Mr. Moffitt’s Profits Times – July 2018
Clued-up holidaymakers get their currency when the pound is strong. I do the same when negotiating energy rates. By looking around well in advance of the end date of energy contracts, I obtain the best deal for the client when the price is right.
Smart Meters – Smart Scheme?
SMART METERS ACCORDING TO OUR RESIDENT AUDITEL GURU, CHRIS BARRETT:
SMART Meters – smart scheme?
SMART metering is a technology which should allow meters to measure usage at a premise on a HH (half-hour) basis. A SMART meter collects and automatically transmits usage data from the meter to the supplier via a centralised system. The Government is keen to promote this technology citing a number of benefits to the customer notably
- Accurate meter readings and therefore bills
- Greater understanding of consumption activity which should lead to better energy management
Improved scope to introduce time of use tariffs rather than the simple single or day / night tariffs.
Sounds sensible? And the Government has set an ambitious target of getting all customers on some form of HH meter by 2020, which for the mass market generally means a SMART meter. Responsibility for delivery has been given to suppliers so those with the most customers have the most work and cost.
However , there are issues…
The Technology Challenge – the bulk of SMART meters that have been installed so far are knowns as SMETS 1 meters i.e. Smart Meter Equipment Technology 1. These meters are the first generation of meters. However, they are not compatible with the centralised computer system which has been built to manage all the data that the Smart meters are to provide. However, the more up to date SMETS 2 meters have been suffering for technological problems making them impossible to roll out in bulk.
This has left a farcical situation where suppliers are under pressure to deliver the programme but are being told they shouldn’t use SMETS 1 despite SMETS 2 not working properly. One of the problems with SMETS 2 meters has been that they are not inter-operable between suppliers. Therefore if the customer changes supplier the meters no longer work as a SMART meter. A SMART meter energy supply can be disconnected remotely, something that is not possible with the old fashioned set up.
The Cultural Challenge – the business case for this programme is based on the savings benefits they are supposed to deliver. However, does anyone with a Smart meter look at it after the initial novelty has worn off? Most will not, and will simply put their display unit in a cupboard. Also, will people be bothered about more complex tariffs?
In the commercial world, when HH (half-hour) meters were introduced we saw a simplification in the tariffs customers wanted. Once common seasonal time of day structures (STOD) were quickly simplified to single or 2 rate prices to make price comparisons easy. Why would a simpler less savvy mass market behave any differently? In Holland the business case for the same programme assumed a saving of 10% when customer got SMART meters. In reality the savings appear to be closer to 2 percent.