The global smart meter revolution
Smart metering: the crux of a ‘revolution’, according to Spain’s Telefonica. The British government calls them “the next generation” and if you ask France’s EDF, they’re the “smarter future”.
The new gas and electricity meters seem set to transform the way the world monitors its energy usage. You can see the universal appeal; the meters have several proposed benefits. Smart meters display near real-time data on energy use, which allows households and businesses to better manage their energy use. Plus, it brings an end to estimated billing. Consumers can budget better and energy suppliers deal with fewer billing complaints. It’s a win-win situation.
Providers all over the world recognise the demand for efficient energy use, thus smart meter programmes are being developed across the world. For example, the British government plans to install a smart meter in every home (over 26 million) by 2020. According to the government, some energy companies are starting to install smart meters now. The smart meters are free, although the cost of the roll out will already be covered in the consumer's bill. Why the huge rollout? The European Union asked its member states to consider smart meters as part of their efforts to reduce climate change. The British government conducted a study and adopted the aforementioned plan.
The EU has also encouraged other member states to rollout smart meters. A report from the European Commission states that along with the UK, Austria, Denmark, Estonia, Finland, France, Greece, Ireland, Italy, Luxemburg, Malta, Netherlands, Poland, Romania, Spain, Sweden “will proceed with large-scale roll-out of smart meters by 2020 or earlier, or have already done so. An EU sanctioned study found that the EU’s efforts could cut emissions by up to nine percent. Largely, EU governments and European energy providers are enthusiastic about the rollouts. For example, Germany will see the installation of 44 million smart meters by 2026 and a total investment of £18.73 billion in smart grids.
Around the world
While Europe has been planning rollouts, the rest of the world has been kick-starting its own smart meter revolution. Take Pakistan, for instance. Pakistani utility firms and the Asian Development Bank (ADB) have announced that they are currently selecting a partner for the deployment of a smart meter project. The project’s first phase is set to begin by June 2017. In neighbouring India, utility firm Southern Power Distribution Company of Telangana has kick-started a prepaid meters pilot project. The outcome will help the Indian government decide whether to deploy prepaid electric meters.
Trials are also taking place in Singapore. The government is reported to be exploring the possibility of widespread smart meter deployment. According to the Business Times, most electricity meters in Singapore are currently read manually once every two months, together with gas and water meters. Singapore’s Energy Market Authority hopes to improve this. Along with the national water agency and Singapore Power, the Authority is working towards developing a solution for reading gas, electricity and water remotely and reliably.
In Nigeria, Kaduna Electricity Distribution Company (KEDC) is planning to establish a manufacturing plant for smart meters. The utility firm plans to construct the $250 million manufacturing plant in order to reach its smart meter installation targets in Kaduna, Kebbi, Zamfara and Sokoto states. KEDC aims to install 500,000 smart electric meters to its customers by 2021. Likewise, Kenya’s primary energy distributor plans to install 5,600 outdoor meters near customer premises.
Smart meters are also popular in the US. For instance, the Texan city of Rowlett will soon undergo an advanced metering infrastructure project. The project, in partnership with water conservation firm Pedal Valves, involves the replacement of approximately 18,000 automated water meters with new advanced water meters. The Pennsylvanian town of Cranberry is taking similar efforts. The town has received an approval to replace existing water meters with digital meters in a bid to improve its revenue collection. The town will replace 7,800 analogue meters with advanced water meters this year.
Evidently, smart meters are part of many government's plans to cut carbon emissions and save energy. The demand for efficient meters knows no geographical bounds, and energy companies around the world are responding to it.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.