent it from building up, an opt-out scheme has been developed[15]. Ofgem stated in 2011 that it may be possible for suppliers to arrange with customers for more frequent access to data for this purpose, at the time they requested details of how that could be managed by energy suppliers[15]. The current rule is that customers will need to 'opt-out' of data been released daily to energy suppliers. If energy suppliers would like to request half-hourly data from customers this will require specific consent from customers[35]. More on this under 'Privacy'

Licensing of different roles in energy system (supply, distribution, meter operation, access to DCC etc)

Supply

Energy suppliers are companies licensed by Ofgem to supply energy and bill customers[15]. Energy supply companies are responsible for the roll-out of smart meters; DECC and Ofgem can impose financial penalties if they do not meet targets. The energy companies must sign and work to the Smart Metering Installation Code of Practice (SMICoP)[13]. Energy suppliers must sign the Smart Energy Code and become panel members (see below for more on this).

In relation to consumer data provision, a general requirement will be placed on suppliers in licence conditions to the meet the 'Directive provision' that consumers must be provided with consumption data over the meter interface or internet[16]. This was due to come into force on 5 June 2014. In 2013, DECC stated "A requirement will be placed on suppliers in licence conditions to inform consumers that this data is available to them on request, to provide it to consumers who request it, and to ensure that it is provided free of charge. We will consult on this in due course"[16].

Distribution

District Network Operators (DNOs) have a license obligation to "maintain an efficient and economic network". They also have standards to meet in relation to levels of supply interruptions and time taken to repair faults and restore supply[16]. The Meter Operation Code of Practice Agreement (MOCOCPA) is an agreement between Electricity Distribution Businesses and Electricity Meter Operations in GB, the agreement enables Meter Operators to install and connect meters to the Distribution Networks. The agreement covers safety, technical and interface issues[17]. DNOs must sign the Smart Energy Code and become panel members (see below for more on this).

Smart Metering Equipment Specifications (SMETS1 and SMETS2)

Meters which are due to be rolled out in 2016 must be designed to the Smart Metering Equipment Technical Specifications 2 (SMETS2). The current smart meters are designed to the Smart Metering Equipment Technical Specification 1 (SMETS1). SMETS2 compliant meters have been designed to work with the DCC infrastructure, which may lead to British Gas needing to replace 800,000 meters if the DCC is not set up to connect with SMETS1 meters. Organisations who have started rolling-out smart meters ahead of time are likely to push for SMETS1 meters to become operable with the DCC system.

The SMETS2 specification is not finalised yet which may lead to further delays, concerns were highlighted by the Energy and Climate Change Committee back in 2013 on the delays caused by the overdue SMETS2[18]:

"...the fact that the technical specifications that will ultimately need to be met by smart meters—SMETS 2—have not yet been finalised....the need for the Data Communications Company (DCC) and communications system to be up and running for SMETS 2 meters to be fully operational and the need for proper end-to-end system testing before mass roll-out[18].”

In addition, there are concerns from energy suppliers, relating to the standard of initial smart meters already installed, such as an example provided by Andrew Ward of Scottish Power:

"Of the initial 30,000 meters that we deployed in 2010, we have had to replace 5,000 of the SIM cards that are in those meters.The understanding we had when we installed the meters was that the SIM cards would be sufficient to last the life of the meter, so that has gone wrong. We have had to interrupt the lives of 5,000 customers and reinstall those meters[18].”

Other concerns relate to inter-operability between SMETS1 and SMETS2 meters. Skanska, a company which installs and maintains meters stated:

“The fact that there is no truly interoperable system or standard “churn” contracts make it very difficult to obtain long term finance. This could result in a newly installed SMETS 2 meter being removed and reinstalled when a customer chooses to move to a new supplier, because there is no mechanism for the rental agreement to be transferred between suppliers"[18]

Smart Metering Governance structure

The transition stage started in September 2013 with the DCC receiving a licence and the contracts awarded to the Data Service Provider (DSP) and the Communications Service Providers (CSP). This coincided with the start was also the launch of the Smart Energy Code (SEC)[12]. The Smart Metering Governance Structure is outlined in the diagram below.

