Energy and Climate Change CommitteeWritten evidence submitted by BEAMA (SMR108)

BEAMA is the trade association for the electrical products industry in the UK. As part of this scope it represents the suppliers of smart metering equipment for the UK market. These currently include smart meters, In home displays and data management software, and communications hubs. These are all essential parts of the upcoming mandated roll out of smart metering. In addition BEAMA also represents other parts of industry that will be directly or indirectly connected to the smart metering systems, these include: smart grid, Electric Vehicle infrastructure and smart housing technologies; Heat pumps, heating and lighting controls. BEAMA and its members in smart metering have played a very important roll in assisting DECC and it partners in the development of the planned market for smart metering, and specifically on the development of interoperable and open specifications. The role of European directives, standards and other policies is also influences by BEAMA through the influential Brussels organisations, ORGALIMNE and ESMIG.

The Benefits of Smart Metering

The benefits of smart metering are multi faceted, covering consumers, energy use reductions, energy companies and the integration of low carbon smart technologies.

Consumers at the Heart of the UK Smart Meter Roll Out

Currently consumers receive very infrequent energy bills for electricity and gas use in their homes. They have very limited information on how much energy they use and the cost of this, and little to no awareness of the opportunities for them to reduce the usage. Smart metering with the full UK functionalities, will provide consumers with accurate regular bills, either as paper copies, on IHDs, or on PCs smart phones and tablets. Evidence from VassaETT report1 shows that just the delivery of accurate bills has a positive affect on energy use reduction. In addition consumers who have experienced smart meter with In home displays, have largely reported positively stating that it helps then budget better, helps then decide on energy supplier switching, and make decisions on energy efficiency investments. The number of consumers experiencing the improved services is thus far quite limited, but it is planned that through the foundation stage of the smart meter program, up to two million will be included. An important purpose of the foundation stage is to provide the opportunity for energy companies to experiment on the best ways to use the technologies to assist consumers.

In comparison to all other mass roll outs of smart metering the UK plans are the most consumer centric. A combination of the competitive nature of the UK energy market, and the Governments focus on the offer of In Home Displays and regular billing for all consumers, will allow UK consumers to get the greatest benefits from the planned roll out. In the VassaETT report the average reduction in electricity use found from all roll outs with displays was 8.5%. The UK roll out has the best chance of delivering these levels of savings, with costs savings of £1B per annum.

Integration of Low And Smart Technologies

In addition to the policy for the roll out of smart metering, the UK Government has policies promoting low carbon technologies. The existing FITs program for solar PV, and the planned Green Deal and Renewable Heat Initiatives aim to encourage consumer to invest in a range of low carbon technologies. In addition the policies managed by the Office for Low Emission vehicles (OLEV)aim to deliver a market for electric vehicles. The smart metering roll out will have great significance for each of these policies:

Smart metering and IHDs can measure and display energy generated from Solar PV systems as well as the electricity usage. This information allows prosumers to tailor their energy use to the availability of their “Free” energy. In addition the ability to automatically manage the use of electrical appliances in home will also provide additional benefits for those consumers investing in these technologies.

Many of the technologies that will be included in the Green deal and RHI, including heat pumps, and heating and lighting controls, will be able to “connect” to smart metering systems through the planned Consumer Access Devices (CADs)that can be added to the mandated smart metering technologies. As with the Solar PV example the combination of smart metering and the low carbon technologies will provide significant benefits in terms of controllability and the maximisation of energy and environment al benefits.

The charging of Electric vehicles at consumer’s premises is essential for the market for electric and hybrid vehicles to develop. The ability of smart metering systems to provide different tariffs will allow utilities to offer EV tariffs to EV customers, and allowing the matching the charging of EVs with the availability of excess power in the market.

The European Context

The roll out of smart metering in UK is consistent with all the European Directives covering energy markets and metering. In many areas, in particular with respect to consumer engagement, the UK is leading the way:

The European Commission has assessed the UK roll out plans, and although not commenting on member state actions in detail, believes that the UK philosophy should be adopted on a wider basis in Europe.

A combination of the Industry and Government has worked with the officials in Brussels to ensure that the appropriate level of standardisation is developed, that all free market and procurement regulations are met.

The UK is the mast advanced energy and planned smart metering market in The EU. This provides a major opportunity for UK based industry to benefit. Some of the technologies used in UK smart metering, the In Home Display and the communications hub, are only currently specified in the UK roll out. The specifications for products and the experiences of the use of technologies for UK based companies will provide opportunities in the future if, and when other member states adopt the UK consumer facing approach.

Security and Privacy

The security and privacy requirements are essential elements of any smart meter roll out. The DECC program is currently assessing the detailed requirements for security with industry partners, including BEAMA members. The need for privacy for consumers data is fully recognised and as is the need for security to avoid the loss of essential data, and the possible cyber security issues. Although meeting all the privacy and security requirements are a challenge for all stakeholders, BEAMA members are confident that cost effective solutions are currently under development and can be available for the mass roll out at the end of 2014.

There is a European context to the certification for security requirements, and BEAMA through its connections in Europe is working to ensure that the UK leads the way, and that all the UK requirements will be includes, and that a cost effective certification system is developed across Europe.

The Benefits for UK Industry

The smart metering market is international with manufacturing plants around the world including in the UK. BEAMA has carried out a survey amongst members on the potential increase in UK employment as a result of the smart metering roll out. Although difficult to estimate exactly, it was felt that if the UK was first to market in Europe, that existing manufacturing jobs would be protected, and that an increase in employment of between 750–1000 is expected, delivering over four million smart meters and related equipment at the peak of the mass role out. These would most likely be highly skilled jobs in assembly, testing, research, logistics and product development.

The market for In Home Displays and Communications hubs will increase significantly—from no or limited market in 2013 to up to five million units of each technology per annum at roll out peak. There will be significant increases in employment in these relevant companies, but at this stage impossible to estimate.

The market for meter installation, and in the future installation and maintenance of the related low carbon and smart technologies is likely to be much higher than the manufacturing jobs.

In Conclusion

The planned UK roll out of smart metering systems if the most ambitious and consumer focused in the world. It has the potential to deliver very significant benefits for consumers, and deliver costs reductions. The UK based industry is very active in supporting the program, and is prepared and ready for the challenges and opportunities that this brings.

February 2013

Prepared 26th July 2013