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Great Britain Addresses Smart Meter Critics

Eric Woods — June 1, 2012

The U.K. Department of Environment, Climate and Conservation (DECC) made a series of announcements in early April regarding progress on the rollout of smart meters to 30 million households and small businesses across Great Britain.  The Government minister responsible, Charles Hendry, confirmed that suppliers are expected to deploy smart electricity and gas meters to all customers by the end of 2019.  The government also confirmed that it was on track to let the first licenses for the Data Communications Company (DCC) in the first quarter of 2013.  The central communications provision is expected to be in place to enable mass rollout to begin in 2014.

The government has not announced the bidders who have made it into the next stage of the tendering process.  However, media reports suggest that Accenture, Atos, HP, IBM, Logica, Siemens, and TCS have made the short list for providing the data management services for the DCC, a contract that the department indicates will be worth between £60  million and £240 million ($95-$240 million) over a period of 7 to 12 years.  The government will also award three communications contracts that will provide smart meter communications coverage across three geographical regions of Great Britain (Northern Ireland is outside the program).  Valued at between £330 million and £1.525  billion ($520 million to $2.4 billion), these contracts will run from 9 to 15 years, with a possible five-year extension.  Consortia led by Airwave, Arqiva, Balfour Beatty, Cable & Wireless, Ericsson, Everything Everywhere, O2, and Vodafone are understood to be the eight bidders to make it to the next phase.  A number of new consultation documents were also released by the government.  These include a new version of the smart meter technical specification, which give more details on meter functionality and communication requirements but does not address specific standards for home-area and wide-area network communications (other than to say they must be based on open standards).

Who Will Benefit?

More significantly, the government has clarified its policies on data privacy.  It is now consulting on proposals that will ensure consumer control over their consumption data.  Utilities will need to gain explicit approval from customers if they want to access data for other than billing and statutory requirements.  Consumers will be able to opt out of providing anything more granular than monthly data to their supplier, and they’ll have to provide explicit opt-in consent before suppliers can access half-hourly consumption data, as well as for any use of energy data for marketing purposes.  These proposals are particularly important given the growing concern amongst consumer groups and others that the suppliers are likely to reap most of the early benefits from the smart meter program.  Energy suppliers in the U.K. are already facing widespread criticism from consumer groups and the media over the perception that they have been profiteering from the volatility in global energy prices.

A House of Commons Public Accounts Committee report published in January, while broadly supportive of the program, also raised issues about how far smart meters would benefit consumers.  The U.K.’s approach to smart metering presents some unique challenges.  The decision to put the responsibility for meter rollouts on the energy retailers means that there is continued uncertainty as to whether network-level smart grid benefits will be given enough priority.  However, the United Kingdom’s approach does mean that consumer issues should be at the fore of the deployment – which is not necessarily the case when the distribution network operator is driving deployment.   Both the government and the energy suppliers are conscious of the need to show the consumer benefits of smart meters as well as their contribution to improving energy efficiency and reducing carbon emissions.  The latest announcements are positive sign that DECC is listening to critics but public engagement must remain a high priority for government and suppliers throughout this long-haul project.

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