Industry News

• Smart metering to become mandatory by 2014

  13 Apr 2009

  New licence conditions affecting the supply of electricity and gas have been put forward by the Department of Energy and Climate Change (DECC). Under the modifications, which will be introduced on 6th April this year, all profile class 5-8 electricity meters or gas meters which consume in excess of 732,000 kWh each year will need to be replaced by smart meters by April 2014, in order to ensure that a customer can continue to be supplied with electricity and gas. The aim of the new licence conditions is to promote energy saving across the commercial sector, by ‘ensuring the provision of wholly accurate and detailed information about energy use’.
  
  

  Some 170,000 electricity meters and 40,000 gas meters in the UK are likely to be included in the legislation. Affected organisations are advised to adopt smart metering at the earliest opportunity, not only to gain access to the accurate consumption data which smart metering provides (and subsequently translate such data into energy-saving actions), but also to guarantee continuation of supply: the new licence conditions advise that, subject to certain qualifications, gas and electricity supplied after 6th April 2014 ‘should not be provided other than through an advanced meter, whether that meter is provided by the supplier, the customer or another party’. Organisations with profile class 5-8 electricity meters or annual gas usage of more than 732,000 kWh are thus obliged to implement a smart metering strategy within the next five years or face the possibility of being unable to secure energy supply contracts from 2014 onwards.
  
  

  It remains unclear at the moment whether energy suppliers are likely to implement large-scale smart metering rollouts as a result of the new licence conditions, in order to retain their existing client base. However, a recent smart metering guide issued by the Office of Government Commerce (OGC) advises against sanctioning a supplier contract where metering is conditional on the agreement. The OGC warns that signing such a contract ‘limits competition and the ability to negotiate energy contracts in the future’. Instead, it recommends ensuring that meter assets and data collection remain independent of the supply contract ‘to allow transfer of suppliers during the contract duration’.