The UK Government is preparing for the task of replacing the country’s 53 million gas and electric meters with smart meters.
The project, which will be the largest smart meter deployment in the world, will see energy suppliers install smart meters at 28 million homes and 2 million small businesses. Consumers will also benefit from the installation of in-home displays that show how much energy they use. Set to begin in 2014 and finish in 2019, the project is expected to deliver more than $10.8 billion in net benefits to the UK.
The smart meter rollout will cost $17.8 billion over the next 20 years, according to the UK’s Department of Energy and Climate Change (DECC), delivering gross benefits of $28.9 billion. If all costs and benefits are taken into consideration, the average dual household is expected to save $38 annually by 2020, rising to $62 by 2030. For a small business, the bill savings are expected to be approximately $295 a year by 2020, rising to about $310 by 2030.
The central data and communications company (DCC), a new function set up by the DECC, will manage the data that travels to and from gas and electricity smart meters in households. To offer services to end users, it will have to issue contracts to a number of IT and communications companies. A tender, managed by the DECC, is currently under way. Both data service providers (DSPs) and communications service providers (CSPs) are working on bids for the project, and the final results of the tender are expected in the first quarter of 2013.
Six CSPs – O2, Vodafone, Balfour Beatty, Arqiva, Airwave and Cable & Wireless – are still in the running for three regional contracts worth $2.3 billion each. Meanwhile, five companies - IBM, HP, CSC, Atos and SAP, which is working with Logica – have made it through the second phase of a five-phase process to select a single DSP for a contract thought to be worth around $373 million, according to Utility Weekly. Each bidder has to submit detailed plans during the third phase of the selection process.
According to Mike Lewis, utility industry director at SAP UK & Ireland, there is now a substantial risk the smart meter project will miss its 2019 deadline, regardless of which companies win the tender.
“It’s clearly a lot of work to get done between 2014 and 2019,” he says. “I don’t think we can afford any further delays to meet that timescale. There is no accounting for any slippage going forward, so I think that whatever decisions are taken this has to be put into some very safe hands.”