PC Probe: Sparks fly as smart me­ter scheme fal­ters

The smart-me­ter roll­out that promised to save bil­lions is turn­ing into an­other govern­ment tech disas­ter, Ste­wart Mitchell dis­cov­ers

PC Pro - - November 2017 Issue 277 -

By 2020, we’re all meant to have smart me­ters – but the roll­out is plagued with prob­lems.

The govern­ment-led project to in­stall 53 mil­lion smart me­ters in the UK by 2020 was sup­posed to make switch­ing sup­plier sim­pler for con­sumers and re­duce en­ergy bills. In re­al­ity, com­pat­i­bil­ity prob­lems have made switch­ing more dif­fi­cult and could mean that mil­lions of in­stalled me­ters will soon have to be scrapped.

Spurred into ac­tion by a Euro­pean di­rec­tive, the pro­jected £11 bil­lion scheme started life un­der a Labour govern­ment, but has been pushed ahead – in spite of prob­lems that many be­lieve should have seen it post­poned – un­der the Con­ser­va­tives.

At the heart of the prob­lem is the ad hoc de­vel­op­ment of the sys­tem that has seen out­dated me­ters in­stalled in seven mil­lion homes to date.

The first batch of me­ters in­stalled un­der the scheme use a stan­dard known as Smart Me­ter­ing Equip­ment Tech­ni­cal Spec­i­fi­ca­tions (SMETS1), but it soon ran into prob­lems.

“Ini­tially there was only ever go­ing to be one ver­sion, SMETS1,” said Nick Hunn, CTO of con­sul­tancy firm WiFore and a smart-me­ter pi­o­neer. “That hit an is­sue be­cause, at the tail end of it be­ing writ­ten, GCHQ was asked to come in and give a se­cu­rity au­dit for the sys­tem and they had an ab­so­lute fit. They ba­si­cally said: ‘This can­not be the en­dur­ing roll­out... you need to come up with SMETS2’, which is much more se­cure. It’s still not the way you’d do it if start­ing from scratch.”

Th­ese se­cu­rity changes to SMETS1 me­ters meant fur­ther de­lay in get­ting them to talk to the na­tional data­base that was sup­posed to mesh the smart-me­ter­ing sys­tem to­gether. That Data Com­mu­ni­ca­tions Com­pany (DCC) net­work – run by Capita – fi­nally went live in Novem­ber 2016, but the ini­tial SMETS1 me­ters are still un­able to be “en­rolled” onto the sys­tem.

That means the me­ters can only talk to the en­ergy sup­plier that in­stalled them, rather than the na­tional net­work that could help bal­ance con­sump­tion across the na­tional grid. On top of that, they can turn into dumb me­ters if con­sumers switch providers be­cause dif­fer­ent me­ters from dif­fer­ent en­ergy sup­pli­ers are in­com­pat­i­ble. “When switch­ing, some con­sumers, not all, find that they tem­po­rar­ily lose some of their smart ser­vices,” ad­mit­ted a spokesper­son for Smart En­ergy UK, the cheer­lead­ing pub­lic face of the roll­out. “This is just a tem­po­rary sit­u­a­tion that only af­fects the first gen­er­a­tion of [seven mil­lion] smart me­ters. “The na­tional com­mu­ni­ca­tions net­work for smart me­ters be­came op­er­a­tional in late 2016 and once th­ese ex­ist­ing me­ters are bought into this net­work, they will be able to de­liver the full ben­e­fits. Govern­ment and in­dus­try are de­cid­ing on the pre­cise timetable for bring­ing ex­ist­ing me­ters into this net­work.”

Re­place­ments needed?

The me­ters can only talk to the en­ergy sup­plier that in­stalled them, rather than the na­tional net­work

