Waterwise response to consultation on Smart Metering for Electricity and Gas

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1 1 Waterwise response to consultation on Smart Metering for Electricity and Gas July 2009 Overall response Our response to this consultation is driven by the current policy agenda relating to water metering in government. Following statements by successive Environment Ministers in recent years that metering is the most sustainable way to pay for water, and that a move to meters for every home in England should be the aim (supported by measures to protect vulnerable groups), the Government set up the Walker Review to consider options for moving to full metering from the current position of 1/3 of homes in England and 1/4 of homes in Wales paying for their water according to what they use. In its recent Interim Report, the Walker Review made the following recommendations: Now that the government has committed to roll out smart energy metering to all households by 2020, the incremental cost of adding water meters to the smart energy communications system needs further examination. Ofwat and the water companies need to take action now to assess the costs and benefits In support of Ofwat s leadership on metering issues, we recommend that Ofwat sets up a smart meter group, including the Environment Agency and water companies, to determine the costs and benefits of smart meters to inform any decisions on approach and potential roll-out of smart meters. This group should also direct the data strategy and analysis for smart meter trials and exploit any potential synergies. In this context, the Intelligent Metering Initiative have already undertaken cost benefit studies of smart water metering scenarios and would provide valuable input. Some water companies are already undertaking smart meter trials. Metering has been shown to reduce water consumption by 10%, which, in the face of climate change and the need to adapt to less water (and population growth), in coming years, makes the water metering agenda more urgent.

2 Finally, Waterwise believes that there is an opportunity for Scottish Ministers to drive the agenda of multi-utility smart metering, through the policy developments set out in this consultation. Less than1% of homes in Scotland are metered for water, so there is a significant opportunity to move straight to smart water and energy meters in Scotland, missing out dumb water meters altogether. In its recent draft price limits, the Scottish Water Industry Commission allowed funding for the first ever metering trial in Scotland. This should be used to consider the potential for smart water and energy meters. Responses to specific consultation questions Q1. Do you have any comments on the Government s preference for the Central Communications model? Waterwise supports the government s preference for the Central Communications model in as much as it will go some way to address the issues of interoperability which are often a barrier to emerging communications technology. However, as the Baringa report notes, the decision not to favour a centralised roll-out of smart metering technology will mean it is likely more than one visit is necessary for the installation of gas and electricity meters. Whilst the consultation does not aim to include smart water meters within its remit, it should be noted that the costs of installation of smart meters for water are a key barrier to their uptake in the water industry. Installing smart meter technology through combined installations is currently the best option for reducing the costs of smart water meters, and given the agreement between stakeholders that water meters in all homes in England would be the most sustainable way to pay for water, an opportunity for a direct transition to smart metering may be missed. Q3 Do you agree the Central Communications model effectively facilitates end to end management of the electricity networks system needed for smart grids? 2

3 The Central Communications Model covers issues of data format and carriage, but does not address issues of data management and communication with customers. If as the consultation suggests this responsibility rests with the utility provider, preparatory work should be undertaken to demonstrate how the additional costs of large increase in the volume of data received will be managed, and how it will be effectively communicated to customers. Q4 Do you consider that Government should adopt measures to promote coordination of roll-out at local level? If so, what measures would you support? Co-ordination of roll-out is necessary to reduce the costs of installation. A basic requirement upon utilities to consider combined installations where possible would support this. Q5 Should any particular policy considerations be taken into account in considering whether there should be priority target groups for early deployment of smart meters? Due to high density and standard design, social housing has often proven a cost effective target for the roll-out of mass retrofits and meter installations. Added value to customers through an improved ability to manage their utility costs is also introduced. In the case of water, some older buildings may not have a single water supply pipe per property, increasing the costs of individual property metering. Q6 Do you have any comments on the merits of alternative approaches under which electricity and gas network businesses take on responsibility for aspects of smart metering? Q7 Do you agree with the functionality proposed for electricity meters? Please explain your reasons and if possible give evidence for your comments. 3

