After a turbulent year for energy companies, what lessons can the sector learn from the smart meter rollout? Simon Egan, managing director UK, Ireland and Netherlands at Landis+Gyr believes the devices have a key role in helping millions of consumers who have shifted to home working take control of their energy use. Egan further describes how innovative new finance models are helping smaller suppliers increase their market share of meters.
It is fair to say that 2020 was not an easy year for energy – with supply chain disruption and evolving consumption habits just a couple of the challenges facing the industry over the last 12 months.
For the smart metering sector in particular, national lockdown measures had an almost overnight impact on deployment and manufacturing.
However, the sector has gradually rebounded and learned lessons from this “new normal”, and progress is being made despite the obstacles as we move one step closer to a more sustainable energy future
Rebound and reset
As the UK experiences its third national lockdown this January and February it is important to remember that the industry has learned how to operate in this new working environment.
Taking the autumn lockdown as an example, when November installation rates were down just 2.5 per cent compared to the same period in 2019, this was an exponential improvement since the first lockdown in Spring, which saw installation rates down by over 90 per cent.
This rebound in H2 of 2020 is encouraging and demonstrates how network operators and suppliers have pulled together to adapt and overcome hurdles to maintain momentum on the roll out as far as possible.
As utilities and suppliers have remobilized and introduced measures to ensure the safety of customers, the industry has also been developing its approach to meeting customers’ evolving needs.
We’ve seen innovative new finance models emerge to cater for the rise of independent providers, as demonstrated most recently by Calvin Capital. The meter asset provider inked a contract to deliver between 400,000 and 2 million SMETS2 meters exclusively to independent suppliers, highlighting the fundamental shift that has seen smaller providers steadily increase their market share in national smart meter installations.
A Green Recovery led by tech innovation
Smart meter suppliers are constantly adapting their technology to cater for an ever-changing market. In December, Landis+Gyr became the first meter manufacturer to install both gas and electricity meters that comply with the new UK SMETS2 v4.2 specification, enabling customers to achieve their regulatory obligations and delivering the very latest smart pre-payment functionality to the UK market.
The role that smart meters can play in a post Covid-19 environment is now more understood than ever by energy stakeholders and policy makers. With consumer bills set to increase and growing domestic consumption as a result of the new working from home dynamic, it’s important that consumers understand that a ready-made solution exists to enable them to take control of their energy use. Smart meters should be at the centre of our new normal energy world.
More widely, the need to create a smarter and more flexible grid ready for our future energy needs has been laid bare by this mass change in energy habits. Linked, the deployment of ancillary technologies such as battery storage and electric vehicles (EVs) will fundamentally change the UK energy network and industry is working to develop the infrastructure needed to support this transformation, particularly around demand side response.
As part of this process, it was great to see a consortium of energy industry leaders joining forces to help resolve challenges related to e-charging and facilitate wider adoption of EVs. The innovative SmartSTEP project, announced in November, will test and develop on-street smart-enabled EV chargepoints.
Crucially, the use of smart meters to underpin e-charging infrastructure will ensure load balance on the grid and result in the cheapest tariffs for consumers. Cross-sector partnerships like this that remind us of the importance of investing in critical infrastructure for the country’s energy future, ensuring that we keep to the promise of building back better.
Looking forward, I believe industry will continue to progress the SMETS2 rollout in 2021, with more integrated collaboration between manufacturers, suppliers, meter asset providers and installers. The sector must work with government to educate the public on the importance of energy efficiency.
We are already seeing increasing levels of public support, with Ofgem’s latest consumer survey finding that more than 70 per cent of customers are satisfied with their smart meters and a similarly high level happy with the installation process, a noticeable increase on past years.
The energy white paper, reiterated that energy efficiency, grid management and the wider smart electricity system is fundamental to the success of the UK’s net zero target. Smart meter installations alone will lead to a reduction of carbon emissions totalling 45 million tonnes, equivalent to taking 26 million cars off the road for a year with the domestic market for smart systems equipment due to support 10,000 jobs by 2050.
It is vital that such policies are fully implemented – it is only by government and industry working together that the UK’s ambitious energy policies can become a reality. It is in the spirit of this collaboration that I believe the UK is ideally placed to lead the green recovery and ensure we have the building blocks in place for a sustainable energy future.
This text was originally published by UtilityWeek on February 05, 2021. You can view the article here.