Smart Metering Governance structure [12]
  • Smart Metering Steering Group (SMSG): Strategic level of progress. Members include: six main energy suppliers; two smaller energy suppliers; ENA; Energy UK; Consumer Futures; Ofgem; DCC Licensee; SEC Panel; CDB; Critical Friend; DECC SRO and DECC Minister.
  • Smart Metering Delivery Group (SMDG): Senior level forum DECC can work with to monitor and deliver the programme. Members: Six large energy suppliers; two smaller energy suppliers; Energy UK; CDB; ENA; DCC Licensee; Ofgem; SEC Panel; metering equipment manufacturers (trade association level). In addition Consumer Futures and the DECC SRO will have a standing invitation to attend.
  • Technical and Business Design Group (TBDG): A working forum for resolving technical issues, consisting of: Six large energy suppliers; two smaller energy suppliers; electricity and gas network operators; Energy UK; DCC Licensee; Ofgem; SECAS; energy services providers; metering equipment manufacturers; MAP’s and meter operators (trade association level).
  • Implementation Managers Forum (IMF): A working group DECC can work with to monitor and review individual contributor projects. Members: Six large energy suppliers; two smaller energy suppliers; Energy UK; CDB; electricity and gas network operators; DCC Licensee; Ofgem; SECAS; metering equipment manufacturers (trade association level).

DCC relationships

DECC granted the DCC license to Capita PLC; Smart DCC Ltd is a wholly owned subsidiary of Capita Plc[19]. The infrastructure is being delivered by service providers Arqiva (North) and Telefonica (South). The data services provider is CGI; BT provide the Smart Metering Key Infrastructure (SMKI); the Parse and Correlate Software is provided by Critical Technologies and Enterprise Systems by Capita. The diagram below shows the relationship between the DCC groups, energy consumers and DCC service users.
DCC relationships with consumers and DCC users [19]

Data access

To gain access to data, businesses can either become 'DCC users', or design Consumer Access Devices (CADs) (it seems). The thinking is that those designing Consumer Access Devices (CADs) will encourage Demand Side Response services[22] leading to energy demand reduction. Therefore, they may be able to access data without becoming a DCC user, if the consumer has granted permission and the request is received remotely via a licensed DCC user. The sections below aim to provide further insight into becoming DCC users, in addition to accessing data via CADs without becoming DCC users.

How businesses can become DCC users to access data

  • Sign up to the Smart Energy Code (SEC) - multiparty agreement defining the rights and obligations of energy suppliers, network operators and other relevant parties involved in the 'end-to end' management of smart metering in the UK[20].
  • To ensure data communications between DCC users and the DCC are secure, DCC users will pay the DCC a one-off charge to install a DCC Gateway Connection and an ongoing annual rental fee for a dedicated connection, so they are essentially leasing a line to DCC systems. The charges will depend on a few variables and can be gained through contacting the DCC[20].
  • DCC users will need to prepare, or buy, IT systems capable of communicating with DCC[20]
  • DCC users will need to go through the Smart Metering Key Infrastructure's (SMKI) Registration Authority Policy and Procedures (RAPP). This sets out the steps organisations need to go to gain access to SMKI services[21].
  • DCC users will also go through the DCC Key Infrastructure (DCCKI) RAPP to gain access to the DCC User Gateway and Registration Data Interface[21].
  • Perform SMKI and Repository Entry Process Tests[21].
  • Complete User Entry Process Testing (UEPT)[21].

Further details available here:http://www.smartdcc.co.uk/dcc-users/becoming-a-dcc-user/

How organisations/individuals to become a Smart Energy Code (SEC) panel member

The SEC is overseen by the SEC panel members and administered by the Smart Energy Code Administrator and Secretariat (SECAS)[19]. It is mandtory for energy suppliers and network operators to become a panel member. However, other bodies who are keen to use DCC services can become a SEC panel member by filling in a SEC Accession Form[22] and submitting a £540 (incl. VAT) application fee[23], then an optional minimum £1 share fee for SECCo if approved. Eligibility criteria states that:

"An Applicant may not be admitted as a Party if: (a) It is already a Party; or (b) It was expelled from the SEC in accordance with Section M8 within 12 months preceding the date of its application."[23]

Data access via Consumer Access Devices (CADs) (without becoming a DCC User)

CAD remote pairing [21]

