Britain will be nearly £14 billion better off thanks to the introduction of smart meters for homes and businesses, according to a new report published by Oxford Economics.
Energy use savings will be one of the key benefits, with an estimated 5% reduction in electricity and gas consumption achieved through greater understanding and control totalling £11.2 billion. In addition, it’s anticipated that energy suppliers will benefit from £10.7 billion in efficiency savings, such as from eliminating manual meter reading, as well as £3.2 billion in generation-related savings including carbon reduction.
An important distinction of this national smart meter roll-out programme is that, unlike countries in Europe where a co-ordinated network approach has been taken, Britain’s will be achieved through a supplier-led approach thanks to our liberalised energy supply market. That means that energy retailers will have compelling commercial incentives to minimise costs while maximising consumer benefits. However, to meet these aims without a frantic scramble to the finish line in 2020, energy providers need to enter the adoption phase now.
We’ve been working with one forward-thinking energy retailer to apply our tools and know-how to support an efficient and adaptable smart meter implementation strategy. Initially, that means profiling and prioritising customer installations to manage workload, allocating trained personnel, vehicles, equipment and parts to each installation, minimising mileage and overtime, and managing postponements and unforeseen delays to the schedule.
We’re also helping to innovate the management, processing and analysis of smart meter data, to produce the kind of business insights that can be used to transform operational and commercial effectiveness. By bringing our real-time analytics to the pool of ‘big data’ from the 120 billion smart meter readings generated annually, the energy retailer is able to perform advanced customer segmentations that can be used to deliver targeted energy efficiency initiatives and communications, improve satisfaction and ultimately drive higher adoption of demand-side management programmes.
Our technologies are also underpinning an energy efficiency scorecard initiative that allows consumers to compare their energy consumption with similar households in their area and identify the best tariff for their usage profile.
All this illustrates that supplier-led smart meter deployment programmes are not without precedent. Through our extensive working relationships with organisations across the utilities sector and analogous industries such as telecommunications, we have already developed a raft of best practices and content to address the demands of any smart meter roll-out. Taking advantage of this objective experience can enable other energy retailers to achieve repeatable successes and measurable cost reductions, which can be passed on to businesses and consumers.
In the absence of a nationally-managed roll-out, it can be tempting to take a “wait and see” approach and leave the pioneering to those with the appetite for it. However, those retailers that are yet to embark on their own smart meter journey risk losing vital competitive advantage, as well as incurring unforeseen and unnecessary costs in a last-minute rush to meet the Government’s implementation deadline. While uncertainty may persist over a common operating standard for smart meters, the Oxford Economics report would suggest there are at least 10 billion good reasons for energy retailers to assert control over their own smart meter strategies.