4 Q8 Are there any additional requirements that will be needed to facilitate smarter network management, efficient energy management and the development of smart grids? Please provide analysis, particularly on costs and benefits, where possible. Q9 Do you agree with the functionality proposed for gas meters? Please explain your reasons and if possible give evidence for your comments. Q10 Is there significant scope for retrofitting non-valve functionality to gas meters? What are the costs and how many meters are capable of being retrofitted? Q11 Are there any additional maintenance, administrative or management costs associated with having all gas smart meters with a valve? Q12 Do you agree with the Government's position that a standalone display should be provided with a smart meter? Stand-alone displays may be the only means of providing real time consumption data to customers without access to other means of display (computers, digital television, mobile technology etc.). The consultation does not state whether a separate display will be provided for each utility, and if so whether the format of each will be standardised to prevent confusion. 4

5 Whether for multiple displays or a single stand-alone display, the format should be kept consistent. In addition, whilst there is currently less of a drive for smart water meters, displays should be compatible with later upgrading to display this information, should a smart water meter be installed. Q13 Do you have any comments on what sort of data should be provided to consumers as a minimum to help them best act to save energy (e.g. information on energy use, money, CO2 etc)? Waterwise has encountered anecdotal evidence that normative data may be useful in communicating typical and best practice consumption to customers. Data regarding the average consumption for a similar household, as well as the best case scenario, may be useful. In addition, figures such as kwhs or kg Co2 may prove to have limited meaning to many customers without further information. For instance, information on the typical energy requirements of appliances and activities may prove useful to customers trying to picture their consumption. This data does not necessarily have to be displayed in-home, and could be communicated through other means such as via billing information. These principles apply equally to water consumption, where customers who are on a meter often have difficulty gaining any meaning from units or cubic meters quoted in their bills. Q14 Do you have comments regarding the accessibility of meters/display units for particular consumers (e.g. vulnerable consumers such as the disabled, partially sighted/blind)? Q15 Do you agree with the Government s proposal to extend to the small and medium non-domestic sector the minimum functionality that we will require for smart meters in the domestic sector, with certain exceptions to allow for individual consumer requirements? 5

6 Q16 Do you have any comments on how such a requirement, and the exceptions to it, should be framed? Q17 Do you have any comments on how the proposed new requirements should work in the context of the current developments in metering in this sector? Q18 Do you have any comments on the implications of the Government s proposed approach in this sector for the future development of smart grids? Q19 Do you have any comments on the revised Consultation Impact Assessment for this sector? Q20 Do you have any comments on the implications for the non-domestic sector of the options identified for a domestic delivery model? Q21 Do you agree with the Government s approach to promoting interoperability in the non-domestic market? Do you have particular views about the interaction between the Government s proposals for the non-domestic sector and the domestic smart meter roll-out? 6

7 Q22 Has Government identified the right issues for the immediate next steps? Are there other activities or key issues which you think should be addressed at this stage of the preparations for roll out? As outlined in Waterwise s overview, above, coordination with water companies and consideration of current government discussions on how to expand water meter coverage would reflect wider government priorities including to reduce water consumption in the face of predictions of more people and less water in coming years. From Waterwise s perspective, the initiative to install smart meters for gas and electricity provides an important opportunity for the inclusion of smart water meters. Smart meters would contribute to the government s target of reducing per capita water consumption to 130 litres or below by 2030, as well as providing a means for customers to understand and control their water consumption. This would also contribute to government targets for Co2 reductions, as hot water represents the second largest source of energy consumption in the home after space heating. Should the combined installation of gas and or electricity smart meters with water smart meters prove impractical, there should be a minimum requirement to ensure interoperability of water smart meters with both the Central Communications Body and any in-home display units. Q23 Do you have any other comments or evidence on issues relating to this consultation document or the accompanying Consultation Impact Assessments? 7