In August 2012, the UK Government launched a consultation on the design of Smart Metering Equipment Specifications version 2 (SMETS2)[24], this included questions on the local and remote access to smart meter data from the Home Area Network (HAN) and Consumer Access Devices (CADs). As a result, it has been decided that remote pairing will be supported and consumers will be able to grant third parties, such as switching utility companies access to their Smart Meter data, where they have set up a Home Energy Network within their property:

"Where third parties access energy consumption data remotely via the Data and Communications Company (DCC), arrangements will be put in place through the Smart Energy Code to protect consumers. In particular, third parties will be required through the Code to: Take steps to verify that the request for third party services has come from the individual in question – although more work will be done to define the precise mechanism for verification; Obtain explicit (opt-in) consent from consumers before requesting data from the DCC; and Provide reminders to consumers about the data that is being collected. To ensure that these requirements are complied with, audit arrangements will be developed by the Smart Energy Code Panel"[25].

Requirements to support remote pairing will be included in the SMETS 2, the GBCS (Great Britain Companion Specification) and in the CHTS.(Commercial Hub Technical Specification) The SEC schedule of core communication services has also been updated to allow any DCC User to use a DCC service to initiate CAD pairing and de-pairing. To allow consumers to pair or de-pair remotely, additional services are required prior to the issue of a DCC pair (or de-pair) command. All of these additional services could be provided by the party offering the pairing service Government response to SMETS 2 (e.g. CAD provider, supplier or other party); alternatively some of these services could be added to the scope of the DCC’s services[24].

We do not yet know what obligations will be placed on energy suppliers to support the pairing process. The Government are undertaking further work to identify the required supporting business services, and determine how best these could be delivered, including any options for regulatory intervention. These additional services include:

  • verification of the identity of the consumer (see 'Privacy' section below for more on this)
  • a service allowing the consumer to provide information identifying themselves, their HAN and their CAD; and
  • consumer support.

What is a CAD?

A CAD is any device that can be connected to a consumers Smart Meter via the HAN, which has a ZigBee 1.2 Interface and ZigBee features defined in GBCS[26]. A CAD might:

  • display information directly to the consumer (e.g. an enhanced IHD);
  • act as a gateway (Zigbee/WiFi);
  • act as a conduit to send the data up to the cloud (e.g. laptop dongle/router);
  • it could use the information to affect its behaviour (e.g. smart appliances); or,
  • it could act as a home energy ‘hub’ which uses consumption and tariff data in combination with non-energy data (such as temperature or information from motion sensors) and consumer preferences (either configurable or ‘learnt’) to manage energy use throughout the home.
Overview of CAD/data communication pathways [22]

Remote pairing of CADS

CADs must be securely connected to the HAN on their first use through a process known as 'CAD pairing'. Consumers will be able to connect their CADs by asking a 'DCC User' to set-up CAD pairing via the DCC ( known as 'remote' CAD pairing). The SEC does not permit a DCC user to pair a CAD that returns consumption data to the DCC User unless:

  • it has a consumer's explicit consent; and
  • it has put in place and maintained arrangements designed in accordance with Good Industry Practice to ensure that the person from whom it has obtained consent is the Energy Consumer[27].

However, these SEC obligations do not apply where CADs either display information or provide consumption information directly to the consumer, such as over a laptop or local storage unit and DECC is keen to extend pairing options to cover this area also. There is currently a consultation running on IHD license conditions which is relevant to this[28].

Originally, two pairing options were provided within the consultation which were to design SMETS2 to accommodate 'local pairing' or 'remote pairing', and there was an open question for further pairing suggestions but no real alternatives were suggested.

Overall, remote pairing was favoured but most respondents only marginally chose this option and highlighted security and privacy caveats. "Remotely initiated pairing options all require the user of the service to verify that they are the Energy Consumer. Under locally initiated pairing options, where a meter is not in a shared space, in most cases access to the meter will be sufficient to verify that the person trying to pair is the relevant Energy Consumer. Where the meter is in a shared space the ‘pairing function’ on a meter will be protected by a Privacy PIN which will be set by the Energy Supplier and provided to the consumer".[24]

Respondents who supported remote pairing suggested that it would be the most secure option, and consistent with the process for pairing meters and the IHD on install. However, there were some concerns, particularly that remote pairing:

  • would introduce one or more third parties into the system, and place an obligation of ‘customer authentication’ upon them;
  • would take more time to establish than local pairing; and
  • would introduce a need for a new, high-priority, near-real-time messaging requirement on the DCC and its Service Providers.

