24 July 2023 Innovation, Metering, Smart Meter Rollout

Opinion | ‘Smart meter rollout targets can be reached through innovation and collaboration’

"Smart meter rollout targets can be reached through innovation and collaboration" by Tom Woolley
By Tom Woolley, Smart Product & Strategy Director

If the National Audit Office’s (NAO) recent report on the progress of the UK’s smart meter programme has helped to reaffirm anything, then it is that rollout targets will only be met through continued innovation and industry collaboration.

The report, published last month, highlighted some of the challenges facing energy suppliers in fulfilling their Government-mandated obligations, which are – under latest proposals – to install smart meters in a minimum 80% of homes and 73% of small businesses by the end of 2026.

With 57% of all energy meters in the UK now smart there is some way to go, but with suppliers, industry and Government all working together and pulling in the same direction, it can be done.

Firstly, there is the huge challenge of installing a remaining several million smart meters in homes and SMEs within the next 18 months to achieve the minimum proposed coverage required. There were just shy of a million (944,000) smart meters fitted in the first five months of 2023 – a healthy pace but one which energy suppliers will have to ramp up if targets are to be hit.

Whilst there have been some disagreements between the Department for Energy Security & Net Zero (DESNZ) and utility providers on how to go about this, one particular line in the NAO report stood out as reason for optimism.

It described how, over recent months, Government has worked successfully with industry to develop new smart meter technology that works in more homes, opening up greater access to the devices for consumers who want one installed but hadn’t previously been able to.

At SMS, we’re proud to have helped lead the delivery of this innovation at our smart test lab facility alongside the Alternative Home Area Network Company (Alt HAN Co.) – the regulated not-for-profit collective of UK energy suppliers. This is the sort of fruitful collaboration between stakeholders that must mark the way forward across all aspects of the rollout over the next 18 months, whereby industry players come together to share best practices, learnings, and find common solutions to collective challenges.

This includes addressing some of the key issues underlined in the NAO report. Not least, developing ways to ensure the current 9% of smart meters installed that are currently not operating in smart mode can successfully regain and maintain their functionality. Again, this is an area where industry can work together through innovation to find solutions – and another example of how SMS is leading from the front, engaging energy suppliers through our Smart Meter Health portfolio optimisation services.

Finally, we must not lose sight of the fact that whilst meeting the smart meter rollout targets are fundamentally necessary, getting there is not the end game; it is merely the beginning of our digital energy transition. The long term success of the smart meter programme will not be determined solely by the number of smart meters fitted, but how well we harness digital energy data that these devices provide to enable a smarter, decarbonised energy system.

Yes, the key to unlocking the full benefits of smart meters is open energy data products and services and is an area of the industry that will require increased focus, attention, and investment over the next few years.

As the NAO report points out, thanks to innovation in this space, smart meters are now starting to provide these benefits for the overall system which will help towards power sector decarbonisation. The Demand Flexibility Service put in place by the National Grid Electricity System Operator (ESO) over winter 2022-23 is a prime example of this, enabling consumers to receive an incentive for shifting their consumption to help reduce peak demand. Flexibility services and time-of-use tariffs are likely to become even more widespread from 2026, when Ofgem expects industry to have commenced migration to new Half-Hourly Settlement arrangements across the retail electricity market.

The driving force behind these positive developments is open energy data, and SMS has invested significantly in our platforms that enable this innovation, empowering energy providers to offer more competitive products and services that can accelerate the digital energy transition, in turn providing benefits to consumers and wider industries.

Find out more about how we are leading innovation in our industry by heading over to our Insights