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HomeD: Regulatory and Policy

Revision as of 15:46, 20 July 2015 by Kate (Talk | contribs) (Smart meter roll-out plans and timetable (incl. opportunities for involvement, data issues, support for vulnerable etc))

It may be useful to start with a timeline of the background policy development, and the development stages (Tranches 1 to 6). 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]. 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].

The regulatory framework is 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 licenseable activity has been introduced including the provision of communication between suppliers and other parties and smart meters in consumer premises. In addition a Smart Energy Code sets outs the rules, rights and obligations of all parties for the new metering obligations.

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

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[9]). We are expected to enter the 'mass-roll out' phase April 2016, which is later than the previously expected date of December 2015. This delay appears to be due to technical and data issues yet to be resolved. However, 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.

DECC have named the current phase the 'Transition phase' of the Smart Metering Implementation Plan (SMIP)[10]. 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.

Energy companies are responsible fro 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). The current smart meters are designed to the Smart Metering Equipment Technical Specification 1 (SMETS1). This will be replaced by SMETS2, once finalised.

Technical challenges relating to the Smart Metering Equipment Technical Specifications (SMETS1 and SMETS2)

There are some 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[11]:

"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.”

Concerns were highlighted by the Energy and Climate Change Committee in 2013 on the technical specification development of SMETS2[11]:

"...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.”

Other concerns relate to interoperability between SMETS1 and SMETS2 meters. Skanska, a company which installs and maintains meters stated[11]:

“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." 

In addition, SMETS2 have been designed to work with the DCC infrastructure, which may lead to British Gas needing to replace 800,000 meters if they do not meet SMETS2 specifications, however, interoperbaility is a key concern of the Government[11].

Data issues

Vulnerable support

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

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)[10]. The Smart Metering Governance Structure is outlined in the diagram below.

Smart Metering Governance structure [10]
  • 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).

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

words here

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

words here
  1. 1.0 1.1 1.2 1.3 DECC, 2013. Smart meters: information for industry and other stakeholders. Available from: https://www.gov.uk/smart-meters-information-for-industry-and-other-stakeholders#regulatory-framework-for-smart-metering
  2. Energy Act 2008, section 88. Available from: http://www.legislation.gov.uk/ukpga/2008/32/part/5/crossheading/smart-meters
  3. HM Government, 2010. The Coalitation: our programme for government, 2010. Available from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/78977/coalition_programme_for_government.pdf.
  4. EU Parliament and Council, 2012. Directive 2012/33/EU, Official Journal of the European Journal, available from: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:327:0001:0013:EN:PDF
  5. EU Parliament and Council, 2012. Directive 2012/27/EU. Official Journal of the European Journal. Available from: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF. Accessed 15/07/15.
  6. EU Parliament and Council, 2009. Directive 2009/73/EC. Official Journal of the European Journal, available from: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:211:0094:0136:en:PDF
  7. EU Parliament and Council, 2009. Directive 2009/72/EC. Official Journal of the European Journal, available from: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:211:0055:0093:EN:PDF.
  8. EU Parliament and Council, 2012. Directive 2012/27/EU, Official Journal of the European Journal, available from: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:315:0001:0056:en:PDF.
  9. Smart Metering Working Group, 2014. Smart Metering: conditions for a successful roll-out. Available from: http://www.lowribeck.eu/media/3507/smart-meter-working-group-report_final_july-14.pdf
  10. 10.0 10.1 DECC, 2014. Transition Governance overview: Smart Metering Implementation Programme. Available from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/363674/transition_governance_overview.pdf
  11. 11.0 11.1 11.2 11.3 Energy and Climate Change Committee, 2013. Smart Meter Rollout: Fourth report of session 2013-14, para. 40, pp. 20. Available from: http://www.publications.parliament.uk/pa/cm201314/cmselect/cmenergy/161/161.pdf
 
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