The industry regulator Ofgem has said that fitting more than 50 million new meters in houses and businesses across Britain “has the potential to transform how energy markets operate (and) how consumers engage with them”.
Smart meters: opportunities and challenges
Suppliers will have the opportunity to improve their operational performance, cut costs and offer new services that will increase customer satisfaction and loyalty, whilst also reducing energy consumption. The government has estimated that smart meters could provide about £7 billion of net benefits to consumers, energy suppliers and networks over the coming years.
However, a project on this scale will also be a serious test for even the biggest energy supply company.
Businesses will have to contend with new technology, data management issues, meter installations, additional regulation, new ways of working, increasing customer expectations, and increased competition and innovation. These challenges will cut across every area of a company’s business, from IT and technical support to customer services and sales.
Big data providing valuable insight
One of the biggest changes will be the huge amounts of data that smart meters will make available to suppliers and their customers. This data can provide valuable insight to help customers manage their energy consumption and also assist the energy industry to manage overall energy demand.
Billing and metering data must be accurate and up-to-date before old and new meters are exchanged. Failing to get this right could lead to a loss of revenue and difficulties with meter installations and hence meeting the smart meter rollout targets.
Companies must be prepared for more technical and advice based queries from their customers replacing the traditional billing based queries. There may also be a rise in the number of customer queries immediately following the smart meter installation as customers get used to the new technology and simply due to the meter exchange related bill.
Traditional and smart meters will have to be managed in parallel, often using the same systems despite following different business processes and controls. It will therefore be vital for companies to find ways to cope with more detailed portfolio management, as well as reconciliation processes and controls.
While the scope of this challenge may seem daunting, energy supply businesses must not lose sight of the opportunities that the age of smart metering will bring.
The clever use of data from smart meters will improve the way suppliers operate their businesses and give people a better understanding of their energy consumption. Tailored products, energy saving advice and accurate billing all have the potential to increase customer satisfaction, loyalty and retention.
Preparing for smart meters
To prepare for the launch of smart meters, suppliers will have to consider how to:
∙ Identify current data quality issues in billing and metering
∙ Meet regulatory obligations and adhere to the Smart Energy Code
∙ Train all their people so that they understand smart metering and its effect on their business and customers
∙ Define a robust operating model that exploits technology and data to help their business and customers
∙ Assess how smart meters will affect their business systems and processes
∙ Prepare for a successful meter procurement, logistics and installation programme
∙ Implement successful testing and technical assurance processes
∙ Comply with SMETS2 (Smart Metering Equipment Technical Specifications 2) and the GBCS (the Great Britain Companion Specification)
∙ Complete industry testing and go live readiness
The key to making smart metering a success for energy suppliers lies in thorough preparation, robust training and constant re-evaluation and challenge to ensure that long-term projects run smoothly.
Engage Consulting is working with suppliers to help them with their smart meter rollout preparation and planning. Our consultants have held senior roles in Suppliers’ Smart Metering Programmes, led Smart Metering Operational Teams and have also provided expertise into the development of the overall Smart Metering Implementation Programme.