Suppliers are required to roll-out smart meters to all domestic and small business customers by the end of 2020 which will deliver significant benefits to consumers, such as ending estimated billing and giving consumers greater control over their energy use. Smart meters will lay the foundations for a future smarter energy system in the UK.
Supplier planning is key to the success of this programme and Ofgem propose to use of its powers of direction to ensure that suppliers remain focused through to 2020. The rules around roll-out plans and annual milestones are set out in both the electricity and gas licences.
Ofgem’s approach to date has been to focus on large suppliers, requiring these to prepare and submit roll-out plans with binding annual milestones. Smaller suppliers have been required to submit similar roll-out plans but with non-binding annual targets. There is no intention to change the approach for small suppliers unless it is considered necessary at a later date to ensure completion of the project by the deadline of 31st December 2020.
Ofgem proposes the following amendments to the framework for regulating large energy suppliers with respect to smart meter roll-out plans and the setting of annual milestones.
Ofgem is seeking views on its proposal, in particular on the amendments, the effect of which is as follows:
- Suppliers will be required to submit a revised roll-out plan with revised annual milestones in January 2018 where new evidence exists that will or could have a material effect on previously submitted annual milestones or the assumed completion rate; and
- Clarify the link between the revised roll-out plans and the obligation in the supply licences to take all reasonable steps to complete the smart meter roll-out by 31st December 2020.
The proposed amendments recognise that suppliers will develop their approaches to the installation of smart meters as the programme progresses. These amendments will create a framework that prompts suppliers to keep their plans under review, maintains appropriately challenging annual milestones, and ensures that any revisions are made with a view to completing the 2020 roll-out obligation.
We will be feeding back to Ofgem on the following specific points:
- Is the 2020 deadline a realistic target given the difficulties experienced in 2014?
- Should Ofgem impose the same binding targets on all suppliers regardless of size?
- Should suppliers be doing more at this time to ensure the 2020 deadline is met?
- Have you experienced any difficulties with securing the installation of a smart meter?
The consultation closes on 15th February 2017. We are formulating our response to the consultation and would welcome your feedback to incorporate into this. To have your say, please email the compliance team at compliance@carbon2018.com or alternatively complete the contact form. To discuss this further please call Melanie Kendall-Reid on 01252 87 87 22.