The smart meter roll-out is coming, but the government needs to avoid the mistakes of BDUK, warns Mike Halley from Trilliant
Today (18 June) is the last day technology companies can submit their proposals to participate in a £7 billion project to switch most of the UK to smart meters by 2020.
The upcoming smart meter roll-out will be one of Europe’s biggest ever IT projects, but its proponents believe it will save much more money than is being spent on it.
One of the participants in the process is Trilliant – a ten year old start-up headquartered in California that develops a communications platform purpose-built for the energy industry. The company is also one of the UK’s largest providers of in-home smart energy communications equipment, with partners including British Gas and nPower.
Trilliant was involved in the largest North American deployment of Smart Meters, in Canada, where it helped Hydro One and the government of Ontario modernise the power grid in order to avoid building two additional coal-fired power stations.
Mike Halley, VP for EMEA at Trilliant, explains to TechWeekeurope how the smart meter infrastructure procurement works, who is participating and why it’s not worth waiting until 2015 to get one of these clever devices.
What is a smart meter?
By 2020, 80 percent of the UK population must use smart meters in order to comply with EU guidelines. If the target is not met, the country’s carbon quotas will be severely affected. The project has been in the so-called ‘foundation phase’ for the last 12 months, with British Gas, E.ON and nPower offering Smart Meters to certain households.
The mass roll-out will start in autumn 2015, with thousands of deployments every day, all the way until 2020.
Smart Meters reduce CO2 emissions by helping customers manage their own energy and bills, and letting them choose the supplier that provides best value for money. And unlike much-criticised pay-as-you-go meters, using a Smart Meter does not involve paying a price premium. “Ironically, the energy companies are trying to help customers to spend less money with them,” says Halley.
The total consumer benefits of the scheme are expected to amount to £6.3 billion, mostly due to operational efficiency. On the supplier side, the savings are set to be even higher – £9.07 billion including avoided site visits, reduced inquiries and customer overheads, Halley says.
There has been considerable scepticism about these promises, but lately, public opinion about smart meters has started to change. If two years ago people were cautious about letting a networked device measure their electricity, today, according to a recent survey by British Gas, the sentiment is mostly positive.
This being a £7 billion project, there are plenty of companies fighting for a piece of the action. Halley told TechWeekEurope that the procurement process, run by the Department Of Energy and Climate Change, is split into three competitions. The first is for Data and Communications Company (DCC), which will get the license to operate systems and smart meters in partnership with the energy companies. Here, the government has a choice between two contenders – Capita and G4S.
Trilliant is offering its wireless communication infrastructure to participants in the other two competitions – for Data Services Provider (DSP) and Communication Services Provider (CSP).
The DSP will be responsible for the mix of hardware and software required for communication between CSP and retailers. This competition is a three-horse race between Hewlett-Packard, IBM and Canada-based CGI Group.
The CSP competition is trickier: in it, the country has been split into three regions, with four organisations competing to connect each. Participants include Airwave (the company which provides secure networks for police, ambulance and fire services), communications and media specialist Arqiva, Cable & Wireless and Telefonica.
Halley warns about competition issues if only one supplier is selected in each category. Just last week, it emerged that the BDUK Rural Broadband scheme is set for a thrashing from the National Audit Office due to the lack of competition, which NAO suspects has inflated pricing.
“In the CSP procurement, the government can choose one, two or three bidders. Like the rest of the industry, we think they should choose two or three. Because awarding the contract to one entity would be anti-competitive. This is a 15-year deal – you don’t want to create a monopoly and strangle innovation.”
On the consumer side, it is important to remember that there’s no need to wait until 2015 to enjoy the benefits of monitoring your energy consumption. “The energy companies are open for business, right now. You can request a smart meter today, and choose between three different providers already,” said Halley.
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