How­ever, there’s spec­u­la­tion within the in­dus­try that the SMETS1 me­ters will never work with the DCC sys­tem, which could see all seven mil­lion me­ters – and any more in­stalled in the in­terim – re­placed. “There’s a grow­ing feel­ing that it looks too dif­fi­cult, that they’ll need to be re­placed, so you have a rump of stranded as­sets that’s go­ing to be a cost, and those me­ters do noth­ing other than send you back a fig­ure that’s used for a quar­terly bill,” said Hudd. The DCC and in­dus­try body En­ergy UK (not to be con­fused with Smart En­ergy UK) say they’ll make the sys­tem work – En­ergy UK told PC Pro it’s a ques­tion of “how and when, not if” SMETS1 me­ters are branched into the cen­tral sys­tem. Ac­cord­ing to Smart En­ergy UK, we’re only at the stage where “DCC and govern­ment are con­sult­ing with the in­dus­try on the ap­proach to take to en­sure that this is done”, while the DCC re­ports that “we cur­rently ex­pect that mi­gra­tion of SMETS1 me­ters to the new ser­vice will be un­der­way in 2018”. There’s cur­rently no pub­lic so­lu­tion on how to bring the me­ters into line with the DCC sys­tem, but en­ergy reg­u­la­tor Ofgem op­ti­misti­cally says: “It’s ex­pected that th­ese up­grades will be de­liv­ered re­motely (‘over the air’) and will not in­volve a site visit.” Even if the me­ters can be in­te­grated with the cen­tral sys­tem, they’ll still lack some of the func­tions – such as re­port­ing power cuts to the provider – avail­able in later mod­els.

Halt the roll­out

Given the raft of prob­lems, would it not make sense to de­lay the roll­out of smart me­ters un­til the SMETS2 de­vices are ready? Dur­ing con­ver­sa­tions with the in­dus­try, it’s clear some pri­vately be­lieve push­ing ahead with the roll­out in or­der to meet the ar­bi­trary 2020 dead­line could be a waste of money – there could be 20 mil­lion SMETS1 me­ters in­stalled be­fore SMETS2 is prop­erly up and run­ning.

“The view was that it would be sorted in a year or so, and there wouldn’t be many SMETS1 me­ters go­ing out and those that did would be re­placed,” said Hunn. “That’s not what’s hap­pened, and they’re still be­ing in­stalled.”

What’s more, some smart me­ters don’t fully meet the SMETS1 cri­te­ria. In a let­ter to sup­pli­ers in June, Ofgem threat­ened that “sup­pli­ers must en­sure that me­ters are made SMETS1-com­pli­ant prior to the SMETS1 end date”. How­ever, the govern­ment has yet to set an end date, leav­ing providers un­sure whether to wait for SMETS2, or to de­ploy first-gen­er­a­tion me­ters in the knowl­edge they’ll need ei­ther up­grad­ing or re­plac­ing.

“The re­duc­tion in de­ploy­ment costs that SMETS2 rep­re­sents might tempt some to go with a ‘Big Bang’ ap­proach to the switch, quickly cur­tail­ing their pro­cure­ment of SMETS1 and re­plac­ing them with SMETS2 as­sets, which are up to 50% cheaper, and re­duce the ex­po­sure of be­ing left hold­ing re­dun­dant as­sets,” said Tom Har­g­reaves, se­nior con­sul­tant for en­ergy and re­sources at an­a­lyst firm Baringa.

For com­pa­nies that wait, there could be a race against time to fit the newer de­vices be­fore the dead­line. This could lead to un­der-trained en­gi­neers fit­ting de­vices that have al­ready been blamed for house fires. There’s also a risk that SMETS2 will face fa­mil­iar teething trou­bles. “[With] SMETS2 be­ing launched near the peak of the roll­out... sup­pli­ers will have a much shorter time­frame to learn and im­prove,” said Har­g­reaves. “The largest sup­pli­ers will be de­ploy­ing thou­sands of th­ese me­ters per week while mak­ing the tran­si­tion.

“If sup­pli­ers are go­ing to be suc­cess­ful, they need to usethe time be­tween DCC go-live and the end of SMETS1 wisely, bal­anc­ing the re­quired learn­ing about SMETS2 and the DCC, while still in­stalling enough me­ters to mit­i­gate the huge in­stal­la­tion peaks most of them are fac­ing go­ing into 2018/2019.”

Heads in the sand

Amid the con­fu­sion and es­ca­lat­ing cost of this huge na­tional in­fra­struc­ture project, the De­part­ment for Busi­ness, En­ergy and In­dus­trial Strat­egy is keep­ing its cards close, de­clin­ing to com­ment in any mean­ing­ful way.

And there’s lit­tle ap­petite from any po­lit­i­cal party to chal­lenge the sta­tus quo, as all played a part in launch­ing the project and seem de­ter­mined to push it through de­spite its prob­lems. “It’s a clas­sic govern­ment project – it’s been de­signed from the wrong end by the wrong peo­ple. We’re putting crap into homes that will add hun­dreds of pounds onto peo­ple’s en­ergy bills,” said Hunn.

ABOVE Seven mil­lion first-gen smart me­ters may have to be up­graded or re­placed en­tirely

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