Energy and Climate Change CommitteeSupplementary written evidence submitted by EDF Energy
EDF Energy is one of the UK’s largest energy companies with activities throughout the energy chain. Our interests include nuclear, coal and gas-fired electricity generation, renewables, combined heat and power plants, and energy supply to end users. We have over five million electricity and gas customer accounts in the UK, including both residential and business users.
Following my appearance before the Energy and Climate Change Committee on 14 May 2013 to discuss the Smart Meter Roll-out, I am writing to provide full details of the key enablers needed for optimal roll out, as promised during the session, which are appended to this letter. I also wanted to provide some more information on EDF Energy’s current view to the roll out to support your inquiry.
This is a Complex Programme and the Focus should be on Simplification & Cost Minimisation
EDF Energy remains committed to the Smart Metering programme and delivering smart meters to our consumers. We believe smart metering is right for GB and should deliver consumer benefits through improved consumer experience and reduced energy consumption. However, the current GB design, specification and market model is complex which increases cost and the risk of failure. DECC recognise that the rollout of smart metering is a net cost to Suppliers which will be passed on to consumers. Therefore industry and the Government should endeavour to minimise the costs in the programme. This could include a co-ordinated rollout, centralised procurement and removing the mandated provision of an IHD provision. EDF Energy’s objective has always been to deliver this programme successfully but ensuring the cost to the consumer is minimised and consumer trust is improved. We believe in a right first time approach.
We must Deliver what Consumers want
We welcome the decision by DECC to put the programme back on a credible timetable. This provides the opportunity to ensure that the programme takes the right decisions for consumers and not the quick decisions. Our enduring priority should be delivering what consumers want as simply and cost effectively as possible.
The Foundation Stage should be used to Develop Capability and Solutions
The challenge for the GB rollout should not be underestimated. The equipment, technology and infrastructure are all new and as a result immature. Representative testing and trialling in the foundation stage will help to de-risk the programme and give confidence the benefits will be delivered. The foundation stage provides a one off opportunity to set this rollout up for success and therefore the focus must be on proving capability rather than installing in volume. It is far better to discover problems with thousands and not millions of meters installed.
SMETS 1 Meters are not Appropriate for Mass Roll
With regards the meters we believe the SMETS 1 asset is appropriate for testing and trialling but not mass rollout. Although they can deliver some of the benefits, SMETS 1 meters also have some fundamental limitations. In our opinion the SMETS 1 meter will not meet the enduring security standards, it will not work with other metering equipment in the home, it will not operate effectively in many property types, it will not deliver the expected network operator benefits and prior to the availability of the DCC it will result in poor consumer experience when moving home or on change of supply.
The Key Enablers Provide the Building Blocks for a Successful Roll Out
All Suppliers and Energy UK have recognised that there are key enablers that need to be delivered to ensure that the rollout of smart meters is optimal. If these key enablers are not delivered the cost of the rollout will increase, the quality of service will be impacted and unnecessary risks introduced. For EDF Energy the key enablers will help to ensure that we can deliver the right kit, at the right cost, to an engaged consumer and with a positive consumer experience. We need to get these basic building blocks in place upfront to ensure smart meters deliver benefits for consumers. We are a responsible company that wants to avoid the costs and consumer impact of having to revisit properties to replace non-compliant or unreliable early meters prior to the end of the roll out. We are committed to delivering the roll out right first time.
The DCC is Essential for Mass Roll out of Smart Meters to begin
The DCC is a critical element of the national smart architecture needed to enable communication with smart meters, consumer switching, privacy and security. All stakeholders support the need for a DCC in this critical central role. Given this criticality it is difficult to imagine how the roll out could commence without it. EDF Energy firmly believes that large scale deployment of smart meters must not commence until the DCC is operational.
Clarity is Required on what is Expected of all Reasonable Steps
We believe that the installation target for smart meters is one area that is introducing unnecessary ambiguity. Currently the target for Suppliers is to take “all reasonable steps” to attempt to install a smart meter for 100% of consumers. Suppliers have no guidance of what constitutes “all reasonable steps” and will need to individually interpret this so as to design and build processes and systems. We recognise that there will also be consumer segments that will be dis-engaged, dis-interested or actively resisting smart meters. Suppliers need a clear understanding of what is expected from “all reasonable steps” or a more pragmatic and transparent target introduced. Without this it is analogous to starting a running race without knowing what distance has to be covered.
I hope the above is of assistance to you in your inquiry. If you have any further questions for me on this subject, please do not hesitate to get in touch and I will be happy to help.
June 2013
APPENDIX 1
LIST OF KEY ENABLERS
Firm Design Baseline delivered for E2E Architecture, recognising that this will develop in detail over time—All parts of the smart infrastructure need to understand how the initial end to end process will work so that they can develop systems and processes to support this.
Data Communication Company (DCC) & Service Providers fully tested and available in line with supplier roll-out projections—Suppliers need to be able to communicate with smart meters using a single, secure, interoperable interface.
SMETS2 Meters, In Home Displays (IHDs) and CSP Comms Hubs tested & available in line with supplier roll-out projections—Suppliers need smart meters to install.
Proven enrolment/adoption regime and early enrolment of SMETS meters that meet appropriate criteria, including security—Suppliers need to understand what the DCC will support to inform their purchases.
WAN coverage that allows suppliers to optimise roll-out—Suppliers need to be able to communicate with smart meters, update tariff details, retrieve meter readings and configure the meter to meet the consumer requirements.
HAN coverage that allows suppliers to optimise roll-out and minimise customer dissatisfaction—Suppliers need a system that works in high rise buildings and in many property types.
Central Delivery Body (CDB) operational & delivering objectives—the CDB is required to engage with consumers so that they understand smart metering and the benefits that could be realised increasing the uptake of smart meters.
Supplier systems and infrastructure tested and ready—Suppliers need sufficient time to build and develop their systems so that they can interface with the DCC.
Network Operators ready with operational IT systems and workforce to enable meter point defect rectification—Network operators need to be ready to resolve network issues identified by the smart roll out and ensure a positive consumer experience.
Commercially Interoperable Smart CoS arrangements, subject to the outcome of the Foundation Smart Market consultation—to deliver a positive customer experience.
Sufficient trained installation resource available nationally to support roll-out—Suppliers need to have a trained workforce to ensure that the installation is conducted safely, professionally and meets consumer protection requirements.