Responses were received from 59 organisations including energy companies, Consumer Focus, Which? and Western Power. Here is a DECC summary of responses in relation to CAD pairing[24]:

"The great majority of respondents supported Option 2 for ‘remotely pairing’ a CAD to the HAN, although for many it was a marginal decision, and significant caveats were noted. Respondents noted that Option 2 is potentially more secure, and follows the procedure for installing meters and the IHD. They also noted that Option 2 was the ‘least worst’ option, given a number of potential problems with Option 1 (local pairing), which would require:

  • a change to the current ZigBee security requirements, as these currently state that an install code and MAC address must come from a trusted device. Therefore a CAD cannot send its own pairing information. This is likely to impact programme timescales;
  • that suppliers maintain a database of passkeys and perform address verification for consumers who move house and / or forget their passkeys. This is an unknown, and potentially increasing, workload;
  • that a DCC service will still be required to send messages to reset passkeys on communications hubs;
  • all CADs have keypads, or a connection to a device with a keypad. Minimum specification IHDs could therefore not be connected without a supplier visit, and the opportunity for innovation in the market for ‘simple’ CADs and IHDs, limited; and that
  • a button is added to all communications hubs.

A consumer group also noted that Option 1 would risk giving suppliers a competitive advantage in the market for energy servicers, as the consumer is likely only to request reissue of a passkey when they are interested in a new energy service from a third party. A small minority of respondents favoured Option 1. They noted that the requirement for CAD pairing is likely to increase through time (particularly with the advent of electric vehicles), and the process must therefore be quick and easy. Notwithstanding the need for security, Option 1 could offer a simple process to the consumer, by phone or internet, and that consumers are capable of handling their own keys with due diligence. By contrast, Option 2 would introduce one or more third parties into the loop, and place an obligation of ‘customer authentication’ upon them, would take more time, and would introduce a need for a new, high-priority near-real-time messaging requirement on the DCC and its Service Providers."[24]

"If Option 2 were adopted, do you agree that obligations should be placed on energy suppliers to support this process by submitting ‘pairing requests’ to the DCC on request from their consumers?

Respondents to this question who expressed any preference were equally split, with a significant third group commenting on the different options but not expressing a choice. All showed a mix of responses from different sectors, and no one group showed any bias towards a particular one. Those supporting the proposal that an obligation should be placed on energy Government response to SMETS 2 suppliers to support pairing noted:

  • that the consumer already has a relationship with their supplier – but not with any other potential party such as the DCC, DSP or CSP – and is therefore more likely to trust the process;
  • under their existing licence conditions, the supplier is responsible for managing all consumer data in a secure and private environment, an obligation which would apply to any data arising from pairing requests;
  • submission of a pairing request offers the supplier a further engagement opportunity to strengthen the consumer relationship; and
  • this model is already widely used in both Texas and Australia, which have a similarly deregulated utilities market.

Although supportive of a supplier-based approach, a number of respondents noted the need to place an obligation on suppliers to operate a consistent, efficient and consumer friendly process for pairing requests. Others were concerned about address verification (noting that this issue would be more significant should an independent third party offer a pairing service). An equal number of respondents disagreed with the proposed approach. Some had supported Option 1 (local pairing) in their response to Q24, and therefore saw no need for a pairing service. Others argued that it was inappropriate to place an obligation on a supplier to take unbounded responsibility for the workload and costs of supporting what should be a commercial service. Respondents argued that this should instead be placed on the CSP, DSP, or supplied as a commercial offering via a SEC party. The third group of respondents who did not express a preference focused instead on the importance of understanding the underlying technical options for pairing particularly the security issues), arguing that these needed to be agreed "before the need, and responsibility, for a pairing service could be decided."[24]

Example of a CAD - Telegesis using a Zigbee Gateway

Telegesis appear to be market leaders in CAD product design; one of their products was used as a demonstrator at a DECC's Smart Meters, Smart Growth event in March 2015[29]. Telegesis uses the Zigbee gateway[30] to connect their products to the wireless connection, this also appears to be a market leading brand which will allow interoperability between appliances[31]. Their products will include password protected web pages and their website currently states data will be stored on either the Cloud or Local (mobile/tablet) devices[32].

