In the Spotlight the UK experience of Smart Metering

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In the Spotlight the UK experience of Smart
Metering

• European AMR Smart Metering Forum
• 21st June 2007

Duncan Sedgwick, Chief Executive, Energy Retail
Association
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Introduction

• ERA founded in 2003
• Trade association for Britains six main energy
  suppliers in the domestic market
• Established the Supplier Requirements for Smart
  Metering (SRSM) Project to develop a common
  framework for the delivery of smart meters in
  Great Britain

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The Competitive UK Market

• Residential market opened to competition 1998-99
• Initially 14 retailers
• Fierce competition between retailers
• Now 6 retailers representing 99 market
• British Gas
• EDF Energy
• E.ON Powergen
• RWE npower
• Scottish and Southern Electric
• Scottish Power
• Over 50 customers have switched supplier

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Interesting times

• Energy sector is in the spotlight
• Climate change at the top of the political agenda
  (G8)
• Security of supply the geopolitical issue
• Volatility in the wholesale market
• Consumer demand for energy efficiency measures
• European market liberalisation
• Increasing mainstream awareness of climate and
  environmental issues

5
The Global Picture

• Smart meters have been rolled out in several
  countries around the world

Italy Project for 30m 2-way electricity meters
at a cost of 2.2bn
Sweden Currently underway and plan to install
5.2m 2-way meters by 2009
Australia Victoria, Australia has started to
replace existing meters with 2-way smart meters
at the end of their useful asset life, aiming
to have completed 1 million such installations
by 2013
USA Canada Various US states rolling out 1-
and 2-way metering projects 800,000 2-way smart
meters Installed in Ontario, Canada, with 5
million to be completed by 2010
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European Legislation

• European Energy Services Directive
• National indicative energy savings target of 9
  by 2017
• Public sector to fulfil an exemplary role in
  meeting the target
• Member States required to place obligations on
  energy suppliers and distributors to promote
  energy efficiency
• Requirements on metering and billing to allow
  consumers to make better informed decisions about
  their energy use

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Smart Meters in Great Britain

• UK Government has an ambition for smart meters in
  every GB home within ten years
• Supplier obligation post-2011
• is to reduce carbon emissions
• and sell less energy

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Significant Differences in GB

• Competitive metering market
• Potential roll-out in electricity and gas
• Different levels of vertical integration
• No Government mandate currently for smart
  metering
• Left to competitive market
• Can only go so far in that environment

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Challenges of British roll-out

• Market challenges
• Fiercely competitive retail market
• Active, de-regulated metering market
• Government challenges
• Demands on industry to provide free Electricity
  Display Devices
• Customer challenges
• Misunderstandings of potential for smart meters
• Need for national collaborative communications
  campaign
• Industry challenges
• Interoperability of devices
• Stranded assets

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SRSM Project

• Objective is to develop and agree the operational
  framework for smart metering
• Focus is on domestic market
• Operational framework could also apply to
  non-domestic customers
• Phase I delivered and published Jan 07
• Electricity Gas smart meter specifications
• Data Definition
• Interoperability Requirements
• Industry Impact Assessment
• Phase Two will deliver the Operational Framework
  for smart metering in summer 2007

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GB SRSM Smart Meter

• Delivers supplier requirements
• 2-way communications
• Remote configuration for flexible tariffs
• Meter to store and display data over measurable
  time periods
• Automatic meter reading
• Import/Export to support microgeneration
• Electricity and potentially gas
• Credit/Prepayment switching

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Now is the Golden Opportunity

• Its the right thing to do
• It will revolutionise our sector
• Supply business and customer benefits
• End of estimated bills
• End of house-to-house meter readings
• Facilitate hassle-free switching process
• Increase tariff flexibility
• ERA willing to coordinate and lead the start-up
  phase

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What is the ERA calling for?
What is the ERA calling for?
Electricity and gas smart meters to all households
True smart meters two way communication
Delivery in 10 years
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In conclusion

• Smart metering has the
• potential to revolutionise
• the relationship between
• suppliers and their customers
• Co-operation from all parties
• is vital for success
• Unique challenge of GB market, market, but
  sharing international experience is key
  to tomorrows success