If you can say one thing about the United Kingdom’s smart metering program, it’s this: There’s no shortage of commitment. In fact, that seems to be a key difference between regulators in the U.K. and many of their counterparts in the U.S.
Last November, Utility Dive reporter Rob Walton noted, “Two utility AMI proposals were rejected by state regulators in the U.S. this year, bolstering arguments that they are not cost effective.” Walton goes on to explain that while some states saw regulators approve advanced metering programs, regulators in Kentucky and Massachusetts rejected proposals that “did not sufficiently make the business case.” He adds that a FERC report states many regulators “are taking more targeted or cautious approaches to advanced meter deployment.”
Caution may be showing up from time to time in the U.S., but in the U.K., there is no stopping the grid modernization roll-out that is targeted to put some 53 million smart gas and electric meters into more than 30 million premises across England, Scotland and Wales. Here are a few ways smart meter deployment in the U.K. differs from smart metering in the States.
Mandates … or not
Whereas the U.K.’s smart metering program is propelled by the country’s government, which regularly reports on the progress of the initiative, smart metering initiatives in the U.S. are usually led by individual utilities, although there are notable exceptions. California, for instance, passed legislation in 2009 requiring the California Public Utilities Commission (PUC) to develop a comprehensive plan for smart grid deployment in the state, including smart meters.
State regulators, whose job it is to look out for the interests of consumers by evaluating utility requests for rate increases, sometimes question the efficacy of smart metering projects based on their costs. For example, this year regulators in Virginia nixed much of Dominion Energy’s $6 billion grid modernization proposal due to the associated costs.
“The stumbling block for the commissioners was the total $5.07 billion cost for installing smart meters, adding other ‘intelligent’ technology, and replacing and rebuilding parts of the grid to decrease outage duration and reduce restoration time,” noted an article in Energy News. That article also quoted the commission’s 16-page decision, which said, “Dominion’s proposed Plan is expensive, so it is important that Dominion’s customers receive adequate benefit for the costs they will bear in their monthly bills.”
Meanwhile, Great Britain’s smart metering program is led by the U.K. Department for Business, Energy and Industrial Strategy (BEIS), regulated by the Office of Gas and Electricity Markets (Ofgem), and delivered by energy suppliers. As of the end of 2018, there were about 12.8 million meters installed, and although most of them will need upgrades, BEIS and Ofgem are wholeheartedly supporting the smart metering initiative.
SMETS in a nutshell
Smart metering in the U.K. is driven by the Smart Metering Equipment Technical Specifications (SMETS) initiative. The first version of the specifications, SMETS1, was successfully implemented, and of the more than in 11 million meters that were initially deployed in the UK as part of the country’s smart meter program, only 450 did not comply with the standards.
However, the U.K. is a deregulated energy market, which means consumers can choose between several different energy retailers, and these retailers picked different smart metering vendors, many of which had proprietary communications methods in place for bringing back the meter data. Consequently, customers who switched power providers wound up with a smart meter that could no longer talk to the retail utility.
The second version of the specifications, SMETS2, specifically set about to resolve this issue. As part of the SMETS2 initiative, the UK government also granted a company called Smart DCC (Data Communications Company) a license to create and manage the communications network connected to smart meters and supply data to energy suppliers or other authorized organizations. The SMETS2 compliant meters communicate over this network, meaning they will be compatible with a wide range of energy suppliers.
Energy providers such as OVO Energy are moving quickly to offer both gas and electric meters that meet SMETS2 requirements. In addition, National Grid Smart, a leading supplier of turnkey smart-meter solutions to U.K. energy providers, recently contracted with Aclara to provide SMETS2-compliant electric and gas meters that communicate over the DCC network.
What’s in it for customers?
Here is a similarity between U.K. and U.S. smart metering deployments: customer requirements for information are increasingly a focus of smart metering projects.
Consumer interest in energy conservation, energy efficiency and demand-response is growing, and these concerns are becoming part of the justification calculus for smart-meter projects. A recent study by the Smart Energy Consumer Collaborative (SECC), the Consumer Platform of the Future, found that about half of U.S. energy consumers would probably use or definitely use an “online energy resource that would combine energy usage data, user preference settings, real-time energy data, energy programs and offers and use this information to help the user understand and manage home energy use.”
SECC president Patty Durand cites the Sacramento Municipal Utility District, Houston’s Direct Energy, and technology company Allconnect in a recent online post as companies providing unique energy conservation and energy efficiency programs to consumers. Specifically cited were SMUD’s energy products marketplace, Direct Energy’s online dashboard, and Allconnect’s programs for demand response.
Similar energy efficiency, demand response, and energy conservation benefits are also baked into the U.K. smart meter roll-out, and just about every everything posted online by energy companies or the government carries the message that smart meters empower consumers to consume more wisely. In part, this is because every consumer has the option of receiving an in-home display showing energy usages – gas and electric – in pounds and pence.
One report boasts that 83% of people with smart meters said they have a better idea of their energy costs, while 81% of people with smart meters say they have taken steps to reduce their energy use and bills.
Plus, more accurate meter reading itself is a benefit in the U.K., as many consumers are billed on educated guesses, not actual meter reads. A pro-meter site encourages people do get a smart meter “because you don’t need to let a stranger into your home, you don’t need to do any readings yourself and your supplier can bill you on how much gas and electric you’ve actually used rather than make estimates.”
Another similarity between U.S. and U.K. deployment is recognition that smart meters are crucial to the grid of the future. Both countries see the technology as an investment necessary to integrate electric vehicles and other distributed energy resources, as well as a tool to maintain reliability and support energy efficiency measures.
In the most recent government report on the roll-out, Claire Perry, U.K. minister of state for energy and clean growth, wrote, smart meters are the “foundation of a more flexible and resilient energy system forecast to save us billions of pounds over the lifetime of the roll-out and beyond.”
That’s why the U.K. government is hoping everyone will opt in and let the remaining installations begin.