Smart metering has been a much-debated subject around the world for many years, but although the potential benefits offered by smart meters are clear, they have not yet been rolled out in volume in the UK.
This is primarily because there has been no real business case at an individual supplier level for universal smart metering. While there are strong advantages to be seen at the broader societal level and for individual households, in terms of both cost and carbon reduction, there are simply not enough benefits accrued to suppliers to justify what is a very significant investment. The cost of stranding existing metering assets has not helped, and the potential stranding of new assets where there is no interoperability agreement in place is rightly considered to be a major risk looking forward.
As a result, the debate moved away from a purely market-driven approach and is now centred around the government’s mandate to introduce a comprehensive smart metering solution. The pro-mandate argument is that it creates a level playing field across suppliers and will enable the appropriate costs to be passed on to customers – on the assumption that these will be outweighed by other consumer benefits. In a mandated model the issue of ‘going first’ is also resolved since the whole market will be working to the same timetable.
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