Telegesis CAD system using Zigbee wireless [26]
Licensing Demand management (reduction, shifting) Supply value management Scale: from building to city level
What do we know Smart meter data will enable better use of time-of-use tariffs. Organisations will be able to set up phone apps and websites to encourage demand side response management. Smart meter data will be available to DCC users (energy comapnies etc) via the DCC. Data will also be available to third parties (such as switching companies) who are registered with the Smart Energy Code Panel and have gained permission from households who have a Home Energy Network set up. The smart meter data can inform smart grids. Community engagemnt stratgies like Less is More could help in enabling this.
What do we need to know The licensing rules of third parties gaining data access. What the energy companies role will be in granting third parties access to the Home Area Network (HAN) data - concerns that it could lead to increased competition as a result of their knowledge - permission to be third parties may go through the DCC instead.
Where can we find it? Will be confirmed before the full roll-out begins - potentially earlier. Those wokring in the sector will know more. Further reading may also provide the information. Should be announced pre-rollout.

Opportunities to mandate ‘smartness’ in new developments and refurbishment

This could be challenging at present due to the uncertainty of whether customers with an early meter installed becoming tied to the supplier who installed the meter, or switching and having a new non-smart meter installed thus creating a 'dummy smart meter'.

‘Space to experiment’ opportunities to operate outside full regulatory regime (Ofgem, DECC etc) – and what could be done

Social organisation of rules

"The socially situated and negotiated character of rules means that rules are open to interpretation and also to renegotiation"[33]

Non-traditional business models

Ofgem recently launched a public consultation on 'non-traditional business models'[34] (NTBMs). They aim to start a public conversation on benefits and risks to consumers of non-traditional business models and how they interact with the regulatory system. Ofgem are keen to ensure regulation does not step in the way of delivering desirable customer outcomes, protects the interests of consumers and allow them to understand the benefits, costs and risks in changing regulation. NTBMs may face challenges at present due to their size or the structure of the energy market.[34]

Main aims of NTBMs:

  • Help enable the transition to a low carbon supply system
  • Allow rapid technological innovation
  • Some are disappointed with the consumer engagement and trust they hold in more traditional businesses within the energy sector
  • New organisations may have a greater focus on affordability and supporting vulnerable customers

Ovo published their Ofgem NTBM consultation responses on their website and stated the following changes could be made to better facilitate NTBMs[35]:

  • "Simplify RMR rules and end the restriction on four tariffs. In particular, Ofgem should end the need to link prepayment tariffs to credit tariffs. This fails to reflect the learning and innovation going on in that market.
  • A general culling of regulation, especially around smart meter and smart installations. 
  • A move to principle-based regulation rather than prescriptive. This would require Ofgem to move quickly and impose big fines if breaches were found. 
  • A fast-tracking of half-hourly settlement."[35]

Privacy (for both individuals and commercial interests) vs public good. Can data be anonymised while still retaining sufficient detail?

DCC data pathway [36]

Data provided by Smart Meters will be the property of the consumer who must provide the DCC permission to access their data[1]. Once the DCC have the data they are not permitted to maintain a centralised database of the data[1]. If a company becomes a DCC User, they are permitted to request permission from households to obtain their smart meter data[1].

Privacy PIN on the User Interface

The Gas Smart Meter Equipment (GSME) and Electricity Smart Metering Equipment (ESME) will be capable of preventing display of data on the user interface without the input of the correct four digit customer PIN.

Verification of the individual customer

It was proposed in the SMETS 2 consultation that third parties applying to the DCC to access data should be able to verify that they have permission from the customer, to avoid data theft[24]. One proposal was the integration of a Consumer Identification Number (CIN). Once the DCC had received the data request they would generate a four digit number (CIN) and send it directly to the customer's smart meter, or smart meter display unit. The customer could then forward this number to the third party who would send it on to the DCC to complete the verification circuit. The DCC would then grant access to the third party. An alternative option was to send a CIN to the consumer and third party and trust the third party to confirm the numbers matched[24]. One technical solutions company thought a third party verifying customer identification would add complexity and believed it should be down to the DCC to manage all data access[24]. The majority of respondents preferred the CIN option but some were concerned it would be time consuming for the consumers, particularly if they were away from home, or did not regularly use their in-home display or look at their smart meter. Alternate suggestions included using the current meter reading, a password or email verification[24]. The exact customer verification process will be confirmed in the SMETS 2 document.

