Smart meter rollout: Ofgem’s latest thinking

Ofgem’s latest thinking on the smart meter rollout was captured in an open letter on 15 May. 

This letter is Ofgem’s fifth concerned with the rollout and taken collectively the letters set out what the regulator expects from suppliers. The latest letter is essential reading for everyone involved in the rollout, offering little comfort to companies grappling with the enormity of the challenge as the emphasis firmly remains on areas of potential non-compliance.

The regulator expects suppliers to be actively preparing to install SMETS2 meters at scale by October which is when SMETS1 systems will no longer count toward the rollout target. This includes arranging contracts for the supply of meters, conducting end to end testing, training installers and running small volume pilot installations. Noting that some meter variants are not yet available, Ofgem expects suppliers to work with supply chains and industry groups to resolve such problems. Ofgem encourages suppliers who decided to wait for SMETS2 to make SMETS1 prepayment meters available to customers as soon as possible. This is a puzzling suggestion given the proximity of the SMETS1 end date, the meter lead times, and the corresponding rapidly diminishing appetite for meter asset providers to fund SMETS1 devices.

Customer engagement remains an important concern. Ofgem specifically addresses customer refusals by requiring participants to develop innovative and tailored re-contact strategies without over-stepping the mark through being overly repetitive or coercive.

The letter acknowledges that some suppliers have difficulty in securing the required increase in installation capacity from metering companies but places the onus right back onto suppliers who carry the regulatory and safety obligations for the rollout.

The letter serves as a useful reminder of the tough regulatory challenge suppliers face in this area.

We’ve launched a new service designed to help suppliers navigate this highly complex regulatory environment. All supplier obligations on smart metering, including licence conditions and guidance such as the latest Ofgem letter, government directions, SMICOP and the Smart Energy Code, are summarised in clear intelligible language and presented in an easy to access portal. The purpose is to cut through the complexity of the many and various governance sources so that suppliers can readily understand the obligations and concentrate on ensuring compliance. The service includes a comprehensive monthly report highlighting changes to the regulations, tracking progress and decisions from key workgroups, capturing government directions and more. 

For more information on the Smart Meter Regulation Service please contact David Crossman at d.crossman@cornwall-insight.com

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