[Alan Dick][July 27, 2006] To provide a platform for discussion of electricity and gas metering issues at national level in the UK the Industry Metering Advisory Group (IMAG) has been formed, consisting of representatives of suppliers, network operators, regulatory and consumer bodies, equipment manufacturers and metering services providers. The objective is for two-way dialogue, both as a channel for advising government bodies consulting on proposed policy involving metering, and for raising issues where industry deems action is appropriate through regulation or market agreements. To mandate agreed actions, IMAG has a Gas and Electricity Metering Executive comprising senior members of the regulator, Ofgem, the market administrator, ELEXON, and appropriate government departments, currently trade and industry (DTI) and environment, food and rural affairs (DEFRA).

Due to a potential role for metering in promoting energy efficiency and reducing carbon emissions, IMAG set up an Environment sub-group to particularly deal with these issues.  The sub-group has been monitoring relevant activity in the UK on three main fronts:

•    Implementation of the Energy Services Directive
•    Funded trials of smart metering systems
•    Options arising from an ongoing consultation on innovative metering.

The Energy End Use Efficiency and Energy Services Directive was adopted in May 2006 and must be transcribed into the laws of EU member states by May 2008. In the UK this work is being undertaken by DEFRA. Article 13 of the Directive is concerned with providing information to customers through improved (time of use) metering and more understandable bills to enable them to better control their energy usage. Whereas the billing references are fairly straightforward, those relating to provision of meters have some qualifications relating to cost and proportionality, and there will need to be an interpretation as to what is required.  DEFRA officials have started to consider options and initial proposals will be going out for comment later this year.

Earlier this month the UK government issued its Energy Review. One element of this was announced earlier this year, namely the allocation of £5 million (US$ 9.2 million) funding for trials of ‘smart meters’, to be matched by industry so that £10 million (US$ 18.5 million) would actually be available. The objective of the trials is to collect robust data about the behaviour of customers provided with smart meters, in terms of what actual savings in energy consumption they make and whether this is sustained. Smart metering encompasses a range of technologies and functionality, and it is expected that the trials will reflect this in several different projects. The DTI is responsible for the funding but Ofgem has asked to take on a management role. Since the original announcement, a further £5 million (US$ 9.2 million) has been made available from funding relating to the provision of energy efficiency information by local authorities, hence the trials will now not only test technology but will evaluate the efficacy of various methods of providing energy-related information. Consortia – probably led by suppliers and including equipment manufacturers and metering service providers – are expected to bid to run individual projects. Bids are to be invited in September, with the aim of getting the majority of projects running by January 2007. First results from the trials could be available in late 2007.  

Ofgem has been concerned about the lack of implementation of more sophisticated metering in the UK. In February it launched a consultation on ‘innovative domestic metering’, asking questions about what were the perceived barriers. Regulatory problems included:

  • A licence requirement that suppliers inspect meters at least every 2 years, which negated some benefits of AMR
  •  The ability of a customer to change supplier every 28 days,  which could ‘strand’ any new technology assets installed and hence disincentives investment.

The first is being addressed in a general review of the supply licence and may be relaxed if concerns about maintaining safety can be allayed. The key to the second is seen to be ‘interoperability’ – having a core smart meter with standardised interfaces so that any supplier can connect to it and use his required additional functionality. Ofgem has proposed to take the lead in setting up an Interoperability Group to assist industry decisions.

For the first time in several years there are thus signs of action on a range of fronts which may trigger the move towards eventual use of smarter metering in the UK.