Supply chain

Functional diagram of the DCC

The energy supply chain for the delivery of smart meters in the UK seems simple enough in overview, but on closer examination there are a number of specific features and special relationships between parties which may or may have contributed to a slower roll out of smart meters than intended.

Our technology

The vast majority of smart meters use The Flag Protocol (which we maintain) or a superset of it (e.g. the standards IEC 61107, IEC 62056 or EN 13757, as used in DLMS COSEM). This places us in a unique position because our CHIRPS software (with minor modifications if necessary) can operate most smart meters. We want to put our technology to good use to unblock some of the constraints in the roll-out of smart meters and bring savings for everyone in the supply chain.

Financing for smart meters

The UK is the only country in the world where the Energy Supplier is the contractual hub for smart meters; elsewhere the Distribution (Network) Business manages the contract. This has implications for how smart meters are financed. Many smart meters are leased to customers through their energy bills, and when a customer changes supplier, the lease agreement is novated to the new supplier. The customer continues to pay the smart meter leasing costs whether their smart meter continues to work or becomes dormant.

Data Communications Company

In 2013, the Government appointed the Data Communications Company (DCC) to read smart meters but, apart from some limited trials, is not yet able to do this on the large scale intended for a number of reasons.

Often when a consumer switches energy suppliers, their smart meters become dormant and cannot be read remotely by the new supplier. The industry promises that this will be resolved when SMETS2 (Smart Metering Equipment Technical Standard version 2) meters are released and supported by the DCC. However SMETS2 meters have been delayed over the last five years and there are even concerns they may not work as intended. One reason for this is that the communications standard on which they rely, the Great Britain Companion Specification (GBCS), is complicated and apparently has not yet been finalised. This makes it very hard for competing vendors to design products that satisfy the GBCS.

There are now over 11 million SMETS1 smart meters installed, run by competing vendors and energy suppliers using Smart Meter System Operators (SMSOs) appointed by energy supplier and meter vendor partners. These were intended for trial only, but there are now so many that the Government has put on a new requirement to the DCC to support SMETS1 meters. This has become a priority over supporting SMETS2 meters. We do not have a go-live date for SMETS1 support. The DCC is relying on co-operation between the SMSOs, but this is not straightforward because they are competing commercial organisations.

Smart Energy Code

The Smart Energy Code is a complex multi-party agreement which defines the rights and obligations of energy suppliers, network operators and other relevant parties involved in the end to end management of smart metering (currently 310 parties in total; we are represented by Nigel Orchard), and its current version (SEC 5.22) came into effect on 18th September 2018.

Its administration company published v2 of the GBCS in February 2018. Further amendments to the GBCS, between the Government, the meter vendors (through their trade association BEAMA) and the energy suppliers, are not easy to agree.

Realising the gains

The rhetoric is powerful and effusive: in October 2018, the Department for Business, Energy and Industrial Strategy (BEIS) stated “The smart metering roll-out in Great Britain will create an unprecedented new platform for innovation in energy data”.

All political parties have supported smart meters, and the target is still for a further 42 million smart meters to be installed by 2020. Yet the DCC is not yet properly operational with SMETS1 meters, more meters are becoming dormant and consumers are subsidising the costs.

Every party in the energy supply chain needs to see more benefits from the roll-out and to see them more quickly.

This is where our smart metering technology can help by delivering substantial quick wins for all parties because the FLAG protocol and CHIRPS software have set a clear, stable and fully operational standard for 30 years.