Smart meter reform doesn’t have to mean handing rollout to DNOs

It is great to see that the Energy Geeks report has prompted a debate on how we move forwards on smart metering with the rollout still only at 65%, with a high proportion of meters not communicating and with the added challenge of the 2G/3G switch-off, which will require all existing smart meter customers to be revisited before 2030.

Among the Energy Geeks I was probably the most sceptical about the idea of handing the rollout to the distribution network operators (DNOs). They have more than enough on their plates already with meters inside people’s homes (unlike in some countries), and they have no particular advantage in their ability to gain access. And to get customers engaged in providing flexibility we still need suppliers to develop engaging propositions which should be a trigger for customers to get a smart meter - as it appears to have been with the winter demand flexibility service (DFS) last year.

However, it’s right that we start thinking about radical steps - including asking what role DNOs might play. That could involve, for example, identifying geographic areas where flexibility will be of particular value to the DNO and them providing support on messaging in those areas. A recent Utility Week event on voltage (another Energy Geeks theme) served as a reminder that networks can obtain voltage data from the smart meters which should be another reason for them to help push smart meter take-up.

While I am sceptical about DNOs taking this on, I totally agree that we need to move to more of an area-based rollout to make more efficient use of installers and to create some local momentum (“we are in your street next week”). But this doesn’t have to mean a DNO rollout. A trial was carried out in Derby in 2020 through Smart Energy GB which involved suppliers coordinating and using street by street door knocking. Suppliers are also having to coordinate on multi-occupancy buildings (and have set up the Alt-HAN company to do this). And with a growing focus on local area energy planning there’s a potential role for local authorities to help in getting the message out or coordinating activity across social housing at least.

But even a local-area-based rollout will still only have a limited impact while the rollout is voluntary which is why another of the Energy Geeks' recommendations – where I was more bullish than others – is that we need to look at moving to a mandated rollout. At the start of the rollout, the main benefits in the 2012 impact assessment came from energy savings as a result of customers changing their behaviour - so it made sense for it to be voluntary. But 13 years on and with Clean Power 2030 highlighting the importance of flexibility and local network visibility becoming increasingly important, we need to see smart meters as an essential part of the infrastructure. Increasingly it matters when people use electricity not just how much they use – and the industry should be able to collect that information (as you would for any other product people buy).

Of course, a full-scale mandatory rollout risks creating a backlash, but there are smaller steps that could be taken to start with such as making a smart meter a requirement to access grants (eg heat pump subsidies) and requiring landlords to install smart meters as part of minimum standards in rental properties. These steps would also help reinforce the message that smart meters are now standard, not an optional extra.

This same imperative does not apply to gas and another of the Energy Geeks' recommendations that I support is to focus the rollout on electricity meters and remove the obligation on suppliers around gas smart meters (except where a customer asks for one). With customers progressively moving away from gas for heating, these meters risk being stranded assets. They are also significantly more expensive than electricity meters – and more complex to install – because they have a physical valve (to enable all gas smart meters to operate in prepay mode). A focus on electricity meters would simplify the rollout and hopefully help accelerate it.

Whether or not you agree with all of our recommendations in this space, what does seem clear is that the time is ripe for a fresh pair of eyes to look at how best to reset the smart meter programme and ensure that it is not a barrier to the achievement of Clean Power 2030. That then is the last of the recommendations that I fully endorse – for a task and finish group to look at these issues. With Alan Whitehead’s impassioned plea for action at the Utility Week Forum last year we have to hope that this will be one recommendation from the Energy Geeks that DESNZ will take up.