Data available

Energy suppliers will have access to smart meter data on a monthly basis[37]. However since suppliers argued that having daily access to data will enable better assistance to those in debt and prevent it from building up, an opt-out scheme has been developed[15]. Ofgem stated in 2011 that it may be possible for suppliers to arrange with customers for more frequent access to data for this purpose, at the time they requested details of how that could be managed by energy suppliers[15]. The current rule is that customers will need to 'opt-out' of data been released daily to energy suppliers. If energy suppliers would like to request half-hourly data from customers this will require specific consent from customers[38].

Network operators will be able to gain half-hourly data without consent for regulated purposes, if they have had plans approved by Ofgem for anonymising data to address potential privacy concerns[38]. Consumers can access their own energy consumption data through their In-Home Display or by requesting information from their supplier. They will also be able to access data through the connection of additional devices to the Home Area Network. Consumers will be able to share their energy consumption data easily with third parties, such as switching sites and energy services companies, if they choose to do so. Before third parties access energy consumption data remotely via the DCC, they are required to obtain explicit (opt-in) consent from consumers[37].

The updated SMETS 2 is expected to specify that electricity data should be stored for 24 months, and the Communication Hub Technical Specification (CHTS) is planned to specify for gas meters to also store 24 months of data[17]. Previously, this was planned to be data for the previous thirteen months, to allow customers to view their historic energy use and was likely to be the following, which may be similar for the two year data storage plans.

  • Electricity consumption (kWh) and gas consumption(m3) at half-hourly intervals for the previous thirteen months.
  • Electricity at half-hourly or hourly intervals over three months (on reactive energy imported and exported: kvarh).
  • Daily electricity consumption, or gas for the previous two years.
  • Current tariff information (including price, time-of-use matrix and switching times, time-of-use blocks and block thresholds)
  • Conversion factors and calorific values of gas .

The DCC will also manage an inventory of meter identification numbers and meter point identifiers (MPxN) associated with premises name/number/postcode.

Data granularity/preprocessing

Data preprocessing diagram [32]

There is a trade-off between the ability for household data to be provided at regular intervals to maximise the benefit in terms of informing a 'smart grid' and providing too much data which could lead to an invasion of household privacy and subsequent security risks. Recent research by Reinhardt et al. (2015)[39] in Australia and Germany, stated that a combination of 'preprocessing steps' with power data could be used to both protect consumer privacy and also better inform the grid. This would allow potential compromising data to be removed before the data is released to third parties. In order to do this, the algorithms employed must be sufficiently lightweight "to be run on embedded systems, such as smart metering infrastructure; in addition, the output of data needs to retain the shape of the power consumption curve and avoid excessive time delays[39]. The research concluded that it would be possible to use this method to protect customer privacy, however this would be at the cost of providing accurate data to the grid[39]. It should be noted that smart meters used in research are likely to provide more frequent data readings (every 10 seconds) than those deployed Nationally (approx every 28 seconds) due to costs[40]. It seems a type of 'cryptographic processor' will be used within UK smart meters to protect householders - this appears to encrypt data before sending remotely and 'de-crypt' at the receiver end[41], the ability for smart meters to integrate this will be written into the SMETS2[42].

HAN to CAD pathway

The beginning of the Internet of Things??

Smart Meters will also have the ability to communicate with Home Area Network (HAN) over a wireless connection within the home in the form of a ZigBee wireless network. This will allow: live energy feedback for householders and the ability to connect with Consumer Access Devices (CADS). CADS are currently able to connect to WiFi and stream data, in future they may develop to communicate with appliances in the home, once they have been paired. Smart Meters must enable live energy feedback to householders and four CAD ports. The CAD can currently access electricity data at ten second intervals and gas meter data at thirty minute intervals.

The future home? BEAMA

BEAMA Home Area Network

BEAMA have been developing ideas which would enable the Home Energy Network to connect to the following, in addition to energy useCite error: Invalid <ref> tag; refs with no content must have a name:

  • Temperature sensors
  • Humidity sensors
  • Switching controls
  • Intelligent controls
  • Audible alarms
  • External communications
  • In-home communications
  • Occupancy sensors
  • Access control
  • Perimeter sensors
  • Vital signs monitoring

They are at the stage of informing policy makers for development of regulatory frameworks surrounding these areas.


References

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