With the smart metering roll-out due to start in December 2015, the countdown is underway for energy suppliers large and small to ensure their businesses are ready for the opportunities and challenges ahead.
Wide-ranging business changes
Suppliers are installing 53 million smart electricity and gas meters in all homes and small businesses in Great Britain by 2020. This will involve visits to 30 million homes and small businesses. For many, it will mean wide-ranging business changes and the need for new systems and processes that will affect many parts of their business.
The changes required will range from updating billing systems to allow for more frequent meter readings; to training a field force to install the new equipment; as well as new processes to deal with inheriting other suppliers’ smart meters should consumers wish to change their energy company. Additionally, there is the challenge of selecting and procuring their own compliant smart metering equipment.
3 Key demands
The rollout will make many demands on suppliers’ businesses and particularly in three key areas:
There are the regulatory aspects such as complying with smart meter rollout targets and reporting obligations, as well as having a SMETS II compliant smart meter portfolio. Suppliers also need to adhere to the testing and interoperability requirements defined by the SMIP and managed by the Data Communications Company (DCC) and fulfil new supply licence conditions relating to smart meters, including data privacy requirements and the Smart Energy Code (SEC).
There will be an impact on systems, processes, and equipment. Suppliers will need to assess how the smart metering rollout will affect many of their existing business systems and processes. This will include checking that their internal systems – such as Billing and Customer Relationship Management systems - are able to manage smart meters in addition to legacy meters. This could include the parallel management of legacy and new “smart” systems. Suppliers must make sure that their selected smart metering system and HAN equipment are fit for purpose and comply with the appropriate specifications. Suppliers must also implement new interfaces to the DCC systems to send/receive messages to/from smart metering devices and the parallel management of existing interfaces to settlement systems, whereby smart metering consumption data will need to enter the settlement process – thus adding complexity to existing processes and introducing potential settlement risks that must be managed carefully. Suppliers need to know that their business is ready to pass DCC testing so they become a DCC user.
There are the commercial considerations, including the delivery of competitive and sustainable commercial offerings (such as customer products and tariffs) that align to the new smart environment; managing the existing meter estate, including mitigation of the risk of potential stranded assets; and defining a robust procurement strategy for the smart metering system.
Manage the challenges
With these key areas in mind, energy companies have many challenges ahead. At Engage Consulting, we understand these challenges and have a deep knowledge and experience of the national smart metering programme.
We have played a key role within Great Britain’s smart metering initiatives since 2005 through our work for many industry participants including suppliers, government and trade associations. Engage Consulting can provide businesses with the support, knowledge, and insight required to ensure business readiness for the smart meter rollout.