Ofgem sounds warning shot over non-domestic smart meter rollout

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28 February 2013, Gas, Electricity

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Reading between the lines, and with the deadline of April 6, 2014 rolling into view, Ofgem appears to be preparing for the likely eventuality of some suppliers not meeting their obligations, and is highlighting what it will and will not take for an excuse.

In particular, Ofgem says it will be looking at the engagement strategies used to access relevant premises, the technical approaches taken to maximize the chance of successful installation, and the options put to consumers for their agreement to install an advanced meter before it will accept an "all reasonable steps"-type excuse for not meeting targets.

This is a clear nudge to suppliers to get their houses in order. Ofgem's progress data seems a bit dated, currently only covering up to March 1, 2012 - however, these figures offer cause for concern. While 63% of the relevant electricity meters had been successfully updated, only 46% of the relevant gas meters had been completed, with 40% of the time left to run.

Datamonitor's "Rollout of Non-Residential Smart Meters in the UK" (July 2012, EN00037-026) put forward some key recommendations to suppliers tackling the rollout - in particular that since reduction in overall consumption is the biggest source of economic benefit, suppliers should spare no effort in educating customers about ways in which greater savings can be had. This has not always been achieved. Indeed, according to Datamonitor's "B2B Smart Meter Roll Out: Analysis of Customer Experiences" (January 2013, EN00009-019), of larger users that have had the meter upgrade, 10% of power and 15% of gas customers could not say whether they had saved money while 21% of power and 17% of gas customers noted no savings at all.

Compliance with license obligations is one aspect of a rollout, but it should be more than possible for both suppliers and customers to enjoy cost savings as a result.

www.datamonitorenergy.com / asken@datamonitor.com / @DatamonitorEN

Source: